LGA claims eight in ten councils will become insolvent over “mounting deficits” related to cost of providing SEND support

There were nearly 640,000 Education, Health and Care Plans as of January 2025. The number has increased each year since their introduction in 2014.

The LGA warned that while councils are “firmly committed” to upholding the entitlements of all children and young people with SEND, they are clear the system needs “urgent reform”, so children and young people receive the high-quality support they need.

Councils are currently able to keep high needs deficits off their main balance sheets through a temporary accounting mechanism known as a “statutory override”.

The LGA survey found that 95% of councils responding had high needs dedicated schools grant (DSG) deficits. 

With the statutory override due to end in March 2028 when the deficits would move on to councils’ books, 79% of councils responding to the survey said they will not be able to set a balanced general fund budget in 2028/29.

Without action, the LGA said this risks “undermining their ability to plan sustainable services and improve outcomes for children and families”.

It added: “Despite record levels of investment and the high rate of assessment and identification of needs, there is no clear evidence that outcomes for children with SEND have been improving.

“The provisional Local Government Finance Settlement in December indicated the Government would act on the deficits. With the final settlement expected to be published soon, the LGA is urging the Government to write off councils’ high needs deficits.”

According to the LGA, the Office for Budget Responsibility has forecast that councils’ cumulative high needs deficits will reach £14 billion by the end of 2027/28.

The Government is expected to set out its plans to reform the SEND system in the upcoming Schools White Paper.  

Cllr Amanda Hopgood, Chair of the Local Government Association’s Children, Young People and Families Committee, said: “There is a widely held consensus that the SEND system is broken and not working for children, their families and councils. 

“Councils are committed to supporting every child and young person to achieve their potential and clearly what is important is that children and young people get the support they need. But under the current system, the rise in support need has left many councils buckling under the strain."

She added: “The huge costs in providing support are threatening most councils with insolvency.  

“This is why we are urging government to write off councils’ high needs deficits in the final Local Government Finance Settlement.

“However, it is important to note that the challenges within the SEND system are not just financial. The Schools White Paper must deliver brave and bold reform where more children are able to get the support they need in a mainstream school, without having to go down the route of needing a statutory plan.” 

A Department for Education spokesperson said: “We’re ending the postcode lottery of SEND provision by strengthening support and protecting parents’ rights – shaped directly by the views and experiences of those who know the system best.

“The changes will make sure children get support at the earliest stage, while bringing about financial sustainability for councils. We are clear that any deficit from 2028-29 onwards will be absorbed within the overall government budget.

"Work is already underway to reform the system including through investing £200 million to train all teachers on SEND and at least £3 billion to create 50,000 new specialist places.”

The LGA’s survey came in the same week that the Disabled Children’s Partnership (DCP), alongside parent groups ‘Let Us Learn Too’ and ‘SEND Sanctuary’ warned that although SEND reform is necessary, it “must not come at the expense of children’s legal protections”.

The groups insisted amongst other things that SEND reform must not strip away legally enforceable plans for children who need them, narrow the definition of special educational needs to restrict eligibility, nor abolish the SEND Tribunal, which they described as “a vital safeguard for families”.

Lottie Winson