The government's decision to take over special educational needs and disabilities (Send) spending from local councils has sparked warnings of a £20bn fiscal timebomb for the Department for Education (DfE). The Office for Budget Responsibility (OBR) revealed that annual Send costs in England could reach £6bn by 2028, with historical council deficits projected to hit £14bn by the same year. This combined burden threatens to force significant cuts to mainstream school funding unless reforms are implemented.
The OBR warned that if the projected £6bn annual extra costs were fully funded through the DfE's core schools budget, it would imply a 4.9% real fall in mainstream schools spending per pupil from 2028-29, rather than the planned 0.5% increase. This stark assessment underscores the urgency of the government's planned Send reforms, expected in a schools white paper early next year.
Chancellor Rachel Reeves stated that the imminent reforms were 'not about money' but about creating a system that works for children, parents, and schools, emphasising integration into mainstream schools where possible. However, the OBR noted that the government has not yet set out how it will address the accumulated council deficits, representing a 'significant fiscal risk'.
Local government leaders welcomed the removal of the Send spending burden from councils but expressed uncertainty over the £14bn deficit. Councils have warned that without structural reforms, Send services face 'total collapse'. The deficits are currently held off council balance sheets via an accounting override due to expire in 2028, which could lead to nine out of ten upper-tier authorities effectively declaring bankruptcy.
Send spending has surged due to a doubling of education, health and care plans (EHCPs) to 639,000 over the past decade, driven by rising demand for support for conditions such as autism and mental health needs. This has forced councils to rely on expensive private special schools. The Institute for Fiscal Studies warned that the government is 'running out of time' for reforms to deliver significant savings in this parliament.
