A financial black hole at the heart of the SEND system has ballooned to £1.3 billion this year, an increase of more than £450 million in just 12 months as the places crisis bites.
The spiralling local authority deficits reveal the costly toll of a broken system.
The dual pressures of rising demand and increasing complexity of need have left councils without enough state-funded provision to cope and hugely reliant on costly independent schools.
For instance, spending on private school places by cash-strapped councils handed government bailouts to keep afloat has risen by two thirds.
The recent SEND review attempts to solve the cost problem at the start – by keeping more children in mainstream schooling to dampen rising demand.
But reforms could be years away. In the meantime, our investigation has found 21 councils already now reject one in every three requests for education health and care plan (EHCP) assessments.
More councils also plan cost-cutting measures that threaten to prevent children from receiving support, or to reduce or remove the help they now receive.
75% of councils amass deficits
Three in every four councils, who are legally obliged to organise and fund EHCP arrangements, have amassed deficits in their high-needs budgets, analysis by the Bureau of Investigative Journalism (TBIJ) reveals.
Kent, Surrey, Devon, Hampshire and Norfolk are particularly badly affected. Deficits across these five councils were together expected to grow by almost £190 million in the past 12 months.
Bournemouth, Christchurch and Poole Council’s deficit more than doubled to £18.6 million in 2021-22. Independent school placements are the most significant pressure on its budget. The council had hoped to reduce these but admitted “there is no indication yet this can be achieved”.
Hillingdon Council in west London recently required emergency government intervention to reduce its £34 million special needs debt.
A lack of capacity in-borough means there is “an expectation” that independent schools “will become the only route the council will be able to take until more provision is created locally”.
Kent’s deficit has reached £103 million – in cash terms, the largest in the country. In a candid interview, the council’s special educational needs and disabilities director, Mark Walker, said parents had lost faith in the ability of Kent’s mainstream schools to meet their children’s needs.
As a result, he explained, the council receives a higher proportion of EHCP applications from parents than schools.
What parents want, Walker said, is places at expensive independent schools and he blames the SEND Tribunal, which hears appeals against local authority decisions, for helping them to get their way.
The national independent tribunal ruled in favour of parents in 96 per cent of cases last year.
Walker gave dyslexia as an example, explaining that the council has a well-qualified speech and language service and an educational psychology department specialising in the condition.
“Why then are we losing a tribunal for parents who want to go to Frewen College, which is an independent college in East Sussex?” Frewen is one of a small number of dyslexia schools in the UK. Its fees start at £6,500 a term.
He added: “It’s a beautiful building, fantastic facilities – they’ve got a swimming pool there and everything. As a parent, if I see that, I want that sort of education for my child. I know why people go for it. But that’s different from, I think, what was expected within the [SEND] Code of Practice.”
Frewen’s principal, Nick Goodman, said these notions of luxury were misguided. “It is a not-for-profit charitable trust. It does indeed have a swimming pool – outdoor, unheated – and many of our classes are taught in temporary classrooms dating back to the 1980s.
“A look at our accounts will confirm that margins are tight. It is not the buildings or the swimming pool that make Frewen College attractive to the parents of students with specific learning difficulties. It is the provision and outcomes.”
Walker believes the answer to reducing the deficit is to increase inclusion at mainstream schools – a key promise in the government’s SEND green paper.
“We need to make sure parents in Kent don’t think they have to get an EHC plan in order to get the type of support their son or daughter needs,” he said.
The deficit, he said, would take years to reverse.
Support ‘thresholds’ considered
Councils with deficits must submit plans to the Department for Education on how they intend to balance their books.
Some include proposals to amend thresholds for which children are eligible for the education, health and care needs assessment that marks the first step towards securing an EHC plan – thresholds that have no legal standing.
Bury and Derby councils both included language about clarifying or reviewing assessments in their plans as part of their cost-cutting measures.
Bury said while it was not looking to raise thresholds “across the board”, some schools in the area had incorrectly put children forward for assessment and that for these schools, the thresholds needed to be “clarified”.
Councils lack the levers to bring this spending under control
Derby City Council said it was “working with all partners” to become a “more inclusive city, to find ways of strengthening the system and balancing the budget”.
Some councils already turn down a high proportion of assessment requests. In 2020, nine local authorities (Warwickshire, Liverpool, Medway, West Sussex, East Sussex, Southend-on-Sea, Staffordshire, Southwark and Peterborough) turned down 40 per cent or more – about twice the national average.
In 2020, Peterborough City Council turned down half of all the assessment requests it received – the highest rejection rate in the country.
Education committee chair Robert Halfon, who held one of the largest joint parliamentary inquiries into the SEND system in 2019, said the issue is not just one about funding, highlighting councils spending millions fighting parents in court over support.
“Instead, this money should be spent on the frontline, helping parents and families to access the support they need for their children.”
But a spokesperson for the Local Government Association said: “Meeting the year-on-year increase in demand for SEND support is one of the biggest challenges that councils are dealing with.
“Councils lack the levers to bring this spending under control, and this is a key issue that needs to be addressed.”
Bailed-out councils see spend soar
But the reforms are backed by just £70 million of new money – which will be used to implement the changes across three years.
Instead, the government’s new “safety valve” intervention programme awards bailouts on the strict condition that councils save money by reforming SEND support.
Deals totalling £400 million with 14 councils have been reached so far, with more in the pipeline.
Merton Council will get nearly £29 million in government bailouts over the next five years. But new figures obtained by Schools Week show that its costs for educating pupils outside of mainstream special schools have soared by 96 per cent since 2017-18.
The council spent £9.9 million five years ago on 223 places in independent or non-mainstream special schools. This year it spent £19.5 million on 398 places.
TBIJ figures show Merton had to place 40.7 per cent of its EHCP pupils in schools outside the borough last year – the second highest of any council.
Just over 1,000 of its 1,500 pupils with EHCPs were placed out of borough. But the council also had 433 pupils placed in its schools by other boroughs (taking 23 per cent of its provision).
In return for the bailout, Merton must “strengthen” SEND support in mainstream schools to “reduce escalation” of students’ needs and “manage demand” for EHCPs.
Across six “safety valve” councils that responded to our freedom of information request, spend on non-mainstream places had soared from £82 million to £131 million in five years. The number of places rose from 1,989 to 2,862.
Surrey, which will receive £100 million in bailouts, has seen these costs nearly double – from £47.6 million to £80 million.
The councils were contacted for comment.
A Schools Week investigation revealed that 51 councils spent £368 million on private SEND providers in 2019, up from £290 million three years earlier.
If extrapolated across the country, it means around £1.1 billion was spent on placing SEND pupils in private schools that year.