Special educational needs and disability (Send) debts owed by councils in England are forecast to reach a record £10bn within 18 months, with local authority leaders warning the consequences could be “catastrophic”.
The County Councils Network (CCN), which released the projections on Tuesday, said ministers should underwrite future Send overspends. The group warned that some authorities would otherwise be pushed into effective bankruptcy simply by carrying out their legal duties.
Ministers recently cleared more than £5bn of historic council Send debt, but a surge in requests means authorities expect to have rebuilt that total by April — and to have doubled it by 2028.
Applications for education, health and care plans (EHCPs), which set out the support required for conditions including autism, ADHD and speech or learning difficulties, are thought to have accelerated partly because families and schools are rushing to secure provision before the government’s planned changes to the Send system take effect.
The pressure on town hall budgets mirrors strain elsewhere in public services, with the NHS and the benefits system also confronting rising rates of mental health and neurodevelopmental conditions.
The government-commissioned Fonagy report, published last week, concluded that the increase in these conditions was genuine and caused distress to many who live with them, but that demand for support would be unsustainable unless new methods of managing pressure on public services were adopted.
The CCN argued that the overspending was not the fault of councils, and called on ministers to guarantee Send debts run up by local authorities in future.
Linden Kemkaran, the CCN’s Send spokesperson, said: “These deficits have not accumulated because councils have chosen to spend recklessly: they are the result of having to meet rapidly growing statutory demand, which has only intensified this year, without funding keeping pace.
“If councils are left carrying billions of pounds of Send debt, it will not just be a problem for local authorities. Taxpayers and local communities will ultimately bear the consequences as councils face impossible choices about how to protect frontline services while managing debts that have accrued through no fault of their own.
She added: “As well as councils absorbing skyrocketing costs, children and young people will face increasingly long waits for support and educational outcomes will continue to flatline. New ministers now need to provide certainty that they will deliver the full package of reforms needed to ensure the system works much better for young people, schools and councils.”
The government’s reforms are intended to phase out the existing system in England in favour of more inclusive Send provision in mainstream schools, which in principle would remove the need for an EHCP. Parents, however, appear to be securing formal support now to guard against future uncertainty.
Councils say that without a ministerial guarantee covering future overspending they risk insolvency when accumulated deficits return to their balance sheets in April 2028, the point at which a special “override” arrangement with the Treasury is due to lapse.
Ministers have agreed to fund 90% of the Send debts built up by England’s top-tier councils up to March 2026, but it remains unclear how much of the debt arising afterwards will be covered. Ministers have previously described future support as “appropriate and proportionate” while stating it would “not be unlimited”.
The CCN said any commitment below 90% for future Send debt would amount to a “financial catastrophe” for councils, adding that some authorities would struggle to remain solvent even if they retained just 10% of their Send deficits.
Publicly available internal reports from local authorities show a number are projecting overspends above £100m in 2026-27 alone. Hampshire county council is forecasting a £200m deficit for this year, with Surrey, East Sussex, Kent, Worcestershire and Norfolk county councils among the others affected.
EHCPs are legal documents agreed between local authorities and families in England that detail the support children and young people require up to the age of 25, giving them access to additional funding or places at special schools.
In January, 718,000 young people held an EHCP, a rise of 12.5% over 12 months and the largest annual increase since the plans were introduced in 2014. A further 1.3 million young people have identified special needs, according to official data.
Many councils expect double-digit annual increases over the next three years, and several project that, at current rates, almost one in 10 pupils will hold an EHCP by 2029.
The Fonagy report found that growth in EHCPs had “substantially outpaced the capacity” of the education system to respond. Of the 105,300 statutory assessments carried out in 2024, 94% led to an EHCP being awarded.
Owen Mapley, the chief executive of the Chartered Institute of Public Finance and Accountancy, said: “The continued escalation of Send deficits exposes a serious failure to align statutory responsibilities with funding levels. Local government chief financial officers have been calling attention to this disconnect for years as it undermines proper financial management practice.”
A government spokesperson said: “We inherited a Send system under immense strain, and have always recognised that both deficits and EHCP applications will continue to rise before our reforms are fully rolled out.
“On top of grants to pay off 90% of council deficits, we’re investing billions to make sure every community has easy, early access to specialists like speech and language therapists, and so councils can deliver their tailored local reform plans.
“Fixing the Send system will take time and councils will need further support with deficits, so we will set out the details before March 2028.”
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