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Some of England’s largest councils have warned that the increasing cost of supporting children with special educational needs and disabilities (SEND) could push some local authorities to bankruptcy within a few years.
The County Councils Network said many local authorities were struggling to cope with increased demand and that the money councils receive from central government under the Dedicated Schools Grant (DSG) was not sufficient.
The report states the national high-needs block deficit will hit £6.6 billion in 2025/26, and, without urgent reform, will more than double to £13.4 billion by March 2028, when the statutory override that currently shields councils’ balance sheets is due to end.
One in three councils say they could be forced to effectively declare bankruptcy before the override ends because of increased costs. That rises to nearly nine in ten once the override is lifted, the report warned.
Kevin McDonnell, headteacher at Stormont House School (a school for children with SEND in Hackney, London) said: “If we truly want a high-quality, inclusive education system we will need to resource it properly. The current system is adversarial and often unhelpful.”
Even with the override currently in place, councils are experiencing severe financial pressures. Lost interest, borrowing requirements and other associated costs are expected to total £400 million this year, rising to nearly £1 billion by 2028/29. Finance officers warn this is already eroding day-to-day budgets at a time when councils are struggling to maintain core services.
Mr McDonnell said: “The statutory override is hiding the scale of the problem and in March 2028 we risk an implosion of local authority services through bankruptcy. This is surely something all political parties would wish to avoid….
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