24-10-2024
Immediate government action is needed to address the escalating debt and borrowing crisis in Special Educational Needs and Disabilities (SEND), warns the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Association of Local Authority Treasurers (ALATS).
A survey from ALATS reveals a nationwide SEND deficit currently exceeds £3 billion across English councils and is projected to rise to £8 billion in 2026/27. These deficits are not accounted for in the government’s £22 billion budget gap which is driving councils to the brink of financial collapse.
The survey highlights the unsustainable scale of the deficits which causes local authorities to experience cash flow difficulties. Local authorities are forced to borrow to cover day-to-day spending.
Councils face a catch-22 situation. If the statutory override that shields their balance sheets from SEND deficits is not extended, almost half of all councils responsible for SEND will issue Section 114 notices either in the immediate or medium term. However, even if the statutory override is extended, councils will still face issuing Section 114 notices due to the unsustainable borrowing required to cover essential services.
CIPFA and ALATS call on the government to urgently reform the SEND funding system to ensure long-term financial sustainability. Additionally, CIPFA and ALATS urge increased transparency and accountability in the management of SEND finances, which would allow councils to meet their commitments without incurring unsustainable deficits.
CIPFA Chief Executive Owen Mapley, said:
“The SEND system is fundamentally broken. The sheer scale of high needs deficits is forcing local authorities into cash flow difficulties, putting them in the impossible position where they are having to borrow to cover day-to-day spending. This is unsustainable, and reflects systemic challenges from unfunded SEND commitments, not poor financial management by councils. If the statutory override expiring doesn’t push councils over the edge, then the borrowing for cash flow will.”
President of the Association of Local Authority Treasurers (ALATS), Lorna Baxter, said:
“The SEND system is fundamentally broken and we urge immediate action to address the crisis. The issue has been ‘hidden in plain sight’ through the statutory override which has masked the scale of the problem and allowed the deficits to accumulate to a position which is untenable. Without prompt government intervention, we risk the financial stability of many councils and the essential services they provide.”
Notes to editors
For more information on this topic and the survey from the Association of Local Authority Treasurers (ALATS), please contact the CIPFA Press Office at press@cipfa.org.
About CIPFA
The Chartered Institute of Public Finance and Accountancy (CIPFA) is the only professional accountancy body dedicated exclusively to public finance, setting standards and offering guidance for public sector financial management.
About ALATS
The Association of Local Authority Treasurers Society (ALATS) brings together Presidents from public sector finance groups across the UK. The group’s role is to provide insight and commentary on areas of policy that impact the profession and to engage with government and key stakeholders to strengthen the role of the Director of Finance across the public sector.