English councils face a deepening financial crisis over special educational needs and disability support, with projected debts reaching £10 billion by 2028, officials warn.
The Local Government Association released the forecast as councils struggle with surging applications for EHCP (Education, Health and Care Plan) support. Even after the government cleared more than £5 billion in historic Send debts, authorities predict they will rebuild that entire amount by April 2026 and double it within two years.
The crisis stems from a fundamental mismatch between demand and funding. Applications for Send support have accelerated sharply across English schools. Councils, which bear responsibility for assessments and provision, say they lack sufficient resources to meet need. The gap between what support costs and what central government provides has widened dramatically.
Local Government Association leaders describe the situation as potentially catastrophic for public finances. The scale of the debt threatens councils' ability to fund other services, from social care to waste collection. Some authorities have warned they may need to scale back support quality or restrict access to services.
The government's recent clearance of £5 billion in historic debts was presented as relief for hard-pressed councils. Instead, it has masked a structural problem. The volume of EHCP applications continues climbing faster than resources expand. Councils cannot control demand. Parents and schools increasingly seek formal assessment and support for children with complex needs, autism, and mental health challenges. The post-pandemic period saw particular acceleration in applications.
Funding formulas have not adjusted to match this reality. Send support is expensive. A single EHCP can cost £30,000 to £40,000 annually. Multiply that across hundreds of thousands of children, and costs balloon rapidly. Councils lack dedicated Send budgets at the scale needed. They fund the gap from reserves or by cutting other services.
The Local Government Association is pushing central government for permanent, dedicated Send funding that reflects actual demand. Current arrangements force councils to choose between supporting children with identified needs and maintaining other services.
This affects governance at multiple levels. Schools cannot place children without local authority assessment and funding. Parents face lengthy waits for assessment. Children with unmet needs remain in mainstream settings unprepared for their requirements. The strain on school staffing and wellbeing has intensified.
The political stakes are high. Local authorities, many run by Labour councils, are publicly criticizing Conservative government underfunding. This feeds wider narratives about council crisis and austerity. The Starmer government will inherit this problem if it wins the next election.
For now, councils are drawing down reserves and borrowing to keep Send provision running. That approach has limits. Within two years, many authorities could face genuine insolvency. Some may require central government intervention. Others may be forced to reduce service levels, triggering complaints from parents, campaigners, and schools.
The £10 billion projection reflects more than budget numbers. It signals a failing system where identified need outpaces resources and councils must manage the gap alone. Until central government commits new money proportional to actual Send demand, the debt spiral will continue.