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The government has announced a £5 billion fund to erase 90% of the debts that English councils have accumulated by supporting children and young people with special educational needs and disabilities (SEND) up until the end of the current financial year. This move aims to ease the financial strain on councils and help them manage their SEND obligations more effectively.
Representing councils across England, the Local Government Association (LGA) responded positively to the announcement, highlighting that it “removes the immediate threat of insolvency for many councils.” The government is also preparing to reveal its comprehensive plans for SEND reform, expected to be detailed in the forthcoming Schools White Paper.
Councils are legally responsible for identifying and providing support to children with special educational needs, but growing demand has pushed their costs well beyond the funds allocated by the government. Presently, these SEND deficits are being temporarily hidden from council accounts through a statutory override, which is set to expire in 2028. Following this, the government intends to assume responsibility for SEND funding entirely.
Data from the Office for Budget Responsibility (OBR) has indicated that, by the time the override ends, historic SEND deficits across councils could total up to £14 billion. However, many councils have warned that repaying these debts in full would lead to widespread financial failure. To address this, starting this autumn, councils in England will receive grants that cover 90% of any deficits accumulated through the end of this financial year. This funding comes from the high needs block of the dedicated schools grant, which is the government’s source for SEND support.
Cllr Louise Gittins, chair of the LGA, praised the government’s intervention as a “recognition that these costs are not of councils’ making and have accrued due to a broken system that is urgently in need of reform.” She emphasized that it remains essential to eliminate both historic and future deficits completely.
Currently, a record 1.7 million pupils in England receive some level of SEND support, with the number requiring higher levels of assistance through education, health, and care plans (EHCPs) having more than doubled over the past decade. Amidst this, MPs have urged the government to increase funding for mainstream school budgets to support proposed SEND system changes. The government has already committed £3 billion towards creating 50,000 specialist school places within mainstream education.
The Department for Education has stated that “to deliver lasting change for families, our reforms must be built on strong foundations and that’s why we are working in partnership with councils.” They also indicated that the Schools White Paper will outline plans to develop an inclusive education system aimed at helping all children thrive while ensuring councils’ financial sustainability. Further information on how the government will manage any SEND deficits occurring between April 2026 and April 2028, when the statutory override ends, will also be included in this upcoming publication
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