Education Secretary Bridget Phillipson has declared that the government's planned overhaul of special educational needs provision aims to support children and parents rather than generate savings, as ministers confront urgent questions about a looming £6bn funding gap.
The Growing Send Financial Pressure
Government ministers are working to control escalating costs within the special educational needs and disabilities system while facing mounting pressure to explain how they will cover a substantial financial shortfall. The situation intensified after Chancellor Rachel Reeves announced in the budget that Whitehall would assume full responsibility for Send costs from local authorities starting in 2028.
Spending on Send provision by local councils has reached £12bn this year, representing a dramatic 66% increase over the past decade. Councils have repeatedly exceeded their budgets to meet legal obligations to children with special needs, creating significant financial strain across England's local authorities.
OBR Warns of Substantial Fiscal Risk
The Office for Budget Responsibility has highlighted a concerning financial projection: a £6bn funding gap in 2028-29 that could balloon to £9bn by 2030-31. This comes in addition to £14bn of cumulative extra spending since 2020 that English local authorities continue to carry off their balance sheets.
The fiscal watchdog classified this situation as a significant fiscal risk, noting the Treasury hasn't clarified how it will cover these costs. The OBR warned this shortfall could translate to a 4.9% reduction in per-pupil school funding if unresolved.
Phillipson sought to reassure Labour MPs, emphasizing that additional Send costs wouldn't impact core school allocations but would be covered by the overall government budget. She suggested the OBR's presentation might be misleading, telling Labour MPs via WhatsApp that reforms would bring cost down through measures like creating more local specialist places to reduce expensive travel requirements and private provision.
Potential Solutions and Political Concerns
The government has identified several areas where earlier intervention could reduce long-term costs. Earlier speech and language support could diminish the need for more extensive support later, while increasing mainstream specialist places represents another cost-saving approach.
Current figures reveal stark cost differences: educating a child in a specialist state school costs approximately £26,000 annually, compared to £63,000 for private provision funded by the state. The government has already committed £740m to expand mainstream specialist placements.
Liberal Democrat education spokesperson Munira Wilson proposed one solution: implementing profit caps on private providers to redirect millions from private equity back to frontline support. She described the £6bn funding hole as an indictment of government failure to properly manage the system.
The Institute for Fiscal Studies outlined three possible approaches: slowing Send spending growth through system reforms, increasing the overall schools budget with money from elsewhere, or reducing mainstream school funding to cover high needs requirements. Research fellow Luke Sibieta noted that £6bn equals roughly 9% of the total schools budget projected for 2028-29.
With a Send system white paper expected in early 2026, the government faces the dual challenge of improving support for frustrated families while addressing what Conservative shadow education secretary Laura Trott called a hidden £6bn blackhole that threatens either school cuts or reduced Send provision.
