Surging costs for upper tier authorities mean that if they were forced to include special educational needs on their revenue budget there would be a wave of council bankruptcies.
A statutory override means councils can keep Send deficits off their balance sheets, but this runs out in March 2026 and the Society of County Treasurers and Association of Local Authority Treasurers have today projected the deficits amount to £4bn this year.
The County Councils Network (CCN) warns that if no action is taken 26 out of 38 county and rural unitary authorities would be at risk of issuing a section 114 notice before 2027 due to “unmanageable” deficits.
A survey of CCN members found 18 councils would be bankrupt overnight in March 2026 if the override expires. Only four said they would not need to issue a section 114 before the end of the current parliament.
CCN is calling for reform to the Send system include making mainstream schools more inclusive.
Kate Foale, special educational needs and disabilities spokesperson for CCN (Lab), said there would be “an immediate financial emergency” for the sector if there is no action.
Cllr Foale added: “With the clock ticking to March 2026 when these deficits are placed back onto councils’ budget books, the government must provide immediate clarity on a national solution to eliminating or managing councils’ deficits.
“But this is only one part of the solution. We also need root and branch reform of the Send system to address the key issues driving demand and cost, including flipping the system to make mainstream schools more inclusive for Send pupils.”
