Why scores of English councils could go bankrupt when hidden Send debt reappears

The Guardian

30-03-2025

The staggering cost of England's special educational needs and disability (Send) crisis shows no sign of easing. A Guardian investigation has revealed councils will overspend on Send services by nearly £2bn over the next year, pushing their accumulated deficits to at least £5.2bn by 31 March 2026.
The date is crucial because that is when the £5.2bn debt, hidden away off local authority books using an accounting fix for seven years, is due to come back on to the balance sheets, threatening to instantly bankrupt scores of town halls.
The government faces a massive headache: not just what to do about the rapidly increasing billions of historic Send debt, but how to keep a lid on future Send spending, which shows no sign of abating. There are no easy fixes.
The last government tried to keep a lid on Send spending by paying millions of pounds in 'safety valve' grants to scores of councils to help them develop better ways to 'manage' parental demand for Send support. Very few of the schemes have had the desired effect of driving down costs.
Of the 131 councils that responded to the Guardian, 79 signed grant agreements with the Department for Education (DfE). Only three are forecasting they will not be in deficit next year. Some of those that have slowly ground their way to near break-even say when the grants finish they will hurtle rapidly back into the red.
City of York council, the only authority surveyed by the Guardian that is projecting its accumulated Send budget deficit to move into surplus next year, was sceptical about keeping its head above water in future. 'Unless the system is changed, we will go back into deficit quite quickly,' said Bob Webb, York council's executive member for children, young people and education.
Attempts to change the system, however, could put councils and ministers on a collision course with parents and campaigners. Councils are clear they want changes to the law to give the authorities more control over which children get specialist Send support and where they are educated.
Parents say more crude attempts to ration access to education, health and care plans (EHCPs) – formal assessments that give children the legal right to Send support – will not fix a problem caused primarily by the inability of mainstream schools to meet Send pupils' needs, and those needs are not going away.
'Parents are banging their heads against a brick wall trying to get schools to give support to their children, and they get knocked back,' said Tania Tirraoro of the campaign group Special Needs Jungle.
Tirraoro said it was wrong to blame the financial woes of councils on parents exercising their legal right to Send support. '[The government] needs to write off those [council] debts. Then you need to keep writing those debts off until a programme of early intervention support and better inclusion has worked its way through the system.'
The government has put an extra £1bn into Send services and plans to create 10,000 more specialist places in mainstream schools. It is clear it wants to reform Send – a white paper is expected this summer – and that a new system must be financially sustainable. No decisions have been made yet about what to do with the deficits.
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Jane Hayman, the director for Send and inclusion at Norfolk county council, said the current system is 'broken' and 'pits parents against schools'. Norfolk's Send deficit is forecast to reach £183m in a year's time. Hayman expects the government to step in to bail out the council: 'It cannot be ignored,' she said.
Not everyone is so sure. Mike Cox, the deputy leader of Bournemouth, Christchurch and Poole council, whose forecast deficit will hit £168m by 31 March 2026, up £60m in a year, predicts: '[Government] is going to keep kicking the can down the road. The only thing that will change is that the can will get bigger and harder to kick.'