There is always an extra cost to delivering a tailored service, which is how Labour describes its new support system for school-age children with special educational needs and disabilities (Send) in England.
The Department for Education says it will ditch a “one size fits all” system – one that has “traumatised too many families” – in favour of one that offers “experts at hand” who can assess the individual needs of each pupil.
However, parents and teachers will wonder what resources ministers can secure for such a bold revamp – and where will the money come from, given that Whitehall budgets were set in stone last year under a three-year deal. They will also note that much of the mood music before the announcement has been about the need to ultimately bring the cost of supporting pupils with special needs under control.
There will inevitably be extra pressure on schools and local authorities to meet the needs of the 1.7 million in the system and the many more expected over the next decade to secure education, health and care plans (EHCPs), which is the assessment certificate needed to qualify for extra services.
Here we look at the likely costs and the hurdles in front of the education secretary, Bridget Phillipson.
What is the annual cost?
Send services in the last financial year was put at £11bn by the Institute for Fiscal Studies. The bill rose by almost 60%, or £4bn, between 2015–16 and 2024–25, once inflation was taken into account, the thinktank says.
Since 2014, when the Tories created the current system, the dedicated schools grant has struggled to absorb the rising costs. In 2020, the situation was out of control and the then prime minister, Boris Johnson, allowed local authorities to off-load costs into a separate facility, known as the override, to protect spending on existing services.
The override allows local authorities to borrow the sums needed “off the books”, storing up overspends from one year to the next.
Labour extended the override last year to give itself some breathing space in advance of a new financial deal.
Graphic showing a breakdown of the primary need identified in EHCPs since 2014
What new money is available?
This month, the government said it would clear £5bn of historical Send debt. There were strings attached, but local authorities breathed a sigh of relief.
Councils had told ministers that 90% of them would need to file for bankruptcy unless overspending, which was heading for £14bn in total by 2027, was sorted.
There is also relief for overspending this year and next year, but the government has backed away from giving specific numbers, leaving councils in the dark.
By 2029, the annual overspend is expected by the Office for Budget Responsibility (OBR), the Treasury’s independent forecaster, to be £6bn. The chancellor, Rachel Reeves, has said the override will be finally killed off in 2029, when all spending on Send will be absorbed into Whitehall budgets.
How much more is the Send budget expected to increase?
Graphic showing diffence in the amount spent and funding available
As so often, the interaction between existing budgets and announcement of new cash spread over several years can be opaque.
There will be an extra £200m to train teachers in the latest teaching techniques and information, which is about £450 a teacher in mainstream primary and secondary education.
While this allocation may seem limited, these teachers will be supported by an influx of educational psychologists, backed by an “experts at hand” fund costing £1.8bn.
In addition, each school will get access to a £1.6bn “inclusion grant” to pay for “small group speech and language support” and respond to “the most commonly occurring Send needs”.
The IFS says these sums collectively add up to about £1bn in extra funding in 2026-27, rising to £1.5bn a year in 2028-29.
And schools will receive a slice of a £750m-a-year capital budget to create an “inclusion base” inside the school. This will allow them to create more than 60,000 more specialist places than exist today in the mainly private sector, Phillipson says.
Where does the money come from?
That’s a question MPs on the all-party Treasury committee want to ask Reeves when she appears before them next month.
The committee’s chair, Meg Hillier, is concerned that the debt write-offs and pledges to end the override are insufficiently accounted for.
Officials at the OBR estimated at the time of the last budget that a backlog of historical spending on Send will reach £18bn by 2028-29. While there is a pledge to write off some of this debt, which department will pay is so far unknown.
And while there is an extra £3.5bn in the education budget to cover some of the £6bn shortfall, how new spending will interact with existing spending is not known, given the pledge by Phillipson to honour existing individual Send plans.
How can ministers cut the cost?
As with the welfare changes put forward last year, ministers argue they can improve the system and reduce the costs of providing it.
Many MPs are likely to react with the same scepticism as with the welfare proposals.
Phillipson’s pitch is that a good deal of Send services can be shifted away from expensive private-sector providers to units based in mainstream schools, allowing the outcomes for students to be better and cheaper for the state.
However, even if we accept that mainstream schools can adapt, there are several question marks hanging over the scheme. For instance, where will they get the teachers to provide the service? Schools already struggle to retain and recruit, even in areas where rolls are falling due to lower fertility rates and fewer teachers are needed.
Phillipson wants an army of educational psychologists, but they are few, often because the rates of pay are low when compared with the level of study needed to become one. The same applies to teachers, who have seen salaries stagnate this decade as successive pay deals were used to increase the earnings of new starters.
Probably the £1.6bn inclusion grant is the crux of the package, which aims to tackle the “most commonly occurring Send needs”. Implemented with the support from head teachers and unions, it could make a significant difference to the quality and coast of Send services.
And if inclusion zones can reduce local authority reliance on private providers, there are big savings to be made there as well. But that’s a big if.
