NEWS: Government To Cover 90% Of Councils’ SEND Deficits In Rescue Plan

As reported by the BBC, councils in England will receive government grants from the autumn to cover the vast majority of their accumulated special educational needs deficits, in a move designed to avert a looming financial crisis

Under the plan, ministers will fund 90% of SEND-related deficits that local authorities have built up by the end of the current financial year. The measure addresses mounting concern over historic overspends that have been temporarily kept off council balance sheets.

At present, those deficits are shielded by a statutory accounting override, which prevents them from counting towards councils’ overall finances. That arrangement is due to end in 2028, raising fears that authorities could be forced to declare effective bankruptcy if the liabilities were reinstated.

The Office for Budget Responsibility has projected that the total value of historic SEND shortfalls could reach £14bn by that point.

The intervention follows a warning from the Local Government Association that eight in 10 councils in England risked insolvency if required to absorb their accumulated SEND debts. The LGA said the new funding commitment removes the immediate danger facing many authorities.

Ministers are expected to set out broader reforms to the SEND system in a forthcoming Schools White Paper.