Ministers insist plans to absorb council Send debts won't hit school budgets

"The Department for Education (DfE) said projections from the Office for Budget Responsibility (OBR) were "incorrect" and did not take into account the reforms it will set out in the new year. The government said it would take all Send spending away from local authorities by 2028 - a forecasted 6bn of extra costs. Councils welcomed the change, saying rising costs had made Send spending "unsustainable", but teaching unions echoed the OBR's warning of an impact on school spending."

"Local authorities currently receive a ring-fenced grant from the DfE to pay for special needs support, known as the dedicated schools grant. But rising demand has led to local councils spending billions more overall on Send than they get from central government. The number of young people with council-funded education, health and care plans (EHCPs), which set out the support they are entitled to, has doubled across England since 2016."

"Since 2020, those Send debts have been kept off local authority books by a "statutory override" which had been extended to 2027-28. Without it, many councils have warned they face rising costs and even bankruptcy. The OBR has forecast that councils will have cumulative deficits of 14bn by the end of 2027-28, when the statutory override expires. It is not clear how much responsibility for paying this back will stay with councils."

The Department for Education disputes Office for Budget Responsibility projections and plans to centralize SEND costs, moving full responsibility away from local authorities by 2028. Councils welcomed the change amid rising SEND costs that outstrip the dedicated schools grant, while teaching unions warned of potential impacts on school budgets. The number of council-funded EHCPs has doubled since 2016, driving higher spending. SEND debts have been kept off local authority balance sheets via a statutory override extended to 2027-28. The OBR forecasts cumulative council deficits of £14bn by 2027-28 and notes no identified savings to offset the estimated £6bn.

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