The UK government has announced that it will assume full responsibility for Special Educational Needs and Disabilities (SEND) funding from local councils starting April 2028. While local authorities have welcomed the move, the Office for Budget Responsibility (OBR) has issued a warning that the transition could create a £20bn fiscal timebomb if funding plans remain unclear.
Projected SEND Spending Surge
According to the OBR, annual SEND spending in England is set to rise to £6 billion by 2028, highlighting the urgent need for reforms. In addition to future spending, the government must also decide how to address the £14 billion in accumulated SEND deficits currently held by councils due to overspending since 2020.
Although ministers disclosed plans to take over SEND spending responsibilities, they have not yet explained how the historic deficit and future financial pressure will be funded.
Possible Impact on School Budgets
The OBR cautioned that if the extra SEND costs are absorbed within the Department for Education’s (DfE) mainstream school budget, it could result in a 4.9% real-terms drop in spending per pupil from 2028–29, instead of the planned 0.5% increase.
A DfE spokesperson responded by saying the OBR projections do not account for upcoming SEND reforms. The government also insisted that any deficit will be managed within the overall national budget.
Reforms Expected Early Next Year
Chancellor Rachel Reeves denied that the changes would lead to cuts, insisting that reforms are focused on improving the system for children, parents and schools — not saving money. She expressed her preference for greater integration of children into mainstream schools, wherever possible.
Experts, however, say the government is running out of time to introduce reforms that could significantly reduce costs. Education policy specialists warn that repairing SEND finances must not come at the cost of mainstream school funding.
Councils Fear “Financial Collapse” Without Clarity
Local councils have been struggling with soaring SEND demand, driven largely by rising Education, Health and Care Plan (EHCP) applications, which have more than doubled over the past decade to 639,000. The surge has forced councils to depend heavily on private specialist schools, increasing costs even further.
Council leaders welcomed the shift of funding responsibility to central government but stressed the need for a clear plan to wipe out the £14bn deficit before the current accounting override ends in 2028. Without action, 90% of top-tier councils could face effective bankruptcy.
Call for Long-Term Structural Reform
Financial experts say that centralising SEND funding could relieve immediate pressure on councils, but only if the government develops a sustainable, well-funded system that protects children’s services and prevents future deficits.
