Local authorities are set to spend £12bn on special educational needs and disabilities (SEND) services by 2026, increasing the “risk of widespread insolvency”, according to the County Councils Network (CCN).
An independent report by the Isos Partnership, published today (25 July) and commissioned by the CCN and Local Government Association, found that the rising costs for SEND have “outpaced” reform and funding from the previous government.
In 2015, councils’ SEND related expenditure was £4bn; however the report has forecast that spending on the services will triple by 2026. In this period, 500,000 more children and young people have been identified as having special educational needs.
The report also noted that cumulative deficits for SEND services reached £3.2bn this year but are projected to rise to £5bn by 2026. It stated that if the statutory override came to an end tomorrow, 1 in 4 councils surveyed said that they would cease to be solvent within a year or less, with half stating they would cease to be solvent in three years or less.
Currently, councils can overspend their SEND budgets due to the statutory override granted by the Department for Levelling Up, Housing and Communities (now the Ministry of Housing, Communities and Local Government) until March 2026.
Insolvency risk
Commenting on this research, Dr William Burns, social care policy adviser at CIPFA, said: “It is CIPFA’s view that the tenfold increase in the national SEND deficit of £3.2bn shows that the current SEND system is broken.
“Outcomes have not improved since landmark reforms in 2014, and local authorities are facing a financial cliff edge which puts all other council services at risk.
“In particular, CIPFA notes multiple financial issues. These challenges include a shortfall of funding, ineffective distribution of funds, and the risk of widespread insolvency.”
The report, commissioned by the CCN, argued for a “more radical” programme of reform, one focused on meeting the needs of more SEND children in mainstream education. It stated that reforms should include a new “national framework” for SEND and establishment of “Local Inclusion Partnerships”.
“SEND is one of the most urgent short-term pressures that local authorities face. Far-reaching reform is now unavoidable.
“CIPFA calls on the new government to act urgently to overhaul the system, address the shortfall in funding, change the system of ringfencing and produce an exit strategy on how local authority SEND deficits can be overcome,” Burns added.
This comes as a new report by CIPFA, published yesterday (24 July), revealed that 75% of local authority budgets in 2022/23 was spent on social care.
Overall, the study highlighted that despite local authorities spending an increasing proportion of a reduced funding envelope on adult social care, rising demand continues to “plague” the whole social care system.
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