Local authority deficits for special educational needs and disabilities (SEND) provision ‘could easily reach absurd levels’ without widespread reform, a think-tank has warned.
A new report by the Institute for Fiscal Studies (IFS) found funding for pupils with SEND in England had risen ‘massively’ since 2015 – a 59% rise, totalling £4bn.
But it remains insufficient, as councils overspent on high needs by between £200m and £800m a year between 2018 and 2022.
Spending on fees for independent special schools has seen a particularly stark rise – increasing by 138%, or £1bn, since 2015.
Soaring spending means councils’ deficits are estimated to reach £3.4bn this year and could exceed £8bn in 2027 – potentially resulting in ‘widespread’ council bankruptcies, according to the IFS.
The situation is likely to be exacerbated in March 2026 by the end of the statutory override in, an accountancy method that is currently keeping councils’ deficits off their balance sheets.
The think-tank said ‘urgent, radical’ change was required, including bolstering capacity in state-funded special schools and a larger core SEND offer in mainstream schools – but stressed this would be expensive in the short term and require ‘fundamental changes’ to the education system.
IFS research economist Darcey Snape said: ‘The crucial first step for the Government is to set out a clear long-term vision.
‘The transition path to a better system may run slowly, but it is necessary to take it given the present path of financial unsustainability.’
