Special education costs threaten council budget

LOCAL councils racking up vast deficits on special educational needs and disabilities (SEND) could be sent into bankruptcy unless the Government acts urgently, ministers have been warned.

- DANIEL HOLLAND Local Democracy Reporter

Since 2020, local authorities have been able to leave huge overspends on SEND services off their main balance sheets under a short-term workaround introduced by the Conservatives amid soaring numbers of children in need of Education, Health and Care Plans (EHCPs) for a range of conditions, such as autism.

But that 'statutory override' is due to expire in March 2026 meaning there is now a "fast-approaching cliff edge", with combined deficits totalling billions leaving many councils facing financial catastrophe.

A report published by the Public Accounts Committee today accuses Labour of having "no proposed solution in sight" to deal with the crisis and of having added to town halls' financial burdens through increases to national insurance contributions, branding it "unacceptable" that no assessment was done of the indirect costs it will cause for councils.

The Local Government Association (LGA) has estimated councils' combined SEND high needs deficits are set to rise to £5bn next year and more than half of all local authorities will become insolvent if the statutory override is allowed to lapse.