Up until now, a government “statutory over-ride” has kept spending deficits relating to SEND off councils’ revenue accounts, but this intervention will end in March 2026.
Survey findings from the Local Government Association (LGA) have revealed that 53% of the responding councils responsible for SEND provision say they will not be able to set a balanced budget in 2026/27.
This figure rises to 63% in 2027/28 and to 65% in 2028/29.
In January, a report from MPs on the House of Commons Public Accounts Committee warned that the SEND system in England is in “dissarray” and has become an effective postcode lottery.
The MPs’ investigation found that many local authorities are facing effective bankruptcy because their spending on SEN has outstripped government high needs funding for years and has led to “substantial deficits”.
Echoing the LGA’s findings, the MPs’ report warned that 66 local authorites (43%) are “in danger of effective bankruptcy within 15 months”.
The LGA’s research involved responses from 105 councils – about a third – and the body is calling on the Treasury to address the issue as part of the June 11 Spending Review.
The LGA wants to see the government write off councils’ high needs deficits, which it says are projected to rise to £5bn next year. It follows similar calls from the Association of School and College Leaders, which has called for a one-off settlement from government separate to the education budget and for “significant additional funding” going forward.
The National Association of Head Teachers also wants to see deficits written off and better funding for schools. Writing in Headteacher Update in January, general secretary Paul Whiteman said: “When we surveyed school leaders last year, just 1% said that the funding they receive for pupils with SEND is sufficient to meet needs. And special school leaders are angry that the £10,000 they receive per-pupil has been frozen since 2013.”
Mr Whiteman highlighted as well that while schools should be able to access “top-up” funding if the additional cost of SEND support is more than £6,000, they often don’t receive the money required – and the £6,000 threshold has also been frozen for more than 10 years.
The problems have been driven by soaring demand for SEN Support and Education, Health and Care Plans (EHCPs), which outline the support a person is entitled to and which were introduced during the last round of SEND reforms in 2014.
As of January 2024, there are 1.9 million children aged 0 to 25 with SEN, with most (1.14 million) on SEN Support (a 14% increase since 2015) and 576,000 who have an EHCP (up 140% since 2015).
As MPs reported in January, there has been a 58% increase in the Department for Education’s high needs funding over the last decade, but this has been nowhere near enough to meet demand.
The DfE has promised wider reforms to the SEND system, but we are yet to see its proposals.
The LGA welcomed last term’s £1bn funding settlement for high needs SEND, but has warned, like many others, that this money risks being used to plug the deficits.
Arooj Shah, chair of the LGA’s Children and Young People Board, said: “The ending of the statutory override threatens councils’ financial viability. Only by taking bold and brave action in the Spending Review and writing off councils’ high needs deficits can councils have the financial stability they need to ensure children with SEND get the support they need.
“But funding is only one of the challenges facing the SEND system. Putting councils on a stable financial footing has to be part of a comprehensive reform plan, which focuses on boosting inclusion in mainstream schools, early years settings and colleges, ensuring they have the capacity and expertise to meet the needs of children with SEND.”
Back at the NAHT, Mr Whiteman responded to the LGA’s findings: “These sobering findings spell out the urgent need not only for the government to write-off high needs deficits and give councils a clean slate, but also to offer the reform and investment needed to mend the broken SEND system.
“That means ending the unfair postcode lottery when it comes to support for pupils with the most severe needs, putting this on a more sustainable footing. The government must also end the mismatch between children’s needs and the funding and resources available, and ensure there are enough school places and specialist staff.
“If ministers are to succeed in their ambition for more pupils with SEND to be supported in mainstream settings, schools will need access to significantly more funding and resource, as well as greater support from health and social care.”
The June 11 Spending Review will set three-year day-to-day government department budgets between 2026/27 to 2028/29.