English councils are warning that spending on special educational needs and disability support could create a record £10bn debt by 2028. The forecast follows a sharp rise in applications for education, health and care plans, while ministers have yet to clarify how future overspending will be covered.
Demand is rising faster than funding
Councils say the pressure comes from their legal duty to provide support, rather than discretionary spending. Education, health and care plans, or EHCPs, set out the help required for children and young people up to the age of 25, including access to extra funding or special-school places. In January, 718,000 young people had an EHCP, a 12.5% increase over the previous 12 months. A further 1.3 million young people have identified special needs, according to official data. Councils are forecasting annual double-digit increases in demand over the next three years.
The forecast puts a funding mechanism under strain
The government recently cleared more than £5bn in historic council Send debts, and ministers have agreed to pay 90% of English top-tier councils’ debts accumulated to March 2026. However, authorities say new overspending could rebuild that debt figure by April and double it by 2028. The accumulated liability is currently kept off town-hall balance sheets through a special Treasury “override” arrangement. Unless the arrangement is extended or replaced, the debt is due to return to the books in April 2028. This makes the question of who ultimately funds a statutory service central to councils’ financial planning.
Councils seek certainty before reforms arrive
The government’s proposed reforms aim gradually to replace the current system with a more inclusive approach in mainstream schools, reducing the need for an EHCP in principle. Councils and the County Councils Network say parents and schools may be seeking formal plans now to avoid uncertainty before the changes take effect. The CCN argues that anything below a ministerial commitment to pay down 90% of future Send debt would be a financial catastrophe, while some authorities could struggle with solvency even if they retained 10% of their debts. Ministers have said future support will be “appropriate and proportionate”, but not unlimited.
Local forecasts show the budget exposure
Publicly available internal reports show that several councils are forecasting overspends of more than £100m in 2026-27 alone. Hampshire county council expects a £200m deficit for this year, with Surrey, East Sussex, Kent, Worcestershire and Norfolk also listed among authorities facing substantial pressure. The Fonagy report found that the growth in relevant conditions was real, but said demand would be unsustainable without new ways to manage pressure on public services. Of 105,300 statutory assessments carried out in 2024, 94% resulted in an EHCP. The government says details of further deficit support will be set out before March 2028.
| Measure | Source figure |
|---|---|
| Forecast Send debt by 2028 | £10bn |
| Historic council Send debts recently cleared | More than £5bn |
| Young people with EHCPs in January | 718,000 |
| Annual rise in EHCP numbers | 12.5% |
| EHCP assessments carried out in 2024 | 105,300 |
| Assessments resulting in an EHCP | 94% |
| Hampshire county council forecast deficit | £200m |
These deficits have not accumulated because councils have chosen to spend recklessly: they are the result of having to meet rapidly growing statutory demand, which has only intensified this year, without funding keeping pace.
WHY IT MATTERS
The dispute concerns how a legally required service is financed when demand rises faster than the funding available. If future Send debts return to council balance sheets without a clear guarantee, authorities say they may face difficult choices over frontline services, while children and young people could wait longer for support.
Reported from theguardian.com, 2026-10-12. The Tender Wire is published by Otnox.
