Conclusion 6

In the longer term, the SEN system remains unviable with piecemeal interventions, such as Safety Valve, doing nothing to provide a financially sustainable system. Based on the Department’s current forecasts on the need for SEN support, the annual gap between funding and forecast costs across local authorities will grow to between £2.9 billion and £3.9 billion in 2027–28. Since 2021, the Department has introduced the ‘Safety Valve’ and ‘Delivering Better Value’ financial support programmes for those local authorities with the worst deficits. However, these do not include all local authorities and will not deliver enough savings, merely acting as a short-term sticking plaster. The Department argues that the situation would be worse without these programmes but also recognises that more needs to be done. Due to a state sector capacity being unable to meet rising demand, local authorities are spending more on costlier independent school placements for children with EHCs - £2 billion in 2022 (46% more than 2018–19) - although the Department wants to rely less on these settings. Home to school transport for children with SEN has seen a 77% real terms cost increase since 2015. The Department needs more granular data so it can work with local authorities to better manage these pressures. 6 recommendation Moving on from its ‘Safety Valve’ programme, the Department must provide specific support and guidance so all local authorities can effectively manage their SEN-related spending sustainably in the longer term. To ensure investment allocation decisions maximise value for money, demand forecasting is vital. This joint work by the Department and local authorities should include differentiating between the number of places to be provided in mainstream and specialist state settings. It should also ensure that any spending on independent schools and transport costs reflects value for money. The Department should work with local authorities to identify ways in which more accountab