Educational attainment amongst children with special educational needs and disabilities (SEND) has not improved since the introduction of landmark reforms in 2014, despite councils projected to be spending £12bn on these services by 2026, up from £4bn a decade ago.

The findings come in a new independent report by Isos Partnership commissioned by the County Councils Network and the Local Government Association. Based on substantial engagement with councils, schools, health partners, young people and parents, the study concludes that the current system is not working for families, schools and councils alike.

Download the report here.

With a new government now in place, councils say the need for reform of SEND services is now ‘unavoidable’ with the report setting out a system at breaking point despite families, schools and councils all acting rationally. Councils have called on the new government to set out reform of SEND over the next 18 months, delivering its manifesto pledge to ensure mainstream schools become more inclusive.

The report outlines how councils are struggling to cope with a more than doubling of children on Education, Health and Care Plans (EHCPs) within a system that creates ‘perverse incentives’ to shift responsibility between public bodies and inadvertently creates adversarial relationships between local authorities and parents. It finds a system weighted down by legal disputes through tribunals and an over-reliance on special schools due to a loss of parental confidence that mainstream schools can meet their children’s needs.

Unless the system is fundamentally reformed, the report warns that outcomes for children and young people with SEND will not improve and the system will become even more financially unviable for councils. The report estimates that local authorities are projected to be spending £12bn a year on SEND services by 2026, but will still face a £5bn funding black hole to meet demand that year.

Those deficits are currently being kept off councils’ balance sheets, but if they were to be placed onto their accounts, one in four councils surveyed for the research said that they would cease to be solvent within a year or less: a significant financial cliff edge.

Despite this increase in spending, educational attainment for pupils has not improved, including reading, writing and maths, and at various different ages.

New analysis contained in the report Towards an effective and financially sustainable approach to SEND in England, demonstrates the challenge within the system and the case for change:

• Half a million more children and young people are now identified as having special educational needs. Since the 2014 reforms of the SEND system, the number of children and young people with EHCPs – which set out the level of statutory support individuals are eligible to receive – has risen from 240,183 in 2015 to 575,973 in 2023/24, an increase of 140 per cent over 10 years. A further 1.2 million children in schools are identified as requiring SEN support below the level of a statutory EHCP, up from 990,000 in 2015.
• In seven of the last 10 years, more children with ECHPs have been placed in special schools compared to mainstream settings. Since 2014/15, there has been an increase of 60 per cent in the numbers of children and young people in state-funded special schools and a rise of 132 per cent in the number placed in independent and non-maintained special schools. In total 185,000 pupils with an ECHP were in special schools in 2024, up from 109,000 in 2015. For local authorities, the costs to the high needs block of a maintained specialist school placement are £25,000 per year, with an independent placement costing £58,500. This is compared to £8,200 for placing a child with an EHCP in a mainstream school.
• Higher rates of identification of SEND are not leading to better educational attainment. The report reveals that children with EHCPs have seen performance flatline, or decline, across key educational milestones over the past decade. At the end of primary school in 2022/23, only 8 per cent of children and young people with EHCPs achieved the expected level in reading, writing and mathematics – exactly the same percentage who achieved that level in 2016/17. At the other end of the age spectrum, only 30 per cent of young people with EHCPs achieved Level 2 by age 19 compared with nearly 37 per cent who achieved this level in 2014/15.
• This is despite expenditure by councils tripling over the course of a decade. In 2015, councils SEND related expenditure was £4bn, with this forecast to reach £12bn by 2026.
• These rising costs on SEND have outpaced reform and funding from the previous government. Despite bespoke ‘Safety Valve’ financial support for some councils, transfers from mainstream school budgets and use of councils reserves all projected to total around £1bn between 2019 and 2026, new analysis shows cumulative deficits currently stand £3.2bn this year and are projected to rise to £5bn by 2026.
• With these deficits currently held off councils’ budgets due to a temporary ‘statutory override’ councils face a financial cliff edge when this ends in March 2026. If the statutory override came to an end tomorrow, 1 in 4 councils surveyed for the report said that they would cease to be solvent within a year or less, with half stating they would cease to be solvent in three years or less.

The report recommends the new government invests in building capacity in mainstream schools to meet children’s needs, such as therapists, educational psychologists, and wider inclusion support, helping to reduce the reliance on specialist school places. It also recommends resetting the vision and guiding principles of the SEND system towards inclusion, prevention and earlier support which would cater for young people who do not have a statutory plan, with such plans reserved for the most complex cases.

Reforms would also include a new ‘national framework’ for SEND and establishment of ‘Local Inclusion Partnerships’ to enable more effective assessments, commissioning and collaboration between councils, schools and health. This would be supported by the creation of a National Institute for Inclusive Education as an independent arbiter around inclusive education and support for children and young people with additional needs.

Cllr Tim Oliver, County Councils Network Chairman, said:

“The SEND system is broken. Wide-ranging reform in 2014 was well intentioned but a decade on, it has created a system that does not work for councils, schools and parents alike. Parents often feel they struggle to access schools’ services, lack the capacity to support pupils, and councils have seen a doubling in needs over the last ten years, and have amassed deficits that threaten their financial solvency. Most importantly, education outcomes and employment opportunities have not improved for children with SEND.

“As this landmark report shows, the case for reform is unquestionable. With a new government in place and elected on a ‘change’ platform, it is vital that reform happens over the next 18 months. The government should build on this report’s clear recommendations and work with local government to create a system that is sustainable for councils and schools and works better for parents and pupils.”

Cllr Louise Gittins, Local Government Association Chair, said:

“What parents and children need and deserve is a properly reformed and funded SEND system that meets the care and support requirements of every child and young person with special needs.

“For too long, the current system has failed children with SEND and left parents struggling to ensure their child gets the support they desperately need. As set out in our Local Government White Paper, we are calling for action which builds new capacity and creates inclusion in mainstream settings, supported by adequate and sustainable long-term funding, and the writing off of councils’ high needs deficits.”