UK ministers have rejected claims that plans to absorb the cost of supporting children with Special Educational Needs and Disabilities (SEND) into wider education spending will reduce funding for schools.
The Department for Education (DfE) said Office for Budget Responsibility (OBR) projections were incorrect and failed to consider reforms due early next year.
Under the plans, all Send spending will be moved away from local authorities by 2028, shifting around £6bn of forecasted costs onto government departments.
Councils have welcomed the change, saying rising demand has made Send costs unsustainable, but teaching unions backed OBR warnings that school budgets could be squeezed.
Currently, councils receive a ring-fenced grant for special needs support via the dedicated schools grant.
However, growing demand has pushed their overall Send spending far beyond what they receive. The number of young people with education, health and care plans (EHCPs) has doubled since 2016.
Since 2020, Send deficits have been kept off council balance sheets through a statutory override, now extended to 2027-28. Without this protection, many councils warned they could face insolvency. The OBR projects councils could accumulate £14bn in deficits by 2028, though it remains unclear how much councils will ultimately repay.
Wednesday’s Budget confirmed that by 2028-29, the government will fully absorb the cost of Send provision within departmental budgets. But the OBR said no offsetting savings had been identified, warning that if the £6bn cost came from existing school budgets, mainstream school spending per pupil could fall by 4.9% instead of the 0.5% rise planned.
The DfE strongly disputed this, saying the projections fail to account for upcoming Send reforms. A spokesperson said the government had inherited a system “on its knees” and that upcoming changes will ensure early support for children while stabilising council finances. Full reform plans are expected early next year.
School leaders warned that any reduction in funding would harm educational provision, while the National Education Union has not ruled out strike action if concerns persist.
The Institute for Fiscal Studies said ministers have three options: slow the growth of Send spending, top up schools’ budgets, or reduce mainstream funding to cover high-needs provision.
The government recently delayed its SEND white paper to allow more consultation. Labour MPs have urged ministers not to cut Send provision, recalling backlash to earlier welfare proposals. Shadow Education Secretary Laura Trott said the government must be honest about where the £6bn will come from.
Last year, the National Audit Office described the Send system as broken, saying it was failing to deliver positive outcomes despite large funding increases.
