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The system to help children with special needs is broken and will drive one in four councils into bankruptcy by 2026, a damning new report commissioned by the Local Government Association has found.
It comes a day after the National Audit Office revealed that, despite the last Government spending £9.2 billion a year on disadvantaged children in mainstream schools, educational standards in Maths and English had fallen since 2011.
The new report by the Isos Partnership, a public sector research organisation, reveals that despite the tripling of expenditure on children with special educational needs and disabilities (SEND), standards in reading, writing, and mathematics have either stagnated or fallen during the past decade.
The report states that councils are struggling to cope with the huge rise of children on Education, Health and Care Plans (EHCPs), which has more than doubled from 240,183 in 2015; to 575,973 in 2023/24 – an increase of 140% over 10 years.
A further 1.2 million children in schools are identified as requiring support below the level of a statutory EHCP, up from 990,000 in 2015.
Since 2014/15, there has been an increase of 60% in the numbers of children and young people in state-funded special schools, and a rise of 132% in the number placed in independent and non-maintained special schools.
Some 185,000 pupils with an ECHP were in special schools this year, up from 109,000 in 2015.
For local authorities, the costs to the high-needs block of a maintained specialist school placement are £25,000 a year, with an independent placement costing £58,500. Placing a child with an EHCP in a mainstream school costs £8,200.
The financial impact on local authorities has been colossal, with the annual cost expected to reach £12 billion a year in 2026. Council deficits on the scheme are expected to rise from £3.2 billion to £5 billion by 2026.
This money is currently kept off councils’ financial books. But, from 2026, it is due to be included in annual accounts – which would force a quarter of councils to go technically bankrupt that year, and half of councils within a further three years.
This comes at a time when a number of councils are already technically bankrupt including Birmingham, Nottingham, Woking, and Thurrock.
The situation is aggravated by parents of children with special needs at mainstream schools losing confidence in the system and applying for a statutory ECHPs, placing greater burdens on councils. It also means that the system is weighted down by legal disputes through tribunals.
The report states that the solution is a radical review of the present system with more professional support for children with special needs in mainstream schools.
Tim Oliver, county council network chairman, said the SEND system “is broken” and wide-ranging reform in 2014 – while well-intentioned, a decade on – “has created a system that does not work for councils, schools and parents alike”.
“Parents often feel they struggle to access schools’ services, lack the capacity to support pupils, and councils have seen a doubling in needs over the last 10 years, and have amassed deficits that threaten their financial solvency,” he said. “Most importantly, education outcomes and employment opportunities have not improved for children with SEND.”
He is calling for the new Government to tackle the problem in the next 12 months.
The National Audit Office has announced that it is also investigating the provision for children with special needs and how the Department for Education is managing and supporting the programme. Its report will be published this autumn.