Despite signals of future reform from the Schools White Paper in February and the Education for All Bill in May, financial pressure on councils funding current Special Educational Needs and Disability (SEND) arrangements remains acute.
Rising demand for SEND services continues to strain local government finances, creating urgent challenges that need to be addressed now, before national reforms take effect.
The financial challenge
Sustained growth in demand for SEND services has left many councils with high value Dedicated Schools Grant (DSG) deficits which in some cases are approaching or even exceeding usable reserves. The government has committed to High Needs Stability grants covering up to 90% of DSG deficits for councils that agree SEND reform plans with the Department for Education. However, many of those councils are still going to be left with residual deficits valued in millions of pounds when statutory override comes to an end in 2028. This will threaten their financial sustainability.
Key insights from our 2024/25 reports
Effective planning is critical. Grant Thornton’s Auditors’ Annual Reports for 2024/25 identified three key areas where councils can improve their approach to managing DSG deficits and SEND provision.
1. Strengthening financial and strategic planning
Management planning has sometimes been weak, with unrealistic targets, poor oversight, and limited integration with wider financial strategies. This needs to be strengthened.
2. Taking a more proactive local approach
Although councils face major structural challenges in influencing demand for Education, Health and Care Plans (because rising requests and legal entitlements make reductions difficult), there is evidence that some councils are more proactive than others. Creative working locally with pyschologists, teachers and families could help get the most out of the limited room for manoeuvre that councils do have under current arrangements.
3. Improving Quality, Efficiency and Outcomes
The quality and efficiency of SEND provision remains inconsistent, as does time spent by children and young people on waiting lists to access it. High spending does not always translate into improved outcomes. To secure value for money, a sharper focus is needed on exactly what is being purchased; and exactly when it is provided.
Acting ahead of SEND reform
SEND reform is coming, but it is still several years away. Councils need to ask themselves challenging questions at local level about how well they are planning; how well they work with key stakeholders and partners in the current system; and what quality of service they are providing families with now, while we wait for national changes to take effect.
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Explore detailed insights and practical recommendations for managing dedicated school grant deficits and improving SEND provision.
If you would like to discuss these findings or explore how they apply to your organisation, feel free to reach out to our team of experts.
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Paul Dossett With more than 38 years working in public sector, I bring a wealth of knowledge and experience to my role as head of our local government sector team.View Profile -
Guy Clifton I am a CIPFA qualified accountant and Fellow of the Institute. I joined the firm in 2007 where I have held a number of senior consulting and advisory roles, including five years as head of local government advisory.View Profile