Total council SEND spending could hit £18.2 billion annually by 2028 if system goes unreformed, thinktank warns

The paper warns of a “looming crisis” within local authority SEND spending in England.

In six years, council spending on SEND provision has increased 58.5% in real terms – equivalent to over £5 billion in additional spending.

The thinktank observed: “Now, with the Government promising to pay down 90% of council SEND deficits in the autumn – which has been set to bankrupt three quarters of councils by 2027 – and to assume full responsibility for local authority SEND spending from 2028, this paper makes the case that urgent reform is needed to put SEND spending on a sustainable footing.”

The report found that SEND spending has grown faster in wealthier areas, increasing by 65% in real terms in the 50% most affluent council areas since 2018/19, compared with 51% in the 50% least affluent local authorities.

Meanwhile, it found that spending on SEND transport - including home-to-school travel - has more than doubled in 42 local authorities.

Policy Exchange noted: “On average, spending on administration (heavily tied to the EHCP assessment and appeals process) has risen 135% in real terms since 2018/19, whilst 30% of councils have made cuts to their specialist support services.”

The report also said: “It is important to note that the EHCP assessment process places a significant cost burden on local authorities even in circumstances where an EHCP is not ultimately issued. This spending increase is also likely linked to the extensive costs incurred by local authorities processing and defending SEND Tribunal cases, with the number of EHCP decisions appealed increasing from 6000 in 2018 to 25,000 in 2025.”

In 2024 - 2025, local authority spending on SEND was £13.6 billion.

The report found that spending has “spiked” since 2021/22, with an annual real terms growth rate of 10.3%.

Policy Exchange warned: “Without reform, at the current rate of growth total local authority SEND spending could reach £18.2 billion annually by the end of 2028”.

Looking at spending increases of individual local authorities in the last six years, the report found the largest real terms percentage changes have occurred in the Isles of Scilly (235%), Herefordshire (161%) and Worcestershire (130%).

The report noted: “In real terms, Hampshire County Council saw the largest increase at £184 million over the six-year period, followed by Kent County Council (£160 million) and Norfolk County Council (£122 million). Of the 10 councils which saw the highest real terms increase in expenditure, 9 now run SEND deficits, expected to total £1.2 billion in 2025/26 between them.”

The report warned that the Government “must not delay” in bringing forward reforms to the SEND system.

It concluded: “Local authorities, schools and families need clarity on how the system will operate moving forward. The decision to pay down SEND deficits by 90% from the autumn, and to bring most SEND spending onto the Government books by 2028, necessitates urgent action by the Government to control their future liabilities.

“As part of their reforms the Government must take decisive action to place SEND spending on a sustainable footing, whilst ensuring support reaches the young people who need it most.”

Responding to the report, Cllr Amanda Hopgood, Chair of the Local Government Association’s Children, Young People and Families Committee, said: “Councils want every child and young person to get the support they need. But under the current failing system, the rise in need has left many councils buckling under the strain.  

“We were pleased that government announced it will tackle 90 per cent of councils’ historic high needs deficits, following our call to address the deficits, which removes the immediate threat of insolvency for many councils. Fully writing off historic and future high needs deficits remains critical.

“The challenges within the SEND system are not just financial. The Schools White Paper must deliver brave and bold reform where more children can get the support they need in a mainstream school, without needing a statutory plan.” 

Lottie Winson