English county councils warn of £1.3bn special educational needs deficit

County councils in England are warning of a £1.3bn special educational needs deficit which threatens to derail their finances and undermine capacity to support recovery efforts after the pandemic.

They say the total deficit is set to increase eightfold in just five years as a result of “an explosion” in the number of children requiring additional support and they warn they are facing “a financial cliff edge”

A survey by the County Councils Network (CCN) and the Society of County Treasurers shows the combined deficit for 40 authorities has gone up from £134m in 2018-19 to a projected £1.3bn in 2022-23.

The CCN is calling for an injection of additional funding in the forthcoming spending review to help bring deficits down to a manageable level. It is also urging the government to complete and publish its much anticipated review into provision for children with special educational needs and disabilities (Send), set up in 2019 to address problems with capacity, funding and support for children.

Local authorities have seen spending on children with Send increase sharply in recent years as a result of legislative changes in 2014 which extended their responsibilities for young people up to the age of 25.

There has also been an increase in the number of young people with education, health and care plans (EHCPs) from 354,000 in 2019 to more than 430,000 in 2021. These legally binding documents guarantee support services for children with the greatest needs.

In view of the pressure on budgets, the government has allowed councils to carry over deficits until 2023, which has provided a breathing space but is “little more than a sticking plaster,” according to the CCN.

Keith Glazier, the CCN’s children and young people spokesperson, said: “We have a statutory and moral obligation to support these young people, but local authorities are building up significant deficits.

“With limited options and a lack of funding available, we are being backed into a corner and face a financial cliff edge in two years’ time when these deficits will be on our budget books and will need to be addressed. This could mean we take funds from other services or money from our pandemic recovery efforts.”

Tim Oliver, leader of Surrey county council, said his authority had seen a “massive” increase in the number of EHCPs with 10,000 children now fully funded. “As we speak today we have an accumulated deficit in excess of £85m.

“We have some children who cost hundreds of thousands of pounds a year to support. We have a statutory obligation to do that, but I’m afraid it’s just not financially sustainable.”

A Department for Education spokesperson said: “We have announced the biggest increase in school funding in a decade and increased high needs funding for councils to provide services for families and children with special educational needs and disabilities to more than £8bn this year – an increase of nearly a quarter over two years.”