A crisis of £5 billion in debt, caused by unchecked spending on special educational needs (Send), could bankrupt numerous local authorities in England within two years, according to warnings issued to the UK government.

The overspending crisis stems from inadequate funding to cope with a substantial increase in demand for Special Education Needs and Disability (Send) services over the past decade. Council leaders have described the current system as broken and unsustainable, leaving hundreds of thousands of children and parents unsupported.

Under a special arrangement, the previous government allowed councils to continue overspending on Send without immediately reflecting these debts on their balance sheets. However, these off-balance sheet debts must be settled by April 2026, posing a significant financial challenge to the Labour government.

A scathing report jointly published by the Local Government Association (LGA) and the County Councils Network (CCN) highlights the overwhelming dysfunction of Send services in England. It calls for fundamental reforms, estimating a required £2.2 billion immediate injection to enhance Send provisions within mainstream schools.

Despite Send spending nearly doubling from £4 billion to £9 billion over the past decade, educational outcomes for supported children have not improved significantly, and in some cases, have worsened. The report emphasizes systemic failures rather than individual successes in the Send system.

Education Secretary Bridget Phillipson acknowledged the damning findings of the report and pledged to restore trust in mainstream school support for Send children. She emphasized the need for a carefully planned, collaborative approach involving parents, schools, and councils to achieve lasting reform.

The report also highlights extensive waiting lists for Send assessments and contentious conflicts between parents and councils over access to services. The current system, introduced by Michael Gove in 2014, has seen a 140% increase in children with Education Health and Care Plans (EHCPs) without adequate funding to match the rising demand.

While some attribute the surge in Send enrollments to middle-class advocacy, the report rejects blaming parents and instead points to systemic flaws perpetuating adversarial dynamics and financial strains on local councils.

Local authorities' spending on Send has escalated to £10.8 billion, with projections nearing £12 billion by 2026, far outpacing government funding. The government now faces tough decisions on whether to alleviate or maintain these mounting debts, which threaten the financial stability of local councils.

Tim Oliver, chair of the CCN, criticized the Send system's failure, highlighting widespread difficulties in accessing services, insufficient school capacities, and councils struggling under massive deficits. The looming crisis demands urgent attention and comprehensive reforms to prevent further financial turmoil.