The government is to write off £5 billion of councils’ debts which have been accrued supporting children with SEND, it has been announced.
The figure equates to around 90% of the deficits that local authorities have built up in recent years.
The promise comes just days after the Local Government Association (LGA) warned that eight out of ten councis faced bankruptcy because of spiralling SEND costs.
The organisation welcomed the announcement from the Ministry of Housing, Communities and Local Government, which was part of a larger commitment to fairer funding for town halls.
The MHCLG said it expected SEND reforms, to be set out in the Schools White Paper due to be published shortly, will take time to “fully embed” and that councils would need further support.
It said: “For deficits that arise in 2026–27 and 2027–28, local authorities can expect that we will continue to take an appropriate and proportionate approach, though it will not be unlimited.
“Whilst recognising the challenges of the current system, it remains vital that every
authority provides appropriate high-quality support for children and young people’s education whilst ensuring robust controls as we work together to reform the SEND system.
“We will support local authorities and their partners to do this through their local SEND reform plans.”
Fully writing off historic and future high needs deficits remains critical
The LGA said the pledge from the MHCLG removed the “immediate threat of insolvency for many councils”.
From this autumn, councils in England will receive a grant that will pay off 90% of any deficits that they had built up to the end of the current financial year.
Councillor Louise Gittins, chair of the LGA, said the funding announcement was “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.
“Councils continue to work hard to use their finite resources in the best way possible to ensure the best outcomes for children and to meet their legal duties to support children and young people with SEND.”
She added that the Schools White Paper must now “deliver the much-needed reform of the SEND system, leading to better outcomes for children and families, both now and in the future, and that is financially sustainable for councils”.
The Department for Education said: “Our Schools White Paper will set out our full plans to bring forward an inclusive education system that enables all children to achieve and thrive, while ensuring financial sustainability for councils.”
