The SEND system in England is in crisis. Rising numbers of children with EHCPs are pushing councils’ high-needs spending up, while mainstream schools struggle to provide core support. Darcey Snape of the IFS warns that without urgent reform, councils face growing deficits and families risk being let down.

The special educational needs and disability (SEND) system in England is currently in crisis. Councils, schools, and families are all grappling with rising numbers of children with identified needs, rapidly increasing costs, and significant gaps in provision. Without reform, the cost burden on councils will continue to spiral and many children’s needs may go unmet.

Rising numbers and changing patterns of need

It is crucial to understand how we have ended up in such a mess. In short, there has been a dramatic rise in the number of children identified with SEND. In particular, the most acute change in recent years has been the rising number of children with Education, Health and Care Plans (EHCPs). These plans are intended for those with needs that are too complex to be met by regular SEND provision. They set out the specific provision that a named child is legally entitled to receive. Historically, the share of pupils with an EHCP (or equivalent) has hovered around 3%. Since around 2018 this has sharply increased and today over 5% of pupils have an EHCP. Our forecasts suggest that over 8% of pupils could have an EHCP by 2029 if current trends continue.

A large part of this is due to rising awareness of particular needs. Specifically, a large part of the rise in EHCPs is among pupils who have autistic spectrum disorder. This mirrors trends seen across a range of countries and reflects a global increase in awareness and recognition of autism.

The financial consequences for councils

The rise in EHCPs has driven a marked increase in spending on children with high needs by councils. While schools have to fund the first £6,000 in costs of supporting each pupil with SEND, councils are expected to cover costs above this threshold. Since 2016, council spending on high needs has risen by around two-thirds, or around £5bn in real-terms. This has mainly been driven by the rising numbers of EHCPs, which create legally binding entitlements to specific support. Our forecasts suggest that spending will rise by a further £3bn over the next four years, potentially reaching around £16bn by 2029.

Funding from central government has also increased but has consistently lagged behind the amount councils have to spend. As a result, councils accumulated large amounts of debt, which is now in the billions. These overspends are currently kept off councils’ main balance sheets by an accounting fudge called the ‘statutory override.’ They will eventually have to be addressed, likely with a bail-out from central government.

The result is a vicious cycle. More children are recognised as having special educational needs, but the growing share of spending going towards pupils with EHCPs means that less is left over for core SEND support in mainstream schools. As a result, for families and schools, applying for an EHCP has become the most reliable way to secure support. Councils therefore face increasing deficits and have been seeking to ration support, with long waiting times for EHCP assessments and a lengthy tribunals process for those who are denied plans and appeal.

The result is an adversarial SEND system that fails many of those involved. Even those who secure an EHCP can face low-quality or absent provision. The pupil-led nature of high needs spending means that it is difficult for schools to take a holistic approach to improve their overall SEND provision. The extra billions spent on high needs support could have gone towards a longer-term investment in high-quality, comprehensive SEND support. Instead, despite spending billions more on high needs we have little way of knowing if this has actually helped pupils.

How might the Government reform the system?

The Government intends to lay out plans for reforms in a White Paper this autumn. The SEND system is clearly in need of change: without reform, numbers and costs are likely to continue to rise. Without funding from central government to match, this would intensify the difficulties that families, schools, and councils face. However, simply pouring additional funding into the system is unlikely to represent good value-for-money if deeper problems are not addressed. At the last autumn budget, SEND funding was increased by an extra £1bn, but most of this was expected to help plug council deficits. These deficits will have to be filled eventually but temporarily reducing them will not solve the underlying reasons behind them.

The ideal solution would be to improve the quality and availability of SEND provision, while potentially also reducing costs in the long run. There are ways this could be done. Improving the capacity of mainstream schools to provide quality support to all pupils with SEND could help to reduce reliance on EHCPs and high-cost placements in state-funded special schools or even higher-cost independent special schools. Better training of teachers and support staff to recognise and respond to different needs would likely be key to increasing mainstream capacity. Given that the number of pupils with identified special educational needs only looks set to increase, SEND provision will need to be a core part of what schools and teachers offer on a day-to-day basis.

Naturally, this requires up-front investment. However, with SEND spending already forecast to rise significantly without reforms, it is crucial to ensure that it is spent in the best possible ways. The alternative is a cycle of rising costs and stretched provision.

Discover all the latest analysis in our Autumn Budget Insights series.