Councils warn SEND system faces total collapse without major reform to services

Councils say the government 'cannot keep ducking’ reforms to the special educational needs and disabilities (SEND) system as new research reveals a system on course for total collapse with local authorities facing ‘unimaginable’ deficits of £18bn by the end of this Parliament.

The report, released today from the County Councils Network (CCN), finds that despite councils investing £30bn more on SEND services over the last decade, educational outcomes have not improved whilst families feel increasingly negative about the system.

Last month, the government delayed publication of planned reforms to the SEND system. Warning that the research shows a system on ‘course for total collapse’, CCN argues that the government’s continuing inaction ‘only compounds the difficult experiences for families, letting down thousands of young people whilst pushing councils to the financial brink’.

The report’s findings will be debated by over 200 delegates at the CCN’s 2025 Conference on Monday morning. Opening the event, the network’s chair Cllr Matthew Hicks will warn ministers they ‘cannot keep ducking’ major reforms to system in the face of pressure from MPs.

The CCN is calling for ministers to undertake a ‘two-pronged approach’ to prevent the system from collapse. This should include wiping councils’ deficits alongside root and branch change to the SEND system.

Failure to genuinely address the structural issues within the system will see costs continue to outstrip available funding, even if deficits are cleared, with councils on course to be re-accruing debt at the rate of £4.4bn per year across England on their SEND services by 2029 if nothing changes.

The new research, produced by CCN and Isos Partnership, finds that:

• Costs are being driven by a dramatic rise in Education, Health and Care Plans (EHCPs) over the last decade. They reached an all-time high of 638,000 this year, and the number of young people in receipt of them are on course to reach almost 840,000 by the end of this Parliament – up by 32% in just four years. This is a level of demand the present SEND system was never designed for.
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• This surge has driven councils to increasingly rely on expensive private school places, which have risen 165% since 2015 and the total number of 34,000 pupils is almost one in five special school placements. With the yearly average cost of these independent and non-maintained private school placements set to reach £72,000 per pupil compared to £10,000 in a mainstream school by 2029, councils are on course to be spending £3.2bn a year on private school placements for young people with EHCPs.
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• In March 2025, the debt accrued by councils for SEND services – money that has already been spent but is being kept off budget books via the ‘statutory override’ – stood at £4bn. With SEND costs rising 23% over the last twelve months, and with demand showing no sign of abating councils have reached a tipping point: these deficits are projected to grow to a total and cumulative deficit of £17.8bn by 2029. To put this in perspective, that would be an unfunded debt of nearly £1,000 pounds for every child and young person in England – or more than what councils across the country spent on children’s social care last year.
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• The in-year deficit councils are accruing every 12 months is set to reach £4.4bn in 2029 if nothing changes, which is why it is vital government sets out reforms to contain costs, alongside wiping the total debt pile accumulated. If government chooses not to wipe the total deficit, more than half of councils surveyed for the report (59 in total) would go bankrupt overnight in March 2028 when the statutory override is due to end.
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• Despite investing over £30bn more over the last decade neither educational outcomes nor family satisfaction with the system have improved. The percentage of GCSE students with EHCPs achieving Attainment 8 in 2025 is 14% - roughly the same as in 2019 and lower than the number achieving Attainment 8 in 2021. In addition, the percentage of 19 year olds with EHCPs who attained Level 2 (equivalent to five GCSEs) is 30% - a decline from 37% of young people a decade ago.
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• Councils are increasingly having to take money from mainstream schools to prop up SEND services, whilst losing hundreds of millions each year in servicing high-needs deficits. The report reveals that last year £150m, largely from mainstream schools, was re-routed to the local authority’s high needs budget. Councils are also losing £326m per year in lost interest and debt service charges from rising deficits – a figure that could reach almost £1bn by the end of the Parliament if they are not wiped.

The government has said it will ‘work with councils to manage their SEND deficits’ and promised further detail later this year.

The CCN argues that the government must completely wipe the total deficit councils have accrued across the country, giving them a clean slate in which to begin reforming the system.

But simply wiping the deficits will not be enough if the issues that are driving rising costs are not addressed – which is why genuine, and root and branch change is essential. With speculation that reform may not be as wide-ranging as envisioned, the CCN warns that failure to truly tackle and curtail costs will set the system up for total collapse come the end of this Parliament.

To avert this, the report recommends the new government invests in building capacity in mainstream schools to meet more SEND children’s needs, such as therapists, educational psychologists, and wider inclusion and preventative support.

The report also argues that the government should consider setting up a new framework which sets out a national set of SEND standards for councils and families alongside legislative change to focus EHCPs on those most in need, underpinned by reforms to the tribunal system.

Cllr Matthew Hicks, Chair of the County Councils Network, said:

“Last month’s delay to the Schools White Paper was massively disappointing not only for councils, but for families too. Time is of the essence: the government’s continuing inaction only compounds the difficult experiences for families, letting down thousands of young people whilst pushing councils to the financial brink.

“As today’s research shows, the system is heading towards total collapse in little over four years. This could mean families facing even longer waits for support, councils facing a level of demand that the system was never designed for, and local authorities staring down unimaginable deficits of almost £18bn.

“Now is the time to be bold and act decisively: government cannot keep ducking reform and ministers must use the delay to set out comprehensive and long-lasting change to the system.”

“Alongside wiping councils’ deficits, this will mean tough but necessary reforms that extend beyond making mainstream schools more inclusive – including legislative change to focus EHCPs on those most in need, underpinned by reforms to the tribunal system”.

Cllr Bill Revans, Special Educational Needs and Disabilities Spokesperson for the County Councils Network, added:

“It is widely accepted that the SEND system is broken, and it’s failing families, young people, and councils alike. Despite an extra £30 billion invested over the past decade, outcomes for children haven’t improved. The question is no longer whether reform is needed, but how far the government is willing to go to fix a system that simply isn’t working.”