The SEND Crisis: a system at breaking point

Good afternoon from New Economy Brief.

Special Educational Needs provision in England is at breaking point, left under-resourced by austerity and reliant on costly private provision. With a much-anticipated Schools White Paper expected in the coming weeks, this week’s New Economy Brief takes a look at the crisis and what it means for families, councils and the wider economy.

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The SEND picture in England: a system in crisis

In England, local authorities are responsible for identifying children and young people with special educational needs and disabilities (SEND), who have a right to receive special educational provision. More than 1.7 million children in England receive support for special educational needs, up almost a third since 2016. Those with more complex needs have Education, Health and Care Plans (EHCPs), and these have more than doubled to nearly 500,000 - over 5% of all pupils.

Rising demand and squeezed budgets. Unsurprisingly, these increases have squeezed  local authority finances. In 2020 the Government effectively let them keep SEND spending in excess of the Department for Education (DfE) grant funding they received off their balance sheets until 2023. This ‘override’ was then extended to 2026 and then again to 2028. This has helped councils meet their legal requirement to run balanced budgets, but it hasn’t solved the problem – providing SEND support is a statutory duty, and it still costs them more than they receive from the government. To cover the gap, many are either borrowing more or cutting non-statutory services. 

Councils’ deficits from SEND spending have therefore been increasing, from £0.2 billion in 2020/21 to around £2.5 billion in 2025/26. The Office for Budget Responsibility now forecasts cumulative deficits will reach £14 billion by 2028. The Government says all SEND spending after this must come from existing day-to-day spending budgets, but hasn’t yet explained how this will be achieved. 

It is a large-scale and severe problem: last weekend the Local Government Association said 95% of local authorities run a SEND deficit, and this will bankrupt 80% without government reforms. Some councils have even proposed raising funds by increasing council tax above the normal 4.99% maximum – a request the government granted only this week. 

Private provision and short-termism. Growing demand means local authorities increasingly rely on private provision in the face of insufficient state capacity, and councils can spend as much as £250,000 a year per pupil doing so. To make matters worse, analysis of public service ownership by Common Wealth highlights that many independent schools used to meet SEND demand are ‘owned by offshore companies, private equity and, in at least one case, by an Abu Dhabi sovereign wealth fund’.

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Long-term consequences for children and families

This broken system’s impact on the children it should support are far-reaching. Estimates from IPPR suggest the rate of achieving grade 5 or higher in English and maths amongst children receiving support for special educational needs is half the national average. 

SEND and poverty. Beyond educational outcomes, the Joseph Rowntree Foundation found  that ‘children with SEND are more likely to become poor, while children living in poverty are more likely to develop SEND’ a decade ago, and research from the Childhood Trust shows that almost three quarters of social workers feel the cost of living crisis is disproportionately impacting children with SEND.

The crisis affects families unevenly. Sutton Trust research finds children from poorer households are more likely to have SEND, but wealthier families are more able to fund private provision or to challenge assessments. These inequalities persist: children with SEND who are also eligible for free school meals have lower outcomes by 16 than their peers who are not eligible.

A broken system is forcing families to extreme lengths. Behind these statistics, thousands of families are managing the cost of a failing system themselves; from children making 80+ mile round trips to access appropriate private provision, to parents leaving work to homeschool children whose needs mainstream education can’t meet. Research for ITV found that a third of parents had to use the legal system to get their children’s needs met, a process one mother said left her ‘at a point where you can’t function anymore, but the demand is still there from everyday life’.

Quality and breadth of provision are suffering too. When surveyed by the National Education Union, just one in ten teachers in mainstream schools reported having sufficient access to specialist SEND support. For children assessed for an  EHCP, less than half (and falling) receive their plans within the statutory 20 weeks.

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Ambitious reform is needed

Ahead of the White Paper’s publication, ministers have trailed reforms including 10,000 new SEND places and a £200m investment in teacher training. 

But as IPPR argues, complex, systemic failings have created an ‘inevitable compounding downward spiral’, and ‘incremental reform of the existing system is not an option.’ Fundamental reform is needed to provide better, more accessible SEND support and fund it sustainably for the long term.

Improving Access and Quality. The Association of School and College Leaders has outlined recommendations including building workforce capacity through specialist SEND qualifications, sustained investment in SEND provision and adding more specialist state school places.

Meanwhile the Independent Provider of Special Education Advice calls for greater accountability, with a “a zero-tolerance approach to local authorities that fail in their duties to children and young people with SEND.” The Disabled Children’s Partnership has also warned ministers that legal rights for disabled people are ‘red lines’. 

Fixing the funding. But improving services will be hard without fundamental changes to the way SEND provision is funded and structured. Pressure from local authorities to have their SEND deficits written off has been growing. This week the Government announced the cancellation of 90% of councils’ historic SEND-related deficits up to 2025-26. But as the County Councils Network argues, if the system’s structural problems aren’t dealt with, “costs [will] continue to outstrip available funding, even if deficits are cleared.”

IPPR advocates for a redesign of the whole education system to prioritise early intervention and inclusion rather than treating SEND provision as a separate system. This would rebalance funding and resources, “allowing mainstream settings to deliver additional support where and when children need it”. 

Councils’ finances are struggling on multiple fronts. It’s also important to remember that SEND costs are far from the only threat to council budgets. Pressures on other statutory services like adult social care and temporary accommodation have also left them at breaking point, as we explored last year. Non-statutory services have been cut to pay for the statutory ones, and restoring these will take still more funding. 

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The political risks of getting reform wrong 

The Government has already seen what happens when it gets reforms wrong – just look at its attempt to change disability and incapacity benefits last year. 

And there are warning signs: ahead of the White Paper there have been hints that the government might move to reserve EHCPs for those with the most complex and severe needs. Parents and campaigners have understandably met these suggestions with concern, although DfE minister Georgia Gould has reassured families that children will not have their current support reduced, or lose their specialist school places. 

The Schools White Paper will be a critical test of whether the Government can deliver much-needed change to meet children’s and parents’ needs, support those working in the sector and provide long-term sustainable funding. With parents fearing loss of provision, MPs foreseeing a potential rebellion and council finances buckling under pressure, the stakes to get these reforms right couldn't be higher.