Council Insolvency Crisis Looms Over Special Educational Needs Deficits
A stark warning has been issued as new research reveals that the majority of local authorities across the country are facing potential insolvency due to escalating deficits in special educational needs and disabilities (Send) funding. The Local Government Association (LGA) survey paints a dire picture of financial strain that threatens to cripple council budgets within the next few years.
Overwhelming Financial Pressure on Local Authorities
The comprehensive survey found that an alarming 79 percent of councils anticipate being unable to set a balanced budget by 2028. This critical deadline coincides with the expiration of a statutory override that has temporarily shielded councils from including Send overspends on their official balance sheets. Without this protective measure, the true scale of the financial crisis will become devastatingly apparent.
Even more concerning is that 94 percent of the 87 responding local authorities indicated they would likely continue to overspend on Send provisions even if their current deficits were miraculously eliminated in 2028. Nearly half of these councils expect their Send budget overspending to accelerate at a faster rate than previous years, suggesting the problem is intensifying rather than stabilizing.
The Human Cost of Financial Strain
Councillor Amanda Hopgood, chair of the LGA's children, young people and families committee, emphasized the human dimension behind these stark statistics. 'Under the current system, the rise in support need has left many councils buckling under the strain,' she stated. 'The huge costs in providing support are threatening most councils with insolvency.'
The survey revealed that 95 percent of councils currently report deficits in their dedicated schools grant for the 2025/26 period. This widespread financial shortfall comes despite increasing demand for Send services, creating an impossible situation for local authorities trying to meet legal obligations with inadequate resources.
Education, Health and Care Plans: A Growing Challenge
Much of the financial pressure stems from the dramatic increase in Education, Health and Care Plans (EHCPs), which are legal documents outlining the specific support entitlements for children and young people with Send. The number of active EHCPs has nearly doubled from 353,995 in 2019 to 638,745 as of January 2025, representing a significant expansion of statutory responsibilities for local authorities.
Some policymakers have suggested legislative changes to restrict EHCPs to only the highest-need cases, though this proposal has raised concerns among Send parents and advocates who fear reduced support for vulnerable children.
Call for Systemic Reform and Investment
The LGA is urgently calling for the government to write off existing Send deficits in the final local government finance settlement. Additionally, they advocate for reforms outlined in the forthcoming Schools White Paper that would enable more children with Send to receive appropriate support within mainstream educational settings.
Paul Whiteman, general secretary of the school leaders' union NAHT, emphasized the inadequacy of current provisions. 'Even where councils are accumulating deficits, the support they are stretching to still often falls short of what schools and families require,' he noted. 'It's urgent that this is addressed in the forthcoming White Paper, both through systemic reform and significant investment.'
Teacher Perspectives and Government Response
New polling from Teacher Tapp, conducted for the Social Market Foundation with 9,000 teachers, revealed that 58 percent would support reducing EHCPs if the savings were redirected toward earlier intervention strategies or enhanced classroom-based support.
Office for Budget Responsibility forecasts indicate a staggering £6 billion gap between expected funding and projected Send costs for 2028/29. The government has stated this shortfall will be absorbed within the overall government budget rather than deducted from school allocations.
Education Minister Georgia Gould has previously affirmed that 'there will always be a legal right to additional support' for young people with Send. A Department for Education spokesperson added: 'We're changing the school system and ending the postcode lottery so children with Send get the right support earlier, when and where they need it.'
The Schools White Paper containing the government's detailed plans for Send reform is expected to be published in the coming weeks, potentially offering solutions to this mounting crisis that threatens both council solvency and educational support for vulnerable children.
