T

he alarming details of the special educational needs financial crisis in English local authorities are buried deep in internal council papers but the reality of the situation is crystal-clear to those close to it. “It’s a ticking timebomb,” one town hall boss told the Guardian. “It’s what keeps me awake at night.”

Budget reports, schools forum minutes and financial planning documents help tell a story of a system woefully unprepared for the explosion in numbers of children with special educational needs and disabilities (Send) in recent years, chronically underfunded to meet the growing demand, and now struggling to keep afloat.

Between 60 and 70 councils are at risk of becoming in effect bankrupt next March as a result of the Send crisis, a catastrophe for town halls but also a powerful signifier of a deeper problem: a neglected and dysfunctional special educational needs system that is ruinously expensive, poorly managed and too often failing children and parents.

Labour now faces a huge and complex social policy challenge: reforming the Send system is not only urgent and politically fraught but likely to cost several billions at a time when budgets are tight and ministers face competing demands to fix the NHS and social care.

Guardian analysis of documents published by 108 councils has revealed a rapidly growing financial crisis driven by acute shortages of mainstream Send provision and repeated underestimates of demand from families and schools, notably in the form of education, health and care plans (EHCPs), documents that give children a legal right to Send provision.

Council’s Send deficits in  are likely to hit £5bn next year. The size of individual deficits and the velocity at which they have risen – a decade ago councils were in surplus – is startling. West Sussex county council papers, for example, reveal its cumulative Send deficit is about £131m. By March 2026, it is forecast to rise to £225m and on current trends could reach £459m three years later.

Mass insolvency has been averted so far by keeping town hall Send deficits off balance sheets. This accounting fix, which is called an “override” and is in place for three years, ends in March 2026. At this point the deficits go back on the books, and many councils are clear that insolvency beckons: they do not have the means to meet their debts.

Bournemouth, Christchurch and Poole council recently discussed options to clear its forecast £165m Send deficit such as suspending new EHCP assessments and withholding business rates from the Treasury. Both options, the council admitted, would be “unpalatable” and unlawful, but highlighted the need to fix a “broken and unsustainable” system.

One of the biggest Send budget pressures is private specialist school fees, which are typically two to three times the cost of a state school place and have led to calls for measures to curtail profiteering. The private sector has grown rapidly in recent years to meet the “overflow” from a depleted state Send sector that is full to capacity.

Warwickshire county council budgeted last March to place 470 children in independent special schools at an average cost of £55,000 a year for each place. A few months later it revised the forecast: it was now expecting to place 556 children at an average cost of £66,000. Its estimated annual overspend on private Send provision this year is £11m.

Common problems for councils include construction delays on new specialist schools; rising costs of home-to-school Send transport (in Hampshire this has risen from £40m to £105m in two years); rows with headteachers over emergency transfers of school funds to high-needs budgets; and struggles to clear EHCP application backlogs. Local Send “cost containment” initiatives have largely failed to meet targets.

[](https://www.theguardian.com/profile/patrickbutler)

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[](https://www.theguardian.com/education/2025/mar/03/ministers-plan-major-changes-to-send-education-in-england)

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[](https://www.theguardian.com/society/2025/feb/28/almost-half-of-englands-councils-could-face-bankruptcy-over-deficit)

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[](https://www.theguardian.com/education/2025/jan/31/school-exclusions-research-ethnicity-poverty-special-educational-needs)

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[](https://www.theguardian.com/news/audio/2025/jan/21/special-educational-needs-send-families-funding-podcast)

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[](https://www.theguardian.com/education/2025/jan/15/send-crisis-in-england-risks-creating-lost-generation-of-children)

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