For decades the cost of supporting children with special educational needs in England was static. But from 2015 it has risen inexorably – by 60% in real terms – forcing local authorities to take on vast debts and causing chaos for parents and schools. Successive governments have had to allow authorities to park these debts off their books. If they hadn’t, half of them might now be bankrupt.
The last government refused to tackle the problem, leaving this one to clean up the mess. In the budget, Labour pledged to cover the full cost of special needs from 2028/9, to take the pressure off councils. But if numbers continue to grow at the same rate as they have over the past decade that will mean finding another £6bn from cuts elsewhere or new taxes. The Office for Budget Responsibility (OBR) estimates that the move would require a reduction of almost 5% in mainstream school budgets if entirely funded by the Department for Education. There’s no way that’s going to happen.
So ministers are going to have to find a way to stop costs rising, and reform a broken system. The plan is to announce proposals in January, but these have already been delayed several times due to the complexity, and political sensitivity, of the issue.
The big challenge is that there’s no way to save money without changing the eligibility for education, health and care plans (EHCPs). These were introduced in 2014, and the legal rights for parents to secure these plans were made much stronger than under the previous system. It’s certainly not easy to get a plan, as local authorities have introduced all sorts of delays and prevarications to try and manage their creaky finances. But if parents (or schools) are willing and able to persist they will usually succeed. The number of appeals to tribunals has quadrupled since 2017 and local authorities lose 98% of cases. Almost 640,000 pupils now have a plan, up from 240,000 a decade ago.
This doesn’t mean parents are somehow cheating the system; it’s not a process anyone would put themselves through on a whim. Those who get EHCPs genuinely have additional needs, but this is an expensive way to fund them, as every plan requires a bespoke bureaucratic process. Because parents who get an EHCP also choose the school their child attends – within limits – it has also led to an explosion in numbers attending special schools. There isn’t the capacity within the state system to manage this, so increasing numbers are going to expensive independent schools run by canny private equity companies who’ve spotted an opportunity for big profits. We’re now spending more than £2bn a year on private school places, at an average cost of £61,500 a year (compared with £23,900 for state special schools).
Alongside legal changes there have also been big rises in diagnoses for certain conditions – particularly autism spectrum disorder (ASD), developmental language disorder (DLD) and ADHD. The number of pupils with EHCPs for ASD has trebled in the past decade. There’s much debate as to whether this is just a result of changes to diagnostic criteria and better awareness, or increased incidence as a result of societal or other changes. There is no evidence to support speculaton that Covid has made diagnoses shoot up, they increased at the same rate pre-Covid. Either way, it puts more pressure on the system (this is happening in every advanced economy, not just in England).
Outcomes for children with special educational needs are not notably improving despite all the additional spending
To win the argument for limiting EHCP eligibility to the most serious conditions, the government will have to persuade parents and disability charities that a cheaper system can also be a better one for pupils. The EHCP approach is extremely cumbersome and it means support takes a long time to be put in place, as it can take a year or longer to go through the process – only 46% are done in the 20 weeks it is meant to take. There’s also huge variation in the quality of plans. Many can’t be viably implemented and include requirements that are ignored in practice. Outcomes for children with special educational needs are not notably improving despite all the additional spending. Only 30% of young people with EHCPs are getting a GCSE-level qualification by age 19 compared with 37% in 2014/15.
One alternative would be to give schools more money directly and allow them to decide how best to support pupils with additional needs. This would cut out a lot of process and allow teachers to be more responsive, addressing learning challenges much earlier and preventing students from falling further behind. Ministers are also keen to fund more units within mainstream schools for pupils with special educational needs, to allow intensive support while still keeping them included and reducing rocketing transport costs.
But moving to an approach like this, without the same level of legal rights, would be a leap of faith for parents, who tend to have minimal trust in a system that can so often seem obtuse and obstructive. There are already campaign groups set up to push back against changes, even though nothing has yet been announced.
How would schools cope with this new responsibility when they’ve been told to focus on academic attainment, rather than inclusion, for a long time now? Will schools be given more leeway on results with young people who have serious needs? Money was put aside at the spending review for training and new facilities for mainstream schools, but this is a huge transition that would need to be done very carefully.
None of this is made any easier by the government’s unpopularity, or backbench restlessness. For those who will have to sell these reforms, the summer U-turn on welfare cuts looms large. How can they avoid a similar reaction from MPs, who aren’t going to enjoy an inbox full of angry emails from parents? Plus the Lords is full of disability rights campaigners who will be eyeing any changes with scepticism.
Backing out of the reforms is unaffordable, though, given that the Treasury is in no mood to extend further largesse and has locked the DfE in to finding the savings. This looks like being one of the big political battles of 2026.
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