Escalating SEND expenses to force four in five English local authorities into bankruptcy, leaders warn
A local authority in England is proposing to raise council tax beyond legal limits to fund special educational needs spending, as council leaders warn that four in five English local authorities risk effective bankruptcy without significant government reforms to the system, as noted by The Guardian.
Bournemouth, Christchurch and Poole council has asked ministers for permission to increase council tax by 7.5% from April, breaking the 4.99% cap, to cover the £10m annual costs of financing loans for its Send deficit. The council’s accumulated Send deficit stands at £184m and is anticipated to reach £380m by the end of March 2028.
This council has been technically insolvent since April 2025, when its Send deficit exceeded its available financial reserves. It plans to borrow £95m over the next year to bridge the gap between government funding for Send services and the amount it is legally required to spend.
Broader Financial Crisis
The Local Government Association states that 95% of top-tier councils are operating Send deficits, with four-fifths having to cut council services or take out loans to meet daily financing costs for Send overspends. Send deficits across local authorities are projected to reach £14bn in two years’ time.
Guardian analysis of council papers reveals the scale of some deficits: Hampshire county council projects an accumulated deficit of £706m by March 2028, West Sussex county council expects £414m, and Suffolk county council £250m.
An accounting “override” that allows councils to keep Send spending deficits off balance sheet will end in March 2028. The LGA survey suggests that if deficits are not cleared by then, 79% of councils will effectively become insolvent overnight.
Government Reforms and Challenges
The government is expected to publish a long-awaited education white paper in the coming weeks, setting out proposals to overhaul the Send system, which is regarded as broken by parents and schools and financially unsustainable by councils.
Send reforms are considered politically fraught, with ministers anxious to slow spending growth while avoiding a backbench rebellion and a damaging clash with parents and charities over concerns that existing children’s rights will be diluted.
It is unclear whether the government would wipe historical Send debts without guarantees from councils that they will cut ongoing costs, partly by shifting more Send provision into local mainstream schools and reducing reliance on more expensive private specialist schools.
Outcomes and Fairness Concerns
The LGA said that despite record investment and a high rate of assessment and identification of needs, there is no clear evidence that outcomes for children with Send have been improving.
Much of the spending increase relates to the rapid growth in children and young people having education, health and care plans, which theoretically guarantee support. Numbers have risen from 240,000 in 2014 to about 640,000.
Concerns exist that a no-strings-attached debt write-off would raise fairness issues. A Guardian investigation found that of the 32 councils with Send deficits over £50m, 24 were in the wealthiest areas of England.
Even if accumulated debts were cleared in 2028, the LGA says failure to reform the system would result in ongoing spending exceeding budgets in 95% of council areas. The Office for Budget Responsibility estimates this funding gap at £6bn in 2028-29.
Amanda Hopgood, chair of the LGA’s children, young people and families committee, said: “Councils are committed to supporting every child and young person to achieve their potential and clearly what is important is that children and young people get the support they need. But under the current system, the rise in support need has left many councils buckling under the strain.”
The government was approached for comment.
