SEND debt to hit £10bn just 18 months after government bailout, say counties

The data, based on a survey of local authorities by the Association of Local Authorities Treasurer Societies (ALATS), shows that whilst the government is providing over £5bn this Autumn to clear SEND deficits built up to March 2026, rapidly rising demand means that the debt is accumulating “almost instantly”.

In light of this, the CCN has called for a commitment from the new government to “wipe out” the deficits that continue to accumulate rapidly by March 2028, “fully absorb SEND costs beyond that date, and press ahead with full reform of the system to stop costs spiralling and to improve outcomes for children”.

The organisation claims that “anything less” than removing 90% of remaining debt by 2028 will cause a “financial catastrophe” for many local authorities – with one in 10 of surveyed councils warning this may not be enough to avoid bankruptcy.

Meanwhile, the network has warned ministers not to ‘cherry-pick’ the easiest parts of proposed SEND reforms and abandon the least popular – noting that the reforms will only succeed if they are “enacted in full”.

In January this year, the number of young people on Education, Health and Care Plans (EHCPs) reached a record high of 718,000 – a 13% rise over 12 months.

CCN said: “With the government announcing reforms to the SEND system in March, council leaders say they have seen a sharp increase in applications for EHCPs as parents, carers and schools look to secure a support plans before any changes to the system kick in.

“Consequently, costs to councils are rising exponentially and their deficits are building up again, despite government paying down 90% of deficits accumulated up to March this year through a ‘High Needs Stability Grant’, due to be paid later this Autumn.”

According to the survey, after accounting for the Autumn SEND deficit bailout, councils say their deficits are re-accruing and could reach £4.8bn by March 2027.

This is then set to more than double over the following 12 months - to a record high of £10.4bn by March 2028.

Cllr Linden Kemkaran, SEND spokesperson for the County Councils Network, said: “It is no exaggeration to say that the government’s SEND bailout, due within weeks this Autumn, is a lifeline. But whilst this bailout addresses yesterday’s debt councils are not out of the woods and tomorrow’s deficits are already building at an even faster pace. Despite this, we have little clarity from government on how much support we will receive – and when.

“Anything less than paying down 90% of this new debt would be a financial catastrophe for councils. These deficits have not accumulated because councils have chosen to spend recklessly: they are the result of having to meet rapidly growing statutory demand, which has only intensified this year, without funding keeping pace.

“If councils are left carrying billions of pounds of SEND debt, it will not just be a problem for local authorities. Taxpayers and local communities will ultimately bear the consequences as councils face impossible choices about how to protect frontline services while managing debts that have accrued through no fault of their own. We need clarity from ministers, followed by concrete action to support councils to pay down deficits.”

The Department for Education has been approached for comment.

Lottie Winson