The SEND system is now “very likely” to become financially unsustainable, while the risk that council finances will impede “essential” support services is “critical”, the Department for Education has warned.
The DfE has upgraded its risk register on the two issues, showing the scale of the challenge ahead for the new government with systems on the verge of collapse.
Here’s what we learned from the department’s annual report and accounts.
1. ‘Very likely’ SEND system will be unsustainable
Schools Week revealed earlier this year how more than a third of councils with “safety-valve” deals to plug high-needs deficits face bankruptcy, despite being set to receive more than £1 billion in government bailouts before the end of the decade.
The DfE said the risk that “high needs pressures continue to outstrip available funding significantly, making the SEND and AP system financially unsustainable” has been upgraded to “critical-very likely”.
Despite “substantial cash increases in high needs funding, in the medium term (1-4 years) high needs costs continue to rise significantly”.
This would “threaten the overall financial stability of local authorities” once an over-ride allowing councils to keep SEND deficits off their main books expires in 2026.
This would undermine “efforts to improve educational outcomes for pupils with SEND and improve parental confidence in the SEND and AP system”.
A DfE spokesperson said the report “lays bare the enormous challenges” government faces across education but is “determined to deliver better life chances for all young people”.
2. Risk to council support services ‘critical’
The DfE has upgraded its risk register to state that it is now “critical” and “likely” that councils’ financial challenges will “impede delivery of essential support services and reform activity”.
This could happen “across childcare, special educational needs and disability and alternative provision and children’s social care (CSC) worsening outcomes for the most vulnerable and exacerbating cost pressures”.
This risk was “escalated to top-tier in the year”.
The DfE warned that in children’s social care, “predominantly driven by SEND and AP”, rising numbers of looked after children, placement sufficiency, placement costs, market charging and workforce are “contributing to the overall risk of financial instability”.
3. £67m spent on RAAC
According to the accounts, in the last financial year, the DfE spent £67 million in response to RAAC, with the collapse of school buildings still rated “critical – very likely”
Most of this was on mitigation works (£53.8 million), but the DfE also spent £8.6 million on identification surveys and a further £3.8 million on revenue support for schools and councils.
4. DfE may have outed a whistleblower
The DfE said it had eight personal data breaches last year that it deemed reportable to the Information Commissioner’s Office, up from two in 2022-23 and seven the year before.
In one instance, “information was shared with an organisation that may have allowed the identification of an individual making a whistleblowing allegation”. However, no action was taken by the ICO.
Cases also involved information on “alleged misconduct” being “sent to a generic inbox instead of an individual”. Documents relating to misconduct “were posted to the wrong individual”.
5. £8k severance packages for Gibb and Halfon
Departing ministers Nick Gibb and Robert Halfon each received a £7,920 severance payment.
Gibb stepped down as schools minister last November, announcing he was seeking diplomatic post and would stand down as an MP.
Halfon announced his retirement from the House of Commons in March and quit as skills minister the same day.
6. Staff turnover at record high
The rate at which staff left the DfE was higher last year (13 per cent) than at any point since 2019-20 (9 per cent).
“Most employees leave to transfer to another government department”, but turnover in the wider civil service has also increased.
The department also ran a voluntary exit scheme, which contributed to an increase in the overall volume of leavers.
Two payouts to departing members of staff across DfE each cost the government between £100k and £150k.
In total, 30 exit packages were agreed across the group, costing £1.265 million. In the previous year, there were 384 exits, costing the group more than £20 million.
7. £10m on consultants
Spending on consultancy across the DfE and its agencies stood at £10.1 million in 2023-24, its highest level since 2019-20 (£12.7 million) and up more than 50 per cent on the previous year (£6.6 million).
The DfE said that “when used appropriately, consultancy can be a cost effective and efficient way of getting the temporary and skilled external input that the group needs”.
This week, chancellor Rachel Reeves vowed to cut departmental spending on consultants.
8. DfE lost £1.2m over Michaela Stevenage plan
Accounts detail a £1.187 million loss relating to “historic costs associated with the withdrawn Michaela Community School Stevenage project”.
Plans for a new off-shoot of Britain’s “strictest school” were scrapped in 2022 as there was no longer the “basic need” for extra school places.
The department “considers a project withdrawal or cancellation as better value for money in progressing with a free school project that will not be viable in the future”.
The DfE also wrote off debts owed by Queen Elizabeth Grammar School Penrith (£502k) and Sandbach School (£438k) to “aid re-brokerage”.
These are on top of debts written off by the ESFA.
Your thoughts