SEND Financial Time Bomb taken on Board by Government

22 April 2026

While we waited for the long-delayed Schools White Paper on Special Education Needs and Disabilities (SEND), published on the 23rd February 2026, another decision was taken in the Budget on 27th November 2025. This decision may turn out to have more impact on how inclusive education provision is for Disabled children and students and those with special educational needs provision.

Increasing numbers of Local Authorities (LAs) in England are overspending their higher needs budget to meet statutory obligations required for provision for SEND Education Health and Care Plans (EHCP). The deficit will be up to £14 billion by 2028, currently deferred to stop councils going bankrupt with a financial trick called a financial override. From 2028/2029, responsibility for all future deficits will pass from councils to central government. It is estimated that the shortfall in funding for English Councils will be £6.3 billion, leading to an overall deficit of £20 billion. Additionally, there will be further financial costs to cover staff salaries and to implement any reforms in the White Paper. Progress towards more inclusive mainstream provision will require double the amount of funding currently allocated. Instead, the government seems more motivated by budget control.

It was revealed at the Budget that the government will take over full responsibility for special educational needs spending from local councils. This has prompted warnings that the Department for Education could be facing a £20 billion time bomb in two years.

What is going on here?

In January 2025, there were 1.7 million children labelled with SEN. 483,000 had an EHCP. The rest were on SEN support funded by a notional £6,000 per pupil out of school funding that is not ring fenced. The proportion of those with SEN that have an EHCP is 27%, which has gone up from 15% in 2007. 97,700 EHCPs were issued in 2024, which has increased by 16% from the previous year. The most common primary need of school pupils was autism with 149,200 pupils requiring support. Following this, 92,000 pupils require support with speech language and communication. Since 2014 Reforms, those aged between 16 and 25 with an EHCP has grown to 155,700 which is a largely new demand on LA funds. 44% of those with EHCP attend mainstream schools and 30% attend special schools.

Currently, there are nearly eight times the number of parents of children with SEND seeking to get an EHCP than when the system was introduced in the academic year 2014-15. Increasingly, parents feel mainstream schools failing their Disabled children. In 2024-2025, 25,000 appeals were registered and 14,009 went all the way to a full hearing of which Local Authorities won 1.1% at a cost of £200m.

An increasing number of decisions in an EHCP are around placement. The Tribunal mainly only looks at EHCP sections B (needs), F (provision) and I (placement). The child’s needs and provisions are presented in such a way that only one type of placement is available to meet their needs, and this is increasingly independent special schools. There are specialist lawyers and expert witnesses that appear to be engaged to ensure certain outcomes.

In general, the Local Authority does not produce the alternative evidence or have the placement to meet the need as established. This placement in independent special school’s cost approximately 2.5 times the amount of a Local Authority special school, and can be much higher. Once the First-tier Special Education Needs and Disability Tribunal has ruled, the Local Authority must place the child there and pay for it unless they can appeal on a matter of law (which is very rare). The largest growth in need is Autism. Private companies have seen the gap and moved in with the Local Authority paying.

The Liberal Democrats said one solution could be a profit cap on private providers and redirecting “millions of public money out of the pockets of private equity and back into frontline support.”

“The government must stop the scandalous profiteering in this sector that is costing the taxpayer millions and harming children’s education. We know by the government’s own admission that placing a child in a private special school is nearly two-and-a-half times more expensive than doing so in the public sector. This is simply indefensible.” (Munira Wilson, MP and the Liberal Democrat education spokesperson)

Research commissioned by the party and carried out by the House of Commons Library showed that the top handful of profiting companies each took home tens of millions a year.

The Witherslack Group Limited, which operates 38 special schools, turned over just over £200 million a year, making £44 million in profit – a margin of over 20%. That profit is 150% what the company made in 2022 – skyrocketing up from an already eyewatering £27 million – while Directors at that company, reports show, made six figure salaries.

CareTech Holdings Limited, another private equity company that provides private SEND schooling, raked in over £53.4 million in annual profit in 2024, with a revenue of £630.4 million. As uncovered by the Times in 2022, that company sent more than £2 million to its founders’ offshore company in the Caribbean, while accepting Government Covid support.

The Outcome First Group operate 47 ASC/SEN schools, with a turnover of £264.3 million and an operating profit of £7.1 million.

Aspris Holdoco Limited operate 28 schools, 62 Children’s Homes and 4 Colleges had a turnover of £194.2 million and an operating profit of £20.9 million in the year up to August 2024.

Cavendish Education run 47 SEN schools and 4 colleges and has a range of interlocking companies that make tracking profits harder.

The average operating profit margin across all for-profit entities, calculated by the Office for National Statistics (ONS), is 8.8 per cent.

The placing of more children in schools such as those above has also led to the SEN Transport Bill rising sharply, to nearly 2 billion in 2025/2026.

The issues that the White Paper aims to address were neatly laid out and answered in the UK Parliamentary Education Select Committee Report last September.

The report emphasised inclusivity in education, and the announcement said that SEND “must become an intrinsic part of the mainstream education system, rather than an addition to it.” and that supporting needs early would ease the pressures on the system. Embedding inclusivity in all education settings, from early years through to post-16, and identifying needs early in a child’s education, will enable support to be provided in the mainstream.

The Department for Education’s SEND reforms must not be based on any withdrawal of statutory entitlements for children and young people with SEND. The department must instead set out plans for reform which increase accountability across the whole of the SEND system, so that many more parents and carers can be confident that their children’s needs will be met, regardless of whether they have a diagnosis or EHCP.

Other main recommendations of the Education Select Committee were:

• The publication of a definition of ‘Inclusive Education’, with good practice examples for schools.
• A unified national framework for ordinarily available provision and SEN support.
• A comprehensive review of the National Funding Formula, with the £6,000 funding allocated to pupils in mainstream schools to be ringfenced and uprated each year in line with inflation.
• The SEND Tribunal should be retained and further empowered to issue legally binding recommendations to health services.
• To continuously update cycles of Initial Teacher Training and the Early Career Framework relating to SEND, and for continuing professional development on SEND to be mandatory for all teachers in mainstream education.

Worryingly, the Government has not answered the Committee in detail, preferring to wait for the White Paper. The accumulated SEND deficits are much more likely to influence the outcome than many of the progressive suggestions from the Education Select Committee.