A significant financial crisis looms for local councils across the UK as a staggering 79 percent report the risk of insolvency due to escalating costs associated with special educational needs (SEN). Findings from the Local Government Association (LGA) reveal that without substantial reform, most councils will struggle to achieve a balanced budget by 2028. The current statutory override that allows councils to exclude SEN overspends from their balance sheets is set to end, compounding the financial strain.
The LGA’s research highlights that nearly all responding councils—94 percent of the 87 authorities surveyed—anticipate continuing to overspend on SEN provisions, even if their deficits are cleared by 2028. Alarmingly, almost half of these councils foresee an increased rate of overspending in the years to come.
Councillor Amanda Hopgood, chair of the LGA’s children, young people, and families committee, expressed deep concern over the situation. “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.”
As of the current financial year, 95 percent of councils reported deficits in their dedicated schools grant for 2025/26. The LGA is urging the government to address these deficits in the final local government finance settlement and to implement reforms that would enhance support for children with SEN in mainstream schools.
The challenges are further underscored by comments from Paul Whiteman, general secretary of the school leaders’ union NAHT. He noted that even with accumulating deficits, the support provided often falls short of the needs of schools and families. “It’s urgent that this is addressed in the forthcoming White Paper, both through systemic reform and significant investment,” he added.
A focal point of ongoing discussions pertains to education, health, and care plans (EHCPs), which outline the support entitlements for children with SEN. The number of EHCPs has surged dramatically, rising to 638,745 as of January 2025, compared to 353,995 in 2019. This increase has intensified financial pressures on councils, prompting some to advocate for legislative changes that would limit EHCPs to only those with the highest needs—a suggestion that has raised concerns among many SEN parents.
Education Minister Georgia Gould has asserted that there will always be a legal right to additional support for young people with SEN. Meanwhile, recent polling conducted by Teacher Tapp for the Social Market Foundation indicates that 58 percent of teachers support reducing EHCPs to allocate more funding for early interventions and classroom-based support.
Forecasts from the Office for Budget Responsibility suggest a staggering £6 billion gap between anticipated funding and the actual costs of SEN by the fiscal year 2028/29. The government has indicated that this shortfall will be absorbed within the overall budget rather than being sourced directly from schools.
The anticipated Schools White Paper, which will outline the government’s plans for SEN reforms, is expected to be released in the coming weeks. A spokesperson from the Department for Education stated, “We’re changing the school system and ending the postcode lottery so children with SEN get the right support earlier, when and where they need it.”
As local councils navigate this critical juncture, the urgency for reform in the SEN funding system remains paramount to safeguarding the future of educational support for vulnerable children.
