The £6bn black hole that could change children’s lives

£6bn Funding Gap Looms as Government Prepares SEND System Reforms

The government is expected to announce reforms to England’s special educational needs and disabilities (SEND) system within weeks, amid warnings that long-standing funding pressures have left the system financially unsustainable.

A Sky News investigation highlights the scale of the challenge facing ministers as they consider changes to a framework that has been in place for more than a decade and now carries a projected funding shortfall of billions of pounds.

Figures from the Department for Education show that one in five children in England is identified as having special educational needs, with most supported within mainstream schools. However, a growing proportion of children receive legally binding education, health and care plans (EHCPs), which provide access to additional funding and, in some cases, specialist or independent special schools.

The number of children with EHCPs has almost doubled since 2017 and is expected to continue rising through the end of the decade. This growth has placed intense strain on local authorities, schools and support services.

In 2024, around 6,500 children waited more than a year for an EHCP, while professionals reported being overwhelmed by administrative demands rather than focusing on direct support. Families who fail to secure plans are increasingly turning to tribunals, with 21,000 appeals lodged in 2023—99% of which were upheld in favour of parents. The sharpest increase in EHCPs has been among pupils diagnosed with autism.

As a result, spending on high-needs education has exceeded available funding for several years. The Institute for Fiscal Studies has projected an annual funding deficit of £6bn within two years, despite government commitments to cover up to 90% of historic council deficits accrued over the past decade.

Without reform, analysts warn that costs will continue to rise faster than funding, pushing local authorities back into deep financial difficulty.

Matthew Hicks, chair of the County Council Network and leader of Suffolk County Council, told Sky News the system requires “root and branch reform.”

“The scale of demand has grown dramatically,” he said. “In my own county, we’ve gone from about 5,500 children with education, health and care plans to more than 11,000 in a very short period of time.”

He warned that failure to act could leave dozens of councils unable to cope financially.

Ministers have indicated they want fewer children educated in special schools, with more supported in mainstream settings closer to home. However, experts caution that this approach would require significant investment to ensure adequate support and prevent vulnerable pupils from disengaging from education altogether.

Sky News understands the government is considering limiting the number of children eligible for individual, per-pupil funding packages and reducing reliance on tribunals. One proposal discussed last year would raise the funding threshold at which councils step in—from around £6,000 per pupil to figures potentially exceeding £40,000.

The Department for Education said no decisions have been taken and insisted that reforms are not being driven by cost-cutting.

Education leaders have warned against tightening access to funding. Andy Nowak, executive head of The Rise School in west London, which supports autistic pupils, said mainstream schools would need substantial investment and cultural change to meet more complex needs.

“Without that,” he said, “many young people and families would be failed.”

Former Conservative education secretary Nicky Morgan said the SEND system was designed for a very different era and cautioned against assuming that mainstream provision would deliver quick savings.

Liberal Democrat leader Ed Davey, whose son has a disability, said early intervention is essential but vowed to oppose any significant reduction in legal protections for children.

“Those rights are critical,” he said. “What’s needed is a genuine transformation of the system, not narrow changes that risk failing families.”