At least six councils with combined SEND deficits of about £195 million have been told to revise their reform plans in exchange for a government bailout. The Department for Education this week said it had approved the reform plans of more than nine in 10 local SEND partnerships – which include councils and health bodies. They are now eligible for a 90 per cent bailout of their dedicated schools grant deficits up to March this year. A Schools Week investigation and transparency project last month showed how most of councils with public plans feared a shortage of specialist staff threatened to undermine proposals. This all comes ahead of ministers revealing what changes they have made to the SEND reforms, after a consultation closed in May. The DfE is yet to reveal which councils were successful, but Schools Week has established at least eight partnerships that had their plans “deferred” and told to resubmit. Six of the councils had a combined cumulative deficit at the end of last financial year of about £195 million. Two others are in surplus. Cambridgeshire, which posted a £96.2 million black hole, plans to open 1,507 inclusion bases – a key part of the government’s reforms – by 2029. It was also part of the controversial “safety valve” scheme, in which the DfE provided extra cash in exchange for sweeping reforms. More information A spokesperson said the DfE had “requested further information in a number of areas in the plan”, and that the council would resubmit by 30 November. “The council is working closely with officers and advisers from the DfE to ensure that the updated information meets the requirement fully in order for our plan to progress successfully.” The DfE has committed to delivering the payment to councils with approved plans before the end of this financial year, Cambridgeshire said. Cumberland said its feedback recognised “the clear strength” of its approach, highlighting it was “ambitious, comprehensive and credible”. It had a £24.9 million deficit in March. “We are working closely with them and our partners to make a small refinement to one area of the plan and we are confident we will secure approval at the earliest opportunity.” Revealed: What SEND reforms are proposed for your area? Slough, which posted a £17 million deficit, said the DfE positively assessed eight of nine areas. Capital and expansion planning was assessed as “working towards” the required standard. Debbie Jones, interim children’s services director, said it “gives us confidence that the foundations are in place and that the remaining work is achievable”. Liverpool said its plan had been recognised as a “strong and substantial reform package”, but DfE officials believed some areas needed amending. West Berkshire said it was “naturally disappointed” the decision had been deferred and would provide further information to officials. Lewisham is also revising its plan. A county council’s network spokesperson said councils with deferred plans “will be extremely disappointed, having worked hard to in tight timeframes”. “We recognise the importance of these plans, but it is imperative there is now a swift resolution to this issue.“ Large surplus However, two of the rejected councils – Milton Keynes and Bradford – are in surplus. Bradford, which is taking £16 million in reserves into the next financial year, has the second largest surplus in the country, behind Birmingham’s £57.8million. The council said it would provide additional details, including “enhanced measures of success and governance”. “Council officers will continue to work closely with the DfE to ensure the resubmitted plan includes the level of detail requested and meets the needs of local children and families, education settings and partners,” said Sally Birch, Bradford’s children and families lead. Its most recent SEND area inspection in 2022 said parents had “lost faith in the SEND system in Bradford”, and that the council had not developed robust systems to complete and review education, health and care plans. A 2024 Ofsted inspection said SEND services in Milton Keynes needed “improving” and that families had “inconsistent experiences and outcomes”. Another four councils also had their plans rejected, it is understood, but their names are not yet public. Each area received a letter from the DfE, as well as a mark scheme on how they fared on each section. The letters make clear approval does not mean that DfE scrutiny has ended. Officials told Surrey that while the partnership had shown “a positive trajectory, the government’s wider assessment is that your partnership remains at an early stage of development and has not yet demonstrated the maturity, grip or assurance that will needed to deliver reform successfully at pace”. A government spokesperson said: “With over 90 per cent of plans approved, almost every part of the country has now set out how it will improve SEND support.” ‘Services as normal’ The DfE said town halls with deferred plans should continue to “deliver services as normal”. “Councils and integrated care boards are accountable for the local partnerships delivering reform plans and we will work closely with the small number that have been deferred, before they re-submit them.” In February, the government said bailouts were “projected to be worth over £5 billion”. In March, the Office for Budget Responsibility gave more detail, projecting the transfer to be between £5.6 and £6 billion. This is above an initial total deficit projection in 2024 from the DfE to the National Audit Office of £4.6 billion. The SEND deficit has spiralled from £1 billion in 2020-21 to an estimated £6.57 billion this year, Schools Week analysis has found. This is subject to adjustments by the DfE – however, recent years suggest the final figure will be within 1.5 per cent of estimates. This leaves a potential bill of £5.91 billion for government officials to wipe, also subject to adjustment. Collective deficit If all plans are approved, councils will be left with a collective deficit of around £657 million. Eighteen will still be left with deficits worth more than £10 million, while 13 will remain in surplus. The Office for Budget Responsibility has forecast that deficits over the next two years will total more than £9 billion because of continued SEND spending pressures. Darcy Snape, research economist at the Institute for Fiscal Research, said there were “big questions around what will happen to the dedicated schools grant deficits that are built up over the next two years”. “While some financial support from central government will almost certainly be needed to keep councils solvent, the government might worry that a very generous arrangement would weaken incentives for councils to control SEND spending.” The government is yet to reveal what support it will offer other than a “appropriate and proportionate approach, though it will not be unlimited”. It will also look at how well councils are deriving their approved plans. ‘Dire decisions for decades’ Matt Keer, contributor to Special Needs Jungle, said councils “can’t meaningfully prepare for the future if they’re facing mortal financial peril each year for the next two years”. “The deficit took ten years to get this big, but by this time next year, it’ll have grown back to its current size again. “Whitehall still won’t confirm what it plans to do about that. No one makes good decisions under circumstances like these – and SEND policy has been plagued with truly dire decisions for decades.” Fewer than one in ten councils does not have any debts to wipe. But of the 13 that remain in surplus, eight are taking less than £10 million in reserves into the next financial year. Westminster is close to being in deficit, with a surplus of £1.26 million, closely followed by Southend-on-Sea, which has a surplus of £1.83 million. Barnet, which is taking forward a £4.3 million surplus, has called on the DfE to “extend the 90 per cent write-off of the dedicated schools grant deficits for those not currently eligible”. With an in-year overspend of £4.6 million in 2025-26, Barnet is forecasted to go into deficit next year. Lambeth, which has just £2.2 million left over, wrote to ministers in June over concerns it would lose out on the bailout.