Resolving these deficits could cut the cost of financing existing deficits by an estimated £300 million by 2027/28, the Government said
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The Government has announced it will write off 90 per cent of the special educational needs and disabilities (SEND) deficits accrued by councils up to this year, as part of its final Local Government Finance Settlement.
The Government will resolve 90 per cent of the high-needs deficits accumulated by councils on their dedicated schools grants to the end of 2025/26.
Resolving these deficits could cut the cost of financing existing deficits by an estimated £300 million by 2027/28, the Government said.
Last week, councils warned the majority of them would face insolvency when a statutory override keeping Send deficits off their books expired in 2028.
The County Councils Network (CCN) welcomed the announcement and said it “will be a significant relief to our member councils with the deficit set to reach £6.6 billion nationally by the end of next month”.
All councils with a SEND deficit will be able to receive grant funding for the past deficits if they submit a local Send reform plan to the Department for Education (DfE) which receives approval.
Councils told the Local Government Association last week that even if deficits are removed, without reform they would continue to have to overspend and could see deficits quickly return.
The Government is expected to lay out its plans to reform the SEND system in the coming weeks in its delayed Schools White Paper.
Bill Revans, Send spokesperson for CCN, added: “Looking ahead, it is vital that the Schools White Paper sets out comprehensive reform to the SEND system.
“Councils will do all they can to improve local services and control future expenditure through local Send reform plans, but previous initiatives such as Delivering Better Value have shown in the absence of comprehensive changes to the system at a national level, councils will be doing so with one arm tied behind their backs.”
Delivering Better Value is a programme aimed at reforming SEND provision in local areas to make it more effective and sustainable.
The Government had previously announced in the autumn budget that from 2028 it would manage future SEND costs in the overall Government budget from 2028.
In a report last month that said the Government had reached “crunch time” on SEND reform, the Institute for Fiscal Studies said Office for Budget Responsibility (OBR) forecasts imply a £6 billion gap between expected funding and costs of SEND in 2028/29
Cllr Louise Gittins, chair of the LGA, said: “This is recognition that these costs are not of councils’ making and have accrued due to a broken system that is urgently in need of reform. However, fully writing off historic and future high needs deficits remains critical.”
She added: “Overall budget-setting will be another hugely challenging task for many councils this year and beyond. It is crucial that Government works with councils on reform of key services, including Send and adult social care.”
