£5bn council SEND debts to be paid off by government

The government has said it will spend £5bn to pay off 90% of the debts English councils have built up through supporting children and young people with special educational needs and disabilities (SEND) to the end of the financial year.

The LGA, which represents councils in England, welcomed the plans, saying it "removes the immediate threat of insolvency for many councils".

The government is expected to lay out their full plans for SEND reform in the Schools White Paper in the coming weeks.

Councils have a legal duty to identify and support children with special educational needs. But rising demand in recent years has meant they have been spending billions more than they receive from the government.

These SEND deficits are currently being artificially held off council books by a statutory override, which is due to expire in 2028. The government then plans to take responsibility for SEND funding.

Projections from the Office for Budget Responsibility (OBR), which assesses government spending, warned the combined cost of historic council deficits on SEND could reach £14bn by then.

But councils have warned of widespread bankruptcies if they were required to pay back historic debts in full.

From this autumn, councils in England will now receive a grant paying off 90% of any deficits that they had built up to the end of this financial year.

It applies to funds in the high needs block of the dedicated schools grant, which comes from the government and is used to pay for SEND support.

Cllr Louise Gittins, chair of the LGA, welcomed the plans, calling it a "recognition that these costs are not of councils' making and have accrued due to a broken system that is urgently in need of reform".

She added that fully writing off the historic and future deficits "remains critical".

A record 1.7 million pupils in England receive some support for special educational needs in school, and the number of those receiving the higher level of support through education, health and care plans (EHCPs) has more than doubled in a decade.

The government has also faced calls from MPs to put more money into mainstream school budgets, to support their plans to overhaul the SEND system. It has previously announced a £3bn investment towards creating 50,000 specialist school places within mainstream schools.

The Department for Education said "to deliver lasting change for families, our reforms must be built on strong foundations and that's why we are working in partnership with councils"

"Our Schools White Paper will set out our full plans to bring forward an inclusive education system that enables all children to achieve and thrive, while ensuring financial sustainability for councils."

The government has said it will set out further details on how it plans to deal with any deficits built up from April 2026 to April 2028, when the statutory override is due to expire, in the upcoming Schools White Paper.