The government’s £1bn uplift to special educational needs and disability (SEND) announced in the autumn 2024 budget aims to transform England’s SEND system and return local authorities to financial sustainability.
While there is no doubt that the SEND system requires urgent reform to ensure better outcomes for vulnerable children and young people, and to secure the financial sustainability of local authorities, it is highly complex and there is no quick fix to the pressures faced.
How we got here
The implementation of the Children and Families Act 2014 introduced Education, Health & Care Plans (EHCPs), co-produced with parents and requiring local authorities and health partners to jointly assess and commission services for children and young people with SEND. Since implementation, however, the number of EHCPs maintained by local authorities in England has been increasing. There was a 70% increase between 2017 and 2024 and, as at January 2024, 576,000 children had EHCPs. And over a million school pupils have SEND support.
The cost of SEND provision has risen by 58% in the last 10 years
Supporting children in mainstream schools wherever possible is widely seen as providing the best start in life for children and young people with SEND, and is considered more cost-effective.
In spring 2024, 69% of primary school and 73% of secondary school leaders surveyed by the National Audit Office (NAO) were confident their schools could support pupils with SEND. But there are limited incentives for schools to be inclusive. For example, the school performance data focuses on academic attainment, and Ofsted does not include a separate judgment on SEND provision, and no specific school funding focuses on inclusivity.
Increases are also being seen in the number of those with SEND being placed in independent special schools, where local authorities have limited control over the costs of placement – up by 17,000 between 2018/19 and 2023/24. This cost local authorities £2bn in 2022-23, a real-terms increase of 46% from 2018-19. Independent schools cost local authorities an estimated £61,500 per person compared to £23,900 in state special schools.
In fact, the cost of SEND provision has risen by 58% in the last 10 years, to £10.7bn a year in England, placing significant pressure on local authority budgets. The Department for Education (DfE) estimates that 43% of local authorities will have deficits exceeding or close to their reserves in March 2026. The Association of Directors of Children’s Services (ADCS) has stated that the SEND system is unaffordable.
Action plans
In March 2023, the DfE and Department of Health and Social Care (DHSC) published a SEND & Alternative Provision improvement plan, ‘Right Support, Right Place, Right Time’, but as this plan was published by the previous government, it no longer represents official policy.
High-needs funding has been increased by the government over the last decade – at the point in time when the improvement plan was published, the government had allocated £2bn additional funding for schools in the autumn 2022 financial statement. The plan confirmed that £400m of this would be allocated to local authorities’ high needs budgets in the 2023/24 financial year. A further £1bn uplift was announced in the autumn 2024 budget, the second biggest ever year-on-year increase.
Local authorities with the highest deficits can take part in the DfE’s Safety Valve programme
A statutory override allowing councils to hold high-needs budget deficits off the balance sheet until March 2026 has also been implemented, although concerns about this approach have been raised as posing an imminent risk to the financial sustainability of councils at the end of the override period.
In addition, local authorities with the highest deficits (as a result of high needs spending), had been invited to take part in the DfE’s Safety Valve programme. Introduced in 2021, authorities were invited to develop agreements to reach an in-year financial balance and a long-term plan to pay off the historic Dedicated Schools Grant deficit, while delivering support for children and young people. In return the DfE provided funding to pay off, partially or wholly, the local authority’s deficit. To date, 38 local authorities have made agreements with the DfE.
However, at the start of December 2024, the government confirmed that, pending wider reform of the whole system, it will not enter into any more Safety Valve agreements for councils in financial deficits. It also announced a £740m cash injection (part of the £6.7bn capital settlement for education announced in the autumn budget) for use to adapt classrooms to be more accessible for children with SEND, and to create specialist SEND facilities within mainstream schools.
Addressing the crisis
Since publication of the SEND improvement plan mentioned above, there have been two reports of note making recommendations to respond to this unfolding crisis.
‘Towards an effective and financially sustainable approach to SEND in England,’ published in July 2024 by the Local Government Association, found that reform of the SEND system was essential and makes eight recommendations around a national ambition for SEND, enabling inclusion and establishing the underpinning conditions to support partnership working.
One common thread to improving outcomes is around greater inclusion
Support for children and young people with special educational needs, published in October 2024 by the NAO, concludes that the government needs to think urgently about how its current investment can be better spent, including through more inclusive education, identifying and addressing needs earlier, and developing a whole-system approach to help achieve its objectives.
There is general agreement that the SEND system is broken and requires urgent reform. So while additional funding may resolve financial challenges in the short term, SEND reform needs to include clear government plans to stabilise finances.
One common thread to improving outcomes is around greater inclusion. In particular, the NAO report refers to the need for special schools to continue to provide placement for pupils with the most complex needs, while also sharing expertise with mainstream schools. However, it’s also important to identify and address needs earlier, and ensure those with accountability (including local authorities and health providers) can provide support.
Leading neurodiversity experts would be working closely with the DfE
In response to the ongoing challenges, the Education Committee, a cross-party committee of backbench MPs which scrutinises the work of the DfE, have launched an inquiry focussing achieving short-term stability and long-term sustainability for the SEND system, improving experiences and outcomes for children and young people. In addition, the government recently appointed Dame Christine Lenehan as its strategic adviser on SEND, and Tom Rees, chief executive of Ormiston Academies Trust, to lead a group of experts looking at inclusion in mainstream education settings.
It also announced that leading neurodiversity experts would be working closely with the DfE to help understand how to improve inclusivity and expertise in mainstream schools in a way that works for neurodivergent children and young people. Ofsted has stated it will be looking at how inclusion could be brought into inspection.
The government acknowledges that now is the time for bold reform and that the direction of that reform is inclusion – that is, improving inclusivity and expertise in mainstream education settings. This work will be led by experts looking at a range of strategies and policies to deliver change that is so desperately needed.
