Inadequate government funding to help schools support children with special educational needs and disabilities (SEND) is leading to severe budget deficits, leaving half of the capital’s local authorities at risk of bankruptcy, according to London Councils.
The cross-party organisation, which represents all 32 boroughs and the City of London Corporation, says deficits for SEND provision are on course to reach £500 million by the end of the financial year 2026-27 as the element of the Dedicated Schools Grant from national government provided to ensure legal obligations to SEND children are met fails to keep pace with need.
London Councils estimates that “up to 16” boroughs would already be “unable to meet their projected deficit” were a government “statutory override” provision allowing them to run them for longer not already extended until next March.
Ian Edwards, the group’s executive member for children and young people, said “the sums don’t add up” and that “government funding has failed to keep pace with rising levels of SEND support need, leading to major deficits”. He called on the government’s spending review, due next week, to “recognise these pressures and help us restore stability to the system”.
The number of London schoolchildren found to fall into one or more of the four different categories of SEND has risen by nine per cent, from 85,601 in 2023 to 93,487 in 2024, according to government figures. An education, health and care plan must be put in place for these children, requiring additional resources. Shortfalls have led to local authorities having to take money from other areas to cover these costs, London Councils says.
An increase in SEND support demand in recent years has been largely attributed to better diagnosis and understanding of the help children need, especially the youngest.
Other financial pressures, notably caused by rising costs of social care and housing homeless households temporarily, have already led to seven boroughs having to rely on “exceptional financial support” from the government to make ends meet.
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