Urgent action needed to address the SEN system in England & Wales

On Thursday 24 October 2024, the National Audit Office published its findings in respect of how well the current system is delivering for children and young people in England who have been identified as having special educational needs (SEN).

Summary of Findings and Recommendations

1. Since the Children and Families Act 2014, there has been a significant increase in the number of children identified as having SEN, particularly those with education, health and care (EHC) plans specifying a need for support in more expensive settings.
2. Demand for EHC plans has increased by 140%, leading to 576,000 children with plans in 2024.
3. There has also been a 14% increase in the number of those with SEN support, to 1.14 million pupils in school.
4. Although the Department for Education (DfE) has increased high-needs funding, with a 58% real-terms increase over the last decade, the system is still not delivering better outcomes for children and young people or preventing local authorities from facing significant financial risks.
5. The DfE estimates that some 43% of local authorities will have deficits exceeding or close to their reserves in March 2026, contributing to a cumulative deficit of between £4.3 billion and £4.9 billion when accounting arrangements that stop these deficits impacting local authority reserves are due to end.
6. As such, the current SEN system is not achieving value for money and is unsustainable.
7. While the DfE has been implementing its 2023 plan for system improvement, significant doubts remain that current actions will resolve the challenges facing the system and there is little confidence among stakeholders that current plans would be effective.
8. The government has not yet identified a solution to the management of local authority deficits arising from SEN costs, and ongoing savings programmes are not designed to address these challenges. Given that the current system costs over £10 billion a year, and that the demand for SEN provision is forecast to continue to grow, it is recommended that the government urgently addresses how its current investment can be better spent, including through more inclusive education, identifying and addressing needs earlier and developing a ‘whole system’ approach to help achieve its objectives.

Implications

The report comes along with yet further bad news for local authorities and councils in particular, many of whom are already struggling desperately to control their dwindling reserves. Earlier this week, a local government agency (LGA) survey revealed that one in four councils in England believe they will have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years and the County Councils Networks (CCN) estimated that special educational needs and disabilities services (SEND) deficits risk bankrupting almost three quarters of England’s largest councils within the next three years.

In light of these latest findings, it is clear that urgent government action is needed and it remains to be seen whether any provisions will be made in the upcoming autumn budget (30 October 2024). Bridget Phillipson, the Education Secretary, commented that the SEN system had been “neglected to the point of crisis” by the previous government and that she was “determined to rebuild families’ confidence in a system so many rely on”. However, she also conceded that any reform will take time to implement and while she was confident that the current government could achieve this, she was unable to provide any details of what reform might look like or when it might be achieved.

Arooj Shah, the Chair of the LGA’s Children and Young People Board and Leader of Oldham Metropolitan Borough Council, commented that the LGA is hoping the government will set out in the upcoming budget just how it will reform and adequately fund the SEND system and whether this will include writing off all high-needs deficits so councils do not need to cut other services to balance their budgets.

Of course, while it remains to be seen how the government will tackle this crisis in the coming months and years, it is clear that local authorities and educational establishments need to be alive to the potential knock-on effect caused by such financial pressures in respect of how SEN services and EHC plans are provided and implemented in the short term, in order to avoid being exposed to further liability in the future by way of claims.