A concerning report from the Local Government Association (LGA) has highlighted a looming financial crisis that could affect over half of the councils responsible for supporting children with special educational needs and disabilities (SEND). This crisis stems from the upcoming expiration of the "statutory override," a temporary accounting measure that currently allows councils to manage SEND-related spending deficits separately from their main financial statements.

Without this measure, which is set to expire in March 2026, many councils anticipate severe financial distress. According to the LGA's findings, 53% of councils project they will not be able to balance their budgets in 2026/27. This figure is expected to increase to 63% in 2027/28 and 65% in 2028/29, highlighting a growing trend of financial instability.

The increase in financial pressure is primarily due to the rising demand for SEND support services. Since the introduction of the Children and Families Act in 2014, the number of children and young people requiring Education, Health and Care Plans (EHCPs) has surged by 140%, from 240,183 in 2014/15 to 575,973 in 2023/24. This rise has significantly escalated the costs associated with providing necessary support, with councils anticipated to face a combined high needs deficit of approximately £5 billion next year.

In response, the LGA is urgently calling for government intervention in the upcoming Spending Review. Their primary request is for the government to erase the high needs deficits that are crippling council budgets. The LGA emphasizes that without such measures, many councils will struggle to maintain the essential services required by children with SEND.

Cllr Arooj Shah, Chair of the LGA’s Children and Young People Board, stresses that the discontinuation of the statutory override not only risks the financial health of councils but also threatens the integrity of support systems crucial for SEND children. Cllr Shah argues for a bold approach in the Spending Review, advocating for not only the clearance of existing deficits but also for a comprehensive plan to enhance inclusion within mainstream education settings. Such reforms would ensure that schools, early years settings, and colleges are better equipped to meet the diverse needs of SEND students.

Kerry Booth, Chief Executive, Rural Services Network: "The figures projected by the LGA paint a stark picture of a crisis that will not only strain local government resources but also jeopardise the quality and availability of essential services. We urgently need a sustainable funding model that addresses the dramatic increase in demand for Education, Health and Care Plans. Without robust government action and proper financial safeguards, rural communities face disproportionate challenges, further widening the disparity in service provision. It's imperative that the upcoming Spending Review delivers not just a short-term fix but a long-term strategy to ensure all councils can continue to support their most vulnerable residents".