SEND crisis: Eight in ten UK councils warn of insolvency without urgent reform

The SEND crisis is pushing the majority of UK councils to the brink of insolvency, according to a recent survey by the Local Government Association (LGA). Rising costs to support children and young people with special educational needs and disabilities (SEND) have left councils struggling to balance their budgets, prompting urgent calls for government intervention and systemic reform.

As of January 2025, there were around 640,000 Education, Health and Care Plans in place—an increase every year since their introduction in 2014. This persistent growth in demand, along with sharply rising costs, has led most councils to warn that they face insolvency.

According to the LGA, local councils are committed to upholding the education entitlements of all children and young people with SEND; however, the system needs urgent reform.

Currently, councils can keep high needs deficits, an overspend where SEND costs exceed the budget available, off their main balance sheets by using the “statutory override”. The survey found that 95% of councils had high-needs dedicated schools grant (DSG) deficits.  But this ‘override’ option is due to end in March 2028, when the deficits move to councils’ books. 79% of councils responding to the survey said they will not be able to set a balanced general fund budget in 2028/29.

Without action, the LGA said this risks undermining their ability to plan sustainable services and improve outcomes for children and families. Despite increased investment, awareness, and assessment, there is no clear evidence that outcomes for children with SEND have improved.

The UK Government is set to outline its plans to reform the SEND system in the upcoming Schools White Paper. The reform is necessary, as councils have said that if the deficits were removed in 2028 but the system was not reformed, almost all who responded said they would have to continue overspending, meaning the deficits would quickly return.

The Office for Budget Responsibility has forecast that by the end of 2027/28, local councils will have collectively amassed £14 billion in cumulative high-needs SEND deficits.

Cllr Amanda Hopgood, Chair of the Local Government Association’s Children, Young People and Families Committee, said: “There is a widely held consensus that the SEND system is broken and not working for children, their families and councils.

“Councils are committed to supporting every child and young person to achieve their potential and clearly what is important is that children and young people get the support they need. But under the current system, the rise in support need has left many councils buckling under the strain.

“The huge costs in providing support are threatening most councils with insolvency.

“This is why we are urging government to write off councils’ high needs deficits in the final Local Government Finance Settlement.

“However, it is important to note that the challenges within the SEND system are not just financial. The Schools White Paper must deliver brave and bold reform where more children are able to get the support they need in a mainstream school, without having to go down the route of needing a statutory plan.”