Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Accepted
Government has not yet presented a solution for managing post-2026 SEND budget deficits.
Recommendation
Many local authorities have seen rises in Special Educational Needs (SEND) demand, and the NAO has previously reported that 101 local authorities overspent their SEND-related budgets in 2022–23.67 Department for Education (DfE) estimates suggest that by the end of 2027–28, overspending on SEND-related budgets could be between £2.9 billion and £3.9 billion.68 Since 2021, MHCLG has allowed local authorities to exclude these deficits from their main revenue budgets, termed the ‘statutory override’. The override is only in place until March 2026. We previously asked government to develop a fair and appropriate solution for when the statutory override 57 C&AG’s Report, para 3.30 58 C&AG’s Report, para 22 59 Q 3 60 Q 57 61 C&AG’s Report, para 3.31 62 LGFS0019 63 Q 12 64 LGFS0001, LGFS0004, LGFS0019 65 Qq 56, 57 66 Q 57 67 C&AG’s Report, para 3.35 68 C&AG’s Report, para 3.35 18 ends and to set out its plans, as a matter of urgency by March 2025.69 However, although our recommendation was accepted, a solution for the override and plans for how local authorities will manage cumulative deficits after March 2026 have not yet been brought forward.70
Government Response Summary
The government agrees, committing to a phased transition to a new SEND system, extending the statutory override until the end of 2027-28, and promising a White Paper by Autumn 2025 with further details on managing deficits.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: end of 2025 5.2 This government recognises the pressures local authorities are facing because of their Dedicated School Grant deficits. The Department for Education Spending Review settlement confirmed funding for reform of the current Special Education Needs and Disabilities (SEND) system, details of which will be set out in a White Paper in Autumn 2025. 5.3 The government will commence a phased transition process to a new SEND system which will include working with local authorities to manage their system, including deficits, alongside an extension to the Dedicated Schools Grant Statutory Override, previously due to end in March 2026, until the end of 2027-28. The government will set out more detail at the provisional Local Government Finance Settlement on the plan for supporting local authorities with both historic and accruing deficits.