Nearly 20 councils have publicly disclosed that they are at risk of insolvency due to multibillion-pound debts resulting from years of overspending on special educational needs support, according to an investigation by the Guardian. Overspending on special educational needs and disability (SEND) services in England is expected to increase by nearly £2 billion over the next 12 months.
Councils anticipate their special educational needs and disabilities (SEND) deficits to rise by an average of 54%, with some expecting their accumulated debts to increase by millions of pounds each month as they struggle to meet the rising demand. These deficits, currently totaling £3.4 billion, are projected to reach £5.2 billion in the next 12 months. At least 18 councils have explicitly warned that these debts put them at risk of insolvency unless the government intervenes. The situation is dire, with council estimates suggesting that even more councils could face insolvency.
William Burns, a social care policy adviser for the Chartered Institute of Public Finance and Accountancy (CIPFA), stated that the deficits are pushing councils across England to the brink of financial collapse. The potential for mass defaults on SEND deficits could have catastrophic consequences, as councils would be forced to drastically reduce spending across all services, including local schools.
The spiraling debts have been concealed by Tory ministers using an accounting fix called a “statutory override,” which ends on 31st March 2026, when the debt will return to council balance sheets. The government will have to decide whether to clear the debt or extend the override until the deficits can be safely cleared.
The SEND deficit crisis has been exacerbated by rapid increases in the cost of meeting education and healthcare plans (EHCPs) for children with conditions such as autism and speech and language difficulties. Insufficient special needs capacity in state schools and the high costs of SEND placements in private specialist schools have contributed to overspending.
A government spokesperson acknowledged that the SEND system has been in a dire state for years and will require time and a new approach to address the issues and improve support for children and families.
Based on preliminary analysis, over two-thirds of English councils have exceeded their allocated SEND budget in the past year, with some breaching their annual allocations by more than £30 million. Nearly nine out of ten English upper-tier councils are expected to have accumulated deficits in their high needs budgets by the end of next March, with 32 predicting debts of over £50 million and 15 debts of £100 million or more.
Leeds city council, where Chancellor Rachel Reeves represents, has forecasted its accumulated SEND deficit to rise from £17.5 million to £50 million by the end of the next financial year, which poses a significant financial risk. Hampshire county council, with the largest forecast deficit of £312 million, expects its debt to increase by £111 million over the next
Source: https://www.theguardian.com/education/2025/mar/30/councils-england-insolvency-risk-send-costs
