The annual bill for special needs education in England has surged to £10 billion, with projections indicating that the number of children and young people eligible for government support through education, health, and care plans could double to 1 million over the next decade, according to a new report by the National Audit Office (NAO).
The NAO investigation revealed that, despite record spending, there has been no improvement in the quality of life for children with special educational needs (SEN). Local authorities are facing financial strain due to increasing demand for special school placements and high-needs funding for specialists, including therapists, psychologists, and teaching assistants.
Gareth Davies, head of the NAO, stated, “Although the Department for Education has increased high-needs funding, the SEN system is still not delivering for children and their families. The current actions by the DfE are unlikely to solve these challenges.” He emphasized that the government has not yet found a way to manage the financial deficits that local authorities face due to SEN costs. Given the existing annual expenditure of over £10 billion and the expected rise in demand for SEN services, the government needs to urgently reconsider how it allocates its funding. This includes investing in more inclusive education and developing a comprehensive approach.
Education Secretary Bridget Phillipson acknowledged that the SEN system had been “neglected to the point of crisis” by the previous administration. “I am determined to restore families’ confidence in a system many depend on. There will be no more short-term fixes regarding the future of our most vulnerable children,” she declared. “The reforms families are demanding will take time, but with a greater emphasis on mainstream services and early intervention, we will create the necessary change.”
The NAO report highlighted that the number of children and young people needing statutory support, as outlined in education, health, and care plans (EHCPs), is projected to rise from 576,000 this year to over 1 million by 2032-33, according to internal forecasts from the Department for Education. Notably, autism spectrum disorders are anticipated to see the most rapid increase, with diagnoses in England’s state schools jumping from 57,000 in 2015-16 to 132,000 last year.
While the report did not provide a clear explanation for this rise in autism diagnoses, it suggested that heightened awareness of the condition, exacerbated by the Covid pandemic, may have played a role. Additionally, schools have incentives to pursue EHCPs for their students to secure high-needs funding.
Education leaders and experts have expressed alarm at the NAO’s findings, which indicate a systemic crisis with increasing responsibilities and costs placed on councils, schools, and families. Tom Rees, CEO of the Ormiston academies trust, emphasized the urgent need for reform, calling the SEN system “the most important and most complex educational reform of the next decade.”
Richard Kramer, CEO of Sense, a charity that assists individuals with complex needs, stated that the report illustrates why families have “totally lost confidence” in the system. “The burden of navigating this failing system can be overwhelming for families,” he noted. “Parents have shared that they are using savings meant for their children’s future even before they start school. Some even leave their jobs to fight for their children’s basic rights.”
The NAO’s analysis comes shortly after the County Councils Network and the Local Government Association (LGA) warned that deficits in SEN spending are pushing local authorities toward financial collapse. Currently, the most affected councils can temporarily hide these deficits using a statutory override called a “safety valve.” However, this override will expire in March 2026, necessitating government intervention to prevent significant cuts to local services.
Arooj Shah, chair of the LGA’s children and young people board, expressed hope that the upcoming budget will outline government plans to reform and adequately fund the special educational needs and disabilities (SEND) system. “We hope this will include writing off all high-needs deficits to prevent councils from cutting essential services to balance budgets due to circumstances beyond their control,” she said. “Many councils will face a financial cliff when this flexibility ends in March 2026.”
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