Most councils responsible for special educational needs and disabilities (SEND) provision will not be able to balance their books when a “statutory override” on their deficits ends next year, a survey reveals.
More than half of councils that responded to a Local Government Association (LGA) survey said they will become insolvent when a temporary accounting measure that keeps spending deficits relating to SEND off their main balance sheets ends.
Local authorities are currently able to keep high-needs deficits - where the cost of providing support outstrips the SEND budgets available - off their main revenue accounts.
But the measure that enables them to do this, known as a statutory override, runs out in March 2026.
SEND funding deficits
In the survey of chief finance officers in 60 single-tier and county councils in England, 53 per cent of councils said they would not be able to set a balanced budget in 2026-27 if the override ends with no alternative.
A higher proportion of 63 per cent said they would not be able to set a balanced budget in 2027-28 without the statutory override or a suitable alternative, and 65 per cent said the same about 2028-29, in the LGA poll in January.
The LGA is calling on the government to urgently address the problem in its spending review, as part of a wider programme of reform of the SEND system.
It says the government should write off councils’ high-needs deficits, which are projected to rise to £5 billion next year.
Last month the Commons Public Accounts Committee urged ministers to take urgent action to prevent councils from having to declare effective bankruptcy when the statutory override ends.
The number of children and young people on support plans for SEND has risen over the past decade, according to government figures.
There were 575,963 children and young people in England with education, health and care plans (EHCPs), which set out the provision of SEND support needed, in January 2024 - a 140 per cent increase since 2015.
Arooj Shah, who chairs 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.”
Plans for SEND reforms
Chancellor Rachel Reeves announced in her first budget in November that £1 billion of funding will go towards supporting the SEND system.
In December the government said it had earmarked £740 million to create more specialist places in mainstream schools for children with SEND.
The funding, which forms part of the £6.7 billion of education spending announced in the Budget, can be used to adapt classrooms to be more accessible for children with SEND, and to create specialist facilities within mainstream schools to deliver more support.
A provisional statement for 2025-26, published in December, said that the government intends to set out SEND reform plans in 2025.
It said: “The government intends to set out plans for reforming the SEND system in further detail next year. This will include details of how the government will support local authorities to deal with their historic and accruing deficits and any transition period from the current SEND system to the reformed system.”
For the latest education news and analysis delivered every weekday morning, sign up for the Tes Daily newsletter
