Council deficits in England could spiral to “absurd” levels in excess of £8bn in less than three years without radical reform of special educational needs funding, a leading economics thinktank has said.
Spending on pupils with SEN has gone up nearly 60% over the past decade, with the government announcing a further £1bn in the October budget, but increased investment has failed to meet rising need, the Institute for Fiscal Studies (IFS) said.
The pressure on the system, according to the IFS, is due to the “rocketing” number of children and young people with education, health and care plans (EHCPs). These pupils have the highest needs and councils are legally required to provide and pay for the additional support outlined in the EHCP.
As a result local authorities have built up deficits likely to total £3.3bn this year, with the government forecasting a further £2bn–£3bn increase in annual spending by 2027 in line with rising needs.
“Without reform, local authority deficits could easily reach absurd levels of over £8bn in 2027,” the IFS said.
In its new report, “Spending on special educational needs in England: something has to change”, the IFS says the SEN funding system is broken, and calls on the government to set a “clear, long-term vision” for “urgent, radical change”. Among the possible solutions, it suggests “maybe reducing the statutory obligations currently attached to EHCPs”.
The report, published on Tuesday, follows the recent publication of a National Audit Office report that found that despite record levels of spending there had been no signs of improvement in the lives of children with SEN.
Darcey Snape, IFS research economist and one of the authors of the report, said: “The special educational needs system in England clearly requires urgent, radical change. Without reform, rises in need will push up annual spending up by at least £2bn-£3bn in the next three years.”
The government has said it wants to expand core provision for SEN in mainstream schools. Snape said: “This would represent a massive change to the school system, necessitating major reform of the funding system, increased staffing and training, and much else.
“Any transition could also entail significant costs in the short run and the public finances are very tight. The crucial first step for the government is to set out a clear long-term vision. The transition path to a better system may run slowly, but it is necessary to take it given the present path of financial unsustainability.”
Julia Harnden, funding specialist at the Association of School and College Leaders, said the system was on the brink of collapse.
“There are long delays in securing EHCPs for children with the most complex needs, parents are being let down and teachers are being left in an impossible situation. There is no avoiding the scale and urgency of the challenge,” she said.
Paul Whiteman, general secretary of the NAHT school leaders’ union, said: “Current underfunding of the system has left both schools and councils struggling with severe deficits. In the short-term we need to address those deficits, and then find a more sustainable approach to SEND funding.”
A Department for Education spokesperson said: “This is the latest addition to the mountain of evidence on the failings of the SEND system which we inherited.
“Work has already begun to rebuild families’ confidence. The budget invested £1bn in day-to-day services and last week £740m was directed to support local authorities create more specialist places in mainstream schools.
“Every child should have the best start in life and through our plan for change we will deliver this priority for the British people.”
