Supporting children with SEND is the biggest financial challenge schools are facing, governors have warned, overtaking staff pay pressures for the first time. With chancellor John Healey set to deliver his first budget next week, the National Governance Association’s (NGA) annual survey shows just one in five boards think their school or trust will be financially sustainable over the next three to five years. The report – which polled over 3,000 governors and trustees at mainstream and special schools – also revealed leaders are falling short of government flexible working targets and that interest in joining a multi-academy trusts (MATs) has slumped to its lowest level since 2020. Here’s what you need to know… SEND challenge Supporting pupils with SEND was the most-reported financial concern this year, moving ahead of staff pay costs for the first time since data collection began in 2022. Sixty-eight per cent of governors and trustees listed supporting pupils with SEND as one of their top three budgetary challenges, compared to 65 per cent for staff costs. Last year, worries over SEND stood at 69 per cent, while staffing concerns stood at 75 per cent. The concern remained despite government announcing the £1.6 billion inclusive mainstream fund and £1.8 billion experts at hand cash, distributed over three years, earlier this year. Financial worries over supporting pupils with additional needs have soared from 47 per cent in 2022. The NGA is urging ministers to “urgently assess whether there are enough specialist places for children with the most complex SEND needs and whether those who need the most support can access it”. Falling rolls was the third-most-cited challenge (41 per cent), followed by infrastructure costs at 31 per cent. Mixed financial picture The proportion of boards that managed to balance budgets in-year rose to 57 per cent, from 54 per cent last year. NGA also registered the “first meaningful fall” since 2022 of schools and trusts drawing on the previous year’s surpluses to stay afloat. The figure fell from 30 per cent in 2025 to 25 per cent this year. Despite this, 12 per cent said they were unable to balance the books without a licensed deficit or a loan, up slightly from 11 per cent. And only 19 per cent of boards think their school or trust will be financially sustainable over the next three to five years at current funding and income levels. NGA chief executive Emma Balchin said: “Unless system capacity and investment catch up with demand, these small improvements in financial pressures will prove short-lived. “Falling pupil numbers and increasingly complex needs are squeezing budgets, while high-needs funding struggles to keep pace”. Focus on income strategies The report stated that many boards have already made “the easy savings”, even though continue to face “difficult decisions”. Reviewing contracts for goods and services (47 per cent) and staff restructure (44 per cent) are the most likely steps they would take. Income generation strategies are now a “clear focus”, NGA said, with the proportion of boards set to explore them leaping to 31 per cent from 18 per cent last year. “Governors and trustees have worked hard to keep their schools financially secure, finding efficiencies, reviewing contracts, restructuring and generating income,” Balchin continued. “But good governance alone cannot make an underfunded system deliver the inclusive education every child deserves.” Academisation ‘disappointment’ In its white paper earlier this year, the government unveiled its vision for all schools to be in a trust. No timelines or added funding were given, though. But NGA believes ministers will be “disappointed” if they hoped this would accelerate full academisation. Thirty-four per cent of those governing in council-maintained schools and standalone trusts said the white paper had triggered discussions about joining a chain. But these conversations appeared to end with boards “broadly [in] favour” of remaining as they are, with the proportion saying they had decided to join a MAT (12 per cent) at “its lowest level since 2020” . The NGA also found that many schools have fallen short of the Department for Education’s expectations for all primaries and secondaries to have a clear flexible working policy. Fifty-six per cent of boards said they had one in place, while 18 per cent reported they didn’t and 26 per cent did not know. The DfE was approached for comment.