Councils are warning of potentially “catastrophic” debts, which are forecast to reach a record £10bn over the next 18 months, as a result of rapid growth in demand for special educational needs and disability (Send) support in English schools.
Although the government recently cleared more than £5bn in historic council Send debts, a surge in requests has led to authorities predicting they will have re-accrued that debt figure by April, and doubled it by 2028.
The recent acceleration in applications for education, health and care plans (EHCPs), which mandate support for conditions such as speech and learning difficulties, autism or ADHD, is thought to partly reflect a rush by parents and schools to secure support before the government’s changes to Send provision take effect.
The prospect of council finances being overwhelmed by schools’ Send spending reflects similar concerns in the NHS and the benefit system over the strain the rising prevalence of mental health and neurodevelopmental conditions has put on public services.
The government-commissioned Fonagy report, published last week, found the increase in these conditions was real and a cause of distress to many who have them, but the resulting demand for support would be unsustainable without introducing new ways to manage the pressure on public services.
The County Councils Network (CCN), which published the forecasts on Tuesday, said the overspending was not the fault of councils and called on ministers to guarantee future Send debts run up by local authorities, some of whom would be otherwise left effectively bankrupt as a result of meeting their legal duties.
Linden Kemkaran, the CCN’s Send spokesperson, said: “These deficits have not accumulated because councils have chosen to spend recklessly: they are the result of having to meet rapidly growing statutory demand, which has only intensified this year, without funding keeping pace.
“If councils are left carrying billions of pounds of Send debt, it will not just be a problem for local authorities. Taxpayers and local communities will ultimately bear the consequences as councils face impossible choices about how to protect frontline services while managing debts that have accrued through no fault of their own.
She added: “As well as councils absorbing skyrocketing costs, children and young people will face increasingly long waits for support and educational outcomes will continue to flatline. New ministers now need to provide certainty that they will deliver the full package of reforms needed to ensure the system works much better for young people, schools and councils.”
The government’s reforms aim to gradually replace the current system in England with a more inclusive approach of Send support in mainstream schools that in principle obviates the need for an EHCP. However, parents appear to be rushing to secure formal support now to avoid any future uncertainty.
Without a ministerial guarantee to wipe future overspending, councils say they are at risk of bankruptcy when those accumulated debts – currently kept off town hall balance sheets under a special “override” arrangement with the Treasury – go back on to the books in April 2028 when the override is due to expire.
Ministers have agreed to pay 90% of English top tier councils’ Send debts accumulated to March 2026, but it is unclear how far future Send debts will be covered. Ministers have previously said future debt support would be “appropriate and proportionate” but that it would “not be unlimited”.
The CCN said anything less than a ministerial commitment to pay down 90% of future Send debt would be a “financial catastrophe” for councils – and some authorities would struggle with solvency even if they retained just 10% of their Send debts.
Publicly available internal reports by local authorities show a number are predicting overspends of more than £100m in 2026-27 alone. Hampshire county council is forecasting a £200m deficit for this year. Others include Surrey, East Sussex, Kent, Worcestershire and Norfolk county councils.
The EHCPs are legal documents agreed between local authorities and families in England detailing the support required for children and young people up to the age of 25, allowing access to extra funding or places in special schools.
In January, the number of young people with EHCPs reached 718,000, after a 12.5% increase over the past 12 months. This was the largest year on year increase since the plans were introduced in 2014. An additional 1.3 million young people have identified special needs, according to official data.
Many councils are anticipating annual double digit increases over the next three years, with several now projecting that at the current rates of increase, nearly one in 10 pupils will have an EHCP by 2029.
The Fonagy report said the growth in EHCPs had “substantially outpaced the capacity” of the education system to respond. Of the 105,300 statutory assessments carried out in 2024, 94% resulted in the award of an EHCP.
Owen Mapley, the chief executive of the Chartered Institute of Public Finance and Accountancy, said: “The continued escalation of Send deficits exposes a serious failure to align statutory responsibilities with funding levels. Local government chief financial officers have been calling attention to this disconnect for years as it undermines proper financial management practice.”
A government spokesperson said: “We inherited a Send system under immense strain, and have always recognised that both deficits and EHCP applications will continue to rise before our reforms are fully rolled out.
“On top of grants to pay off 90% of council deficits, we’re investing billions to make sure every community has easy, early access to specialists like speech and language therapists, and so councils can deliver their tailored local reform plans.
“Fixing the Send system will take time and councils will need further support with deficits, so we will set out the details before March 2028.”
