Budget Reveals Send Funding Shakeup
Chancellor Rachel Reeves has announced a major overhaul of special educational needs funding in England, transferring full financial responsibility from local councils to the Department for Education. The move, revealed in the recent budget, comes with stark warnings about a potential £20bn fiscal timebomb that could explode within two years.
OBR Sounds Alarm Over Financial Risks
The Office for Budget Responsibility has raised serious concerns about the sustainability of Send spending. According to their projections, annual costs for special educational needs and disability provision will reach £6bn by 2028. Even more worrying is the accumulated historical deficit from council overspending since 2020, which is forecast to hit £14bn by 2028.
The OBR stated clearly that "the government has not set out how this would be addressed and so it represents a significant fiscal risk." Their analysis suggests that if the additional £6bn annual Send costs were funded through the existing schools budget, it would mean a 4.9% real-terms cut in mainstream school spending per pupil from 2028-29, rather than the planned 0.5% increase.
Councils Welcome Move Amid Uncertainty
Local government leaders have largely welcomed the decision to remove what they consider an unsustainable financial burden. Matthew Hicks, chair of the County Councils Network, emphasised the urgency: "With OBR red-flagging these existing deficits to the chancellor as an issue that could lead to council bankruptcies, the government must move beyond promises of a solution."
The current situation is particularly precarious because councils have been using an accounting override to keep Send deficits off their balance sheets. When this override expires in 2028, 90% of upper tier authorities could effectively face bankruptcy if the accumulated deficits return to their books.
William Burns from the Chartered Institute of Public Finance and Accountancy noted that centralising Send spending from April 2028 would "ease the intense financial pressure on councils" but stressed the need for "a Send system that works for children and their families."
Rising Demand Drives Spending Crisis
The driving force behind the funding crisis has been a dramatic increase in demand for Education and Health Care Plans. These legal documents guarantee educational support for conditions including autism, speech difficulties and mental health needs for young people up to age 25.
The numbers tell a compelling story:
- EHCPs have more than doubled in the past decade
- Current figures stand at approximately 639,000 plans
- Councils increasingly rely on expensive private special schools
- Many providers are owned by private equity investors
Helen Miller from the Institute for Fiscal Studies warned that the OBR's assessment "greatly sharpens the government's incentives to introduce reforms that might slow the growth in spending." She added that the government is "running out of time for reforms to deliver significant savings in this parliament."
Education Secretary Bridget Phillipson now faces the challenging task of delivering reforms that satisfy both financial constraints and the needs of children with special educational requirements, with a schools white paper expected early next year.
