Financial distress in local authorities – impact on SEND

~ Bruce Levitan

In its report “Financial distress in local authorities” published today (1st February 2024) the Levelling Up, Housing and Communities Committee comments in detail on the current funding issues in local authorities. This includes a chapter on SEND, in which it notes:

The amount of funding provided by the Department for Education has not kept pace with this increase in demand and costs [115% over nine years] . Councillor Barry Lewis, leader of Derbyshire County Council, told us that the latest estimate of local authorities’ budget deficits relating specifically to SEND services across England is approximately £2.3 billion, increasing to £3.6 billion by March 2025. The F40 group of local authorities estimates that an additional £4.6 billion in funding is required each year to meet the current demand for SEND support

Levelling Up, Housing and Communities Committee, Financial distress in local authorities Third Report of Session 2023–24

Amongst its conclusions are that:

  • The Government’s use of the statutory override and one-off ‘safety valve’ funding are temporary measures and do not address the underlying mismatch between demand, costs, and annual Dedicated Schools Grant funding.
  • The Government has provided no clarity on whether it will fund, or it will expect local authorities to fund, deficits remaining when the statutory override ends in March 2026. The Government should provide clarity to local authorities on its specific expectations for resolving existing DSG budget deficits, and agree with local authorities a set of realistic and achievable steps, supplemented by sufficient additional funding, for eliminating these existing budget deficits. This should be done by 31 March 2024.
  • The Department should commission a cross-government independent review of Education, Health and Care Plans and consider fundamental reform of this system, to put SEND provision on a financially sustainable footing for local authorities whilst ensuring that all children and young people with SEND have access to the services that they need.
  • Additional funding for home-to-school transport is necessary in the short-term. Therefore, the Government should assess the benefits of introducing new statutory guidance aimed at encouraging the use of less costly forms of shared transportation.

You can download the full report from the UK Parliament Committees website, here.