Ministers insist plans to absorb council Send debts won't hit school budgets
by Education reporterThe government has hit back at claims that its plans to include the cost of supporting children with special educational needs and disabilities (Send) in wider education spending could lead to less money for schools.
The Department for Education (DfE) said projections from the Office for Budget Responsibility (OBR) were "incorrect" and did not take into account the reforms it will set out in the new year.
The government said it would take all Send spending away from local authorities by 2028 - a forecasted £6bn of extra costs.
Councils welcomed the change, saying rising costs had made Send spending "unsustainable", but teaching unions echoed the OBR's warning of an impact on school spending.
Local authorities currently receive a ring-fenced grant from the DfE to pay for special needs support, known as the dedicated schools grant.
But rising demand has led to local councils spending billions more overall on Send than they get from central government.
The number of young people with council-funded education, health and care plans (EHCPs), which set out the support they are entitled to, has doubled across England since 2016.
Since 2020, those Send debts have been kept off local authority books by a "statutory override" – which had been extended to 2027-28. Without it, many councils have warned they face rising costs and even bankruptcy.
The OBR has forecast that councils will have cumulative deficits of £14bn by the end of 2027-28, when the statutory override expires. It is not clear how much responsibility for paying this back will stay with councils.
It was announced in Wednesday's Budget that the full cost of Send provision will be absorbed within departmental budgets by 2028-29, which means the future cost pressures of the Send system will sit on the government's books, rather than councils'.
But the OBR warned that no savings have been identified yet to offset the estimated £6bn of costs they said this move will create.
If that money had to be taken from existing school budgets, it said it would lead to a 4.9% fall in mainstream school spending per pupil, rather than the 0.5% increase planned by government.
But the DfE strongly refuted those predictions, with a spokesperson saying they "do not account for the much-needed Send reforms this government will bring forward".
"We inherited a Send system on its knees and our changes will make sure children get support at the earliest stage, while bringing about financial sustainability for councils," they added.
Full plans for reforms to the Send system are due to be laid out early next year.
Until then, it is unclear how the government will manage the struggle between rising Send needs and ballooning costs.
Cllr Matthew Hicks, chair of the County Councils Network, said the government's commitment on Send spending was a "positive step in limiting councils' exposure to unsustainable expenditure", but said there was still uncertainty over what would happen to council Send debts accrued before 2028.
The Association of School and College Leaders (ASCL) general secretary Pepe Di'Iasio said any fall in school spending "would clearly have a catastrophic impact on educational provision".
"It is imperative that the government sets out how it intends to address this issue as a matter of urgency," he added.
The National Education Union (NEU) has said it will consider strike action if the concerns around school funding are not addressed, with an executive meeting on Saturday planned to "decide next steps".
Mum Aimee Bradley, who has three autistic children and runs the parent campaign group Send Sanctuary UK, says parents are worried about the lack of detail in the Budget on Send.
"If they're planning major changes to the Send system, then money needs to be put into it -but as of yesterday's Budget, all we have is extremely vague detail," she says.
"People need answers, and parents, myself included, are left worried."
Anna Bird, chair of the Disabled Children's Partnership, said there was a "lack of clarity" about how Send costs will be met, adding that she was "concerned that the government is unrealistic about the amount of time it will take to turn round the Send system".
Luke Sibieta, from the independent thinktank the Institute for Fiscal Studies, said the government had three main options for addressing the Send funding gap:
- Slowing the growth in Send spending through reforms - "though changes will take time to be felt"
- Topping up the overall schools budget
- Reducing mainstream school funding to pay for high needs funding
The government has recently pushed back its white paper setting out Send reforms until the new year, saying it will take more time to consult with parents and other groups.
The government is under pressure from backbench Labour MPs not to cut Send provision, and avoid a similar backlash to the one in response to proposed welfare cuts earlier this year.
Shadow Education Secretary Laura Trott told BBC Politics Live the government "has got to be honest" about where the £6bn to pay additional Send costs will come from.
"Either it's going to be a cut to schools, or it's going to be a cut from the Send budget," she said.
Liberal Democrat education spokesperson Munira Wilson said the £6bn funding gap was "a damning indictment of this government's failure to get a grip on the system", adding that ministers "must not solve this crisis by raiding the budgets of mainstream schools".
The National Audit Office described the wider Send system as "broken" in a wide-ranging report last year, and said it was "not delivering positive outcomes for children and young people" despite huge increases in funding.