More than half of councils in England that support children with special educational needs and disabilities (SEND) will become insolvent when a temporary accounting measure that keeps SEND-related deficits off their main balance sheets ends next year.
Councils are currently able to keep high-needs deficits – where the cost of providing support outstrips the SEND budgets available to councils – off their main revenue accounts. This ‘statutory override’ expires in March 2026.
An LGA survey found that if the override ends as planned, with no alternative method for addressing deficits, 53 per cent of responding councils would not be able to set a balanced budget in 2026/27, rising to 63 per cent in 2027/28 and 65 per cent in 2028/29.
The LGA is calling on the Government to urgently address the issue in June’s Spending Review, by writing off councils’ high-needs deficits and reforming the SEND system.
Since reforms to the Children and Families Act 2014, the number of children and young people with education, health and care plans has risen by 140 per cent, from 240,183 to 575,973 in 2023/24. While £1 billion of funding for SEND was announced in the Budget, this is likely to be consumed by partially plugging existing deficits.
Cllr Arooj Shah, Chair of the LGA’s Children and Young People Board, said: “The ending of the statutory override threatens councils’ financial viability.
“Only by the Government 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.
“Putting councils on a stable financial footing has to be part of a comprehensive reform plan that 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.”