Councils say 59 authorities could go bankrupt by March 2028 without urgent structural reform
Blog Category child education
Blog description Rising Demand
- The number of Education, Health and Care Plans (EHCPs) — statutory plans that legally entitle children to special-education support — has surged dramatically. According to the County Councils Network, EHCPs reached 638,000 in 2024–25, and could rise to 840,000 by 2028–29.
This growing demand is putting severe pressure on local authorities, as more children need formal, legally backed support.
According to parliamentary evidence, the demand is being driven by increasing numbers of children with autism spectrum disorders (ASD), speech, language and communication needs (SLCN), and social, emotional and mental health (SEMH) needs.
Financial Strain on Local Authorities
- Councils warn they may run up £18 billion in SEND-related debt by the end of the decade.
The National Audit Office (NAO) describes the SEND system as financially unsustainable.
Many local authorities rely on a “statutory override” (an accounting mechanism) to hide their deficits — but this override is due to expire in March 2026, potentially exposing true funding shortfalls
The Institute for Fiscal Studies (IFS) warns that without reform, the high-needs deficit could grow to over £8 billion by 2027.
Cost of Provision
- Special school placements are much more expensive than mainstream ones: a special school place costs around £72,000/year on average, compared to about £10,000/year in mainstream schools.
Because of the lack of capacity in the public sector, many councils are forced to pay for private or independent special schools, driving up costs further.
Despite rising funding (e.g., the high-needs budget is over £10.7 billion in 2024–25), the system is not delivering proportionate improvements in outcomes, according to the NAO.
Systemic Risks and Warning Signs
- The CCN report warns that 59 upper-tier authorities could be effectively bankrupt by March 2028 if urgent reforms aren’t made.
The NAO has issued a red flag: 43% of local authorities may issue a section 114 notice (a form of bankruptcy) when their financial “override” expires.
There are criticisms that existing reforms or savings programs (such as the DfE’s “Safety Valve” schemes) aren’t happening fast enough or aren’t sufficient to avert the crisis.
Impact on Children and Families
- Parents and schools report long waiting times for EHCPs: only around half of plans were issued within the legally required 20-week timeframe in 2023.
School leaders claim that because of financial pressure, they are cutting teaching assistants, specialist staff (like therapists), and reducing hours — undermining the quality of support for SEN students.
There is a risk that limited capacity in state provision is being replaced by profitable private providers, which might prioritize profit over best outcomes for children.
Stakeholders (e.g., NAO) call for whole-system reform, arguing for a long-term plan that combines education, health, and social services around children’s needs.
Calls for Reform
- The NAO recommends that the government explicitly plans for system-wide reform: improving financial sustainability, better aligning health and education priorities, and building a more inclusive mainstream system.
Councils are demanding urgent structural reforms so that the SEND system doesn’t financially collapse and children continue to get legally mandated support.
According to parliamentary committee evidence, there’s a pressing need for long-term investment, better planning of specialist places, and clearer shared accountability
Why It Matters
- If the SEND system collapses, vulnerable children may lose crucial educational, therapeutic, and social support.
- Local authorities may face financial insolvency, which could lead to cuts not just in SEND but in other public services.
- Without reform, the rising demand (especially for complex needs) could force more reliance on costly private provision, potentially limiting access for less-resourced families.
- The current crisis risks undermining inclusion goals: children with SEN may be marginalized, or mainstream schools may not be equipped to support them properly.
Special educational needs services in England face “total collapse”, with councils on course to have run up debts of £18bn by the end of the decade as a result of increasing numbers of children requiring extra teaching support in schools.
Without urgent structural reform of the system, the cost of accelerating demand for special educational needs and disability (Send) support could push about 59 upper-tier authorities into effective bankruptcy by March 2028, councils have warned.
The government is now preparing long-delayed and potentially controversial changes to the system aimed at putting a lid on rising spending while meeting the specialist needs of more children within the mainstream schools system.
A report published on Friday by the County Councils Network (CCN) called on ministers to write off councils’ accumulated Send debts alongside legislative changes and reforms to Send appeal tribunals to reduce access to specialist support. Parents would fiercely oppose such changes.
“The system is heading towards total collapse in little over four years. This could mean families facing even longer waits for support, councils facing a level of demand that the system was never designed for, and local authorities staring down unimaginable deficits of almost £18bn,” said Matthew Hicks, the CCN chair.
The Department for Education said it had “inherited a Send system on its knees” leaving thousands of families struggling to get the right support. “We’re determined to put that right by improving mainstream inclusion so every child can thrive at their local school,” a spokesperson said.
Send spending has ballooned in recent years, triggered by steep rises in demand for and cost of education and health care plans (EHCPs). These give children and young people up to the age of 25 the legal right to support from councils for conditions such as autism, and speech and language difficulty.
According to the CCN report, the number of EHCPs issued rose to a record 638,000 in 2024-25, with as many as 840,000 forecast to have EHCPs by 2028-29, equivalent to one in 20 children and young people.
“This is a level of demand with which the system was never designed to cope, and as such, parents are facing an adversarial system in which they feel they have to battle relentlessly to get assessment and support for their child’s educational needs,” the report says.
Autism and other neurodiversity needs, social and emotional health, and language and communication difficulties account for more than two-thirds of EHCPs in English schools, the report says.
Surging numbers of EHCPs – which in theory guarantee suitable levels of educational support for individual children – have forced councils increasingly to rely on private specialist schools, some owned by private equity investors, to meet demand.
The CCN report estimates that 34,000 pupils are in special schools at an annual average annual cost per place of £72,000, far higher than the average yearly cost per place of £10,000 in mainstream schools.
A comprehensive survey of English councils using freedom of information requests carried out by the Guardian earlier this year revealed councils’ total forecast accumulated Send deficits at the end of March 2025 was £3.2bn, rising swiftly to £5.2bn by the end of March 2026.
The survey carried out for the CCN report estimates that councils’ total accumulated deficit would rise to £6.6bn by the end of March 2026, £13.4bn by the end of March 2028, and £18bn a year later, suggesting an even more rapid rise in Send spending above the level of funding provided by government.
March 2028 is a pivotal date for councils as at this point a so-called “override” accounting arrangement allowing authorities to keep Send debts effectively hidden off the balance sheet comes to an end. Putting the debts back on the books would instantly render many councils effectively insolvent.
“We often hear of the black hole in public finances but Send deficits totalling billions of pounds are being hidden in local authority accounts. Without prompt government intervention, we risk an unprecedented local authority financial crisis,” said Lorna Baxter, president of the Association of Local Authority Treasurers.
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A policy researcher and education writer focused on UK public services, with a particular interest in special educational needs, local government finance, and children’s welfare. They analyze emerging trends in education policy and aim to make complex public-sector issues accessible to general audiences.
Notes (if any)
- Demand for EHCPs has grown sharply in the last decade, putting unprecedented strain on councils.
- Many local authorities face multi-million-pound deficits in their high-needs funding blocks, some exceeding hundreds of millions.
- The “statutory override,” which currently prevents SEND deficits from appearing on council balance sheets, is due to end in March 2026, heightening concerns about widespread Section 114 (bankruptcy) notices.
- Special school places cost much more than mainstream provision, and shortages in public-sector capacity have led to increased reliance on costly private schools.
- The National Audit Office warns that the current SEND system is financially unsustainable and requires comprehensive, long-term reform.
- Parents have reported long delays for EHCP assessments, with many councils failing to meet the legal 20-week deadline.
- School leaders say budget pressures are forcing them to cut teaching assistants and specialist support roles, reducing the quality of SEND provision.
- Children with the most complex needs are at the highest risk of falling through the cracks if systemic collapse occurs.
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