Government Takes Over Special Educational Needs Funding Amid £20bn Warning

The UK government has announced it will assume full responsibility for special educational needs and disability (SEND) funding from local councils, a move that has raised alarms about a potential £20 billion financial crisis by 2028. The Office for Budget Responsibility (OBR) projects that annual SEND costs will escalate to £6 billion by 2028, necessitating urgent reforms in the SEND system. This decision comes as councils face a projected £14 billion deficit due to overspending since 2020, which the government has yet to address.

The Guardian

The OBR has indicated that if the projected £6 billion in additional costs is funded through the Department for Education's (DfE) core schools budget, it could result in a 4.9% real decrease in mainstream school spending per pupil, contrary to the planned 0.5% increase. A DfE spokesperson stated that the OBR's forecasts do not account for forthcoming policy changes, asserting that any deficit would be absorbed within the overall government budget. Chancellor Rachel Reeves emphasized that the reforms are aimed at creating a functional system rather than being purely financial in nature.

The Guardian

Critics have voiced concerns regarding the potential impact on school funding. Natalie Perera, chief executive of the Education Policy Institute, cautioned against cutting school funding to address rising SEND costs. Local councils have warned that without structural reforms, SEND services in England could face "total collapse." The impending lifting of an accounting override in 2028, which currently allows councils to manage their budgets despite deficits, could lead to widespread insolvency among local authorities.

The Guardian

The surge in demand for education and health care plans (EHCPs) has significantly contributed to the financial strain on councils. The number of EHCPs has more than doubled over the past decade, reaching 639,000, compelling councils to increasingly rely on costly private special schools. Matthew Hicks, chair of the County Councils Network, urged the government to take decisive action to address the historical deficits in the upcoming local government settlement.

The Guardian

The government has acknowledged the need for reforms but has not provided a clear plan for addressing the accumulated SEND deficits. Helen Miller from the Institute for Fiscal Studies noted that the OBR's warning intensifies the government's need to implement reforms that could mitigate spending growth. William Burns from the Chartered Institute of Public Finance and Accountancy highlighted the opportunity for the government to establish a SEND system that effectively supports children and families while alleviating financial pressures on councils.

The Guardian

• “While there is a clear and imminent need to address the rising costs of Send provision, the government must not cut school funding to meet these pressures.” — Natalie Perera, Chief Executive, Education Policy Institute

The Guardian

• “The government must grasp this opportunity to build a Send system that works for children and their families, and which pulls councils back from the financial cliff edge.” — William Burns, Social Care Policy Adviser, Chartered Institute of Public Finance and Accountancy

The Guardian

As the UK government prepares to centralize SEND funding, the looming financial challenges and the need for systemic reforms are becoming increasingly urgent. Stakeholders are calling for immediate action to prevent a crisis that could jeopardize the future of SEND services and the financial stability of local councils.

The Guardian