UK Budget 2025: Government increases funding for segregated provision

16 December 2025

On 26th November, UK Chancellor Rachel Reeves MP delivered her long-awaited Budget. ALLFIE is deeply concerned that this Budget further entrenches the government’s direction of travel: denying Disabled people our right to Inclusive Education. By boosting investment in segregated provision, while failing to adequately resource support for Disabled students in mainstream settings, the government is undermining Article 24 of the UN Convention on the Rights of Persons with Disabilities (UNCRPD) and pushing the education system in the wrong direction.  

Expanding segregated provision 

In 2025-26, part of the additional £740 million in capital funding will be directed towards increasing segregated provision, such as special schools and SEN units within mainstream schools. ALLFIE is concerned that this will outweigh any gains achieved through increased investment in accessibility and resource bases/resourced provision within mainstream schools. If the government were committed to Inclusive Education, it would stop investing in segregated provision and channel funds towards ensuring accessibility and adequate support for Disabled students within mainstream schools.  

Insufficient funding for local authorities and schools 

Under the current system, the government can only ensure adequate support for Disabled students within mainstream schools by funding local authorities more effectively. The Budget allocates an additional £1 billion for high-needs block^* and £3 billion for mainstream funding** under the Dedicated Schools Grant (DSG). However, these increases are unlikely to ensure adequate support for Disabled students within mainstream schools due to the chronic underfunding of local authorities and schools over the years. Inequalities between areas will persist or widen as well-resourced local authorities and schools may deliver better support, while under-resourced ones fall further behind. 

Where is the budget for resource schools? 

The Budget document also indicates that after the end of the “Statutory Override” (2027–28), local authorities should not have to fund future SEND costs from their general funds. ALLFIE is concerned because the government has not yet set out a clear plan on how it is going to fund support for Disabled students in the future, except that: 

“future costs will be managed, in full, within the overall government budget.” 

There is no intention to resource schools as a major drive to ensure Inclusive Education. Thus, the government’s intention is to reduce the current budget allocation that enables Disabled children to attend mainstream school with support without directing resourcing into making Inclusive Education work, which would address all schools being resourced, improve access and become more inclusive. 

Impact of Welfare Reforms 

Welfare reforms outlined in the Budget, including increased scrutiny of Personal Independence Payment (PIP),  changes to the Motability scheme, and adjustments to Universal Credit, will disproportionately effect Disabled people from under-resourced backgrounds, undermining financial and social security, access to transport, and broader well-being, which will  affect their access and engagement in education. These budget measures will continue to contribute to the deepening of existing inequalities and undermine inclusion both in and beyond the classroom.  

Training and Accountability  

A major omission from the Budget is the absence of ring-fenced funding for teacher training and the wider systemic changes needed to achieve inclusion. There is no commitment to strengthen national standards, improve inspection frameworks, or mandate to co-produce with Disabled children and young people, their families, or Disabled People’s Organisations. Inclusive Education cannot happen without well-trained staff, consistent national oversight, robust accountability standards, and culture change across schools and local authorities. 

What Next? 

The Department or Education (DfE) is due to publish its proposed SEND reforms in a Schools White Paper in January, but the budget made no mention of resourcing for the SEND reform agenda. Overall, the forthcoming Schools White Paper must address the gaps identified within our briefing. It must define Inclusive Education in line with Article 24 of the UNCRPD; establish national standards; set clear entitlements and resource expectations for Disabled students; require comprehensive training for all education staff; and create strong accountability structures. The government has a responsibility, and an opportunity, to build an education system where every Disabled child and young person can thrive. It is time to deliver on that promise. 

* Local authorities use the high-needs block budget to fund provision for Disabled children and young people who require support beyond what mainstream school budgets can ordinarily provide.

** Part of the mainstream funding is used to support Disabled children without an EHCP, or to meet the first £6,000 of support for those with an EHCP.