SEND and Alternative Provision system “very likely” to become financially unsustainable: Department for Education
The SEND and Alternative Provision (AP) system is “very likely” to become financially unsustainable, with high needs pressures continuing to outstrip available funding, the Department for Education (DfE) has warned.
In its annual report and accounts, the DfE increased its risk register to “critical – very likely” in relation to the SEND system becoming “financially unsustainable”, and in relation to the risk that the social work workforce will “lack capacity and stability to meet demand”.
The report noted that 2023 saw the second highest turnover rate and vacancy rate for child and family social workers since 2017.
The department also registered the risk as “very likely” that local authorities will be unable to access appropriate placements to meet the needs of children in their care; and that the prices they pay will continue to increase.
The DfE warned there is a risk of “disorderly exit” of some providers from the market, which would worsen the position.
In order to mitigate the risk, the Government said it is reforming children’s social care services to invest in earlier support to keep children safely at home, to reduce the number of children in care.
Further, it is prioritising working with local authorities to recruit 500 extra fostering households by March 2026.
According to the report, in the last financial year, the DfE spent £67 million in response to RAAC, with the collapse of school buildings still rated “critical – very likely”.
Andy Smith, President of the Association of Directors of Children’s Services (ADCS), said: “It is unsurprising that the financial sustainability of the SEND and AP system and failure of the care placement market are amongst the biggest risks managed by the Department, ADCS members have been raising these significant issues for some time.
“The unintended consequences of implementation of the 2014 SEND reforms have led to a shift away from mainstream education and an unsustainable demand for EHCPs, leading to significant high-needs funding deficits expected to reach £5 billion over the next two years. While the system is unaffordable, it is also not delivering the outcomes we wish to see for our children and young people.”
He continued: “The Competition and Markets Authority, Independent Review of Children’s Social Care and the Department for Education have all acknowledged the dysfunctional placements market. The children we care for deserve to live in homes that meet their needs and are as close to the people and places they know as possible. However, finding the right home is increasingly difficult due to the significant shortfall in suitable homes in the right locations. Children's services have long operated in a mixed economy with private, voluntary and community providers involved in the delivery of services locally. However, profiteering by some large private providers and growing private equity involvement is a concern as is the considerable levels of borrowing and debts that some private companies are holding. Should any of these providers fail, no single local authority could step in, and it would be children who suffer the greatest consequences.
“We urgently need the government to develop a comprehensive national placements strategy and address profiteering so that the right homes are available when and where they're needed and at a cost that is affordable to the public purse.”
Lottie Winson
