Special Educational Needs and Disabilities costs are putting pressure on councils - Carl Les

When the Autumn Budget was announced, the Office for Budget Responsibility considered SEND deficits nationally. They opined that this was the one risk that has “partly crystallised in this forecast”. In other words, the risk is becoming reality. It went on to say that although there has been short-term increases in government financial support for SEND, significant risks remain. If SEND spending needs continue to exceed government funding then “some local authorities may be placed in financial distress or be unable to set balanced budgets from 2026/27 onwards”. Having just spent many hours last Friday setting a balanced budget, I can appreciate the significant warning in this statement. We required a contribution of £5m from reserves, prudently gathered over a number of years. The OBR continued “the DfE estimates that a third of local authorities will have cumulative deficits” that will exceed “their reserves in March 2026”. It is a small comfort that this is not likely to happen here, but we will have competing priorities for our reserves – that's why we have them.

All this is predicated on a financial device called the “statutory override” being discontinued as announced, but there is no indication that this will not happen.

As I have mentioned previously the National Audit Office, another government watchdog, has reported that the system is “unsustainable”. Moreover they state “the government has no current solution to manage the local authority deficit arising from SEND costs”. Every council has overspent its allocations since 2016, principally because of increased transport costs. This is primarily a rural issue, as rural councils are bearing 57 per cent of the increased costs, although we educate only 42 per cent of pupils. However again it`s little comfort to know that we are not alone.

So how does this impact on North Yorkshire? The Code of Practice 2014, introduced not by a Labour government, was well-intentioned and designed to improve SEND support, including for those up to age 25. However it was insufficiently funded from the start as it was intended that the reforms would save money whilst improving provision.

In North Yorkshire numbers have risen from circa 1,750 in 2015 to well in excess of 5,000 in 2024. Our aspiration remains that every child gets the support they need, but our forecasts show a deficit of £90m plus by March 2028. Our accumulated deficit in March was £13m, and we are projecting an annual £7m in-year deficit for this year. We have never spent so much money on SEND, yet the current system is not serving parents, schools nor the Council.

We need to increase confidence in mainstream provision and provide the right local provision in England's largest county. This will still not address the financial pressures. Deprivation is not an accurate indicator of need for SEND yet underpins the funding per head nationally. We are funded 148th out of 151 LAs. We receive one of the lowest capital funding allocations per head. All school sectors in North Yorkshire regularly report significant pressure in high needs funding and supporting children with additional needs. And if there is insufficient specialist State provision consequently there is an over-reliance on costly independent provision and increased transport demands.

One of the difficulties in setting our budget was the sudden hit we took in the removal of the Rural Services Support Grant. At £14.3m the largest reduction in the country, and so a significant financial challenge going forward on a recurring, annual basis. It has been replaced by a highly targeted Recovery Grant for areas with high deprivation. Just three rural areas, members of the County Councils Network (CCN) as we are, received a combined total of £20m from the new Recovery Grant. This is three per cent of the total, despite CCN members representing over 50 per cent of the population of England. Ironically it was a previous Labour government that introduced the concept of “rural proofing” to government policies, never repealed. Quietly dropped? Rurality and deprivation should not be made competitors for funding. Both are valid.

Carl Les is the Leader of North Yorkshire Council.