National Audit Office SEND report: Special education system 'failing' - could next week’s Budget fix it?

• A new report says the current SEN system is financially unsustainable and not meeting families’ expectations.
• This is despite funding increasing to more than £10 billion a year.
• The number of children with special educational needs (SEN) who need extra help at school has been steadily rising.
• Councils hope more support for the struggling system will arrive with the government’s Budget next week.

The government’s official auditor says that the current system for supporting children with special educational needs in our schools is financially “unsustainable” - but much-needed change may soon be at hand.

In a new report by the National Audit Office released on Wednesday (24 October), the spending watchdog found that the current system in place to support children with special educational needs and disabilities (SEND) in England’s schools was “not achieving value for money”. Nor was it leading to better outcomes for children, despite spending increasing 58% over the past decade to £10.7 billion a year.

The office says there has been soaring demand for support for children with SEN, with the system supporting some 1.9m children across England. Between 2015 and 2024, there was a 140% increase in children with an Education, Health and Care (EHC) plan alone - the lion’s share of the rise related to autistic spectrum disorders; speech, language and communication needs; and social, emotional and mental health needs.

But confidence in the system was falling, the report continued, and it was generally not meeting children’s or families’ expectations. One issue was the wait time for EHC plans - which identify what a child with SEN needs to succeed in education, and sets out additional support to meet those needs. Currently, councils are supposed to issue plans within 20 weeks, but as of 2023 only half of the plans were ready within that timeframe.

Unless something changed soon, local authorities that manage schools could end up in trouble - and that might mean even more problems for SEN pupils and their families. The NAO warned that two out of five councils were at risk of essentially having to declare bankruptcy, because their SEN spending was pushing them into a deficit. At the moment a special accounting arrangement was stopping these deficits from impacting councils’ financial positions, but this ‘statutory override’ is set to end in March 2026.

How do we fix the SEND system?

The Department for Education (DfE) has been implementing a 2023 plan to improve the system created by the previous government. It has introduced a range of initiatives, but the NAO said there was “no evidence these will fully address challenges facing the system” - and none of the 60 stakeholders they consulted believed the plan would fix the problems they saw.

The watchdog made a number of its own recommendations to the department, including considering a “whole system reform” to improve outcomes for children with SEN - and put the system on financially sustainable footing.

A shared understanding of how identifying and supporting children with SEN should be prioritised also needed to be developed in tandem with the NHS, it advised. The DfE should also work on developing a long-term plan for inclusivity in the school system, to make sure schools weren’t being incentivised to exclude pupils with SEN - “which conflicts with local authorities’ duties to find children school places and ensure value for money”.

The NAO also recommended “as a matter of urgency” that the government share its plans for how deficits will be treated and how the financial impact on services will be managed when the statutory override ended, to prevent make sure current high-needs support doesn’t crumble.

NAO head Gareth Davies said in a statement: “Although DfE has increased high-needs funding, the SEN system is still not delivering for children and their families, and DfE’s current actions are unlikely to resolve the challenges.

“The government has not yet identified a solution to manage local authority deficits arising from SEN costs, which ongoing savings programmes will not address,” he continued. “Given that the current system costs over £10 billion a year, and that demand for SEN provision is forecast to increase further, government needs to think urgently about how its current investment can be better spent, including through more inclusive education, and developing a cohesive whole system approach.”

The chair of the Local Government Association’s children and young people board, Arooj Shah, said that the report was “yet another indictment of a failing SEND system that is not meeting the care and support needs of children with special needs”.

But with the government due to present its budget next Wednesday (30 October), which will outline its plans for the economy, taxes, and spending going forwards, there was an opportunity for change - with the right funding. “In next week’s Budget we are hoping that the government will set out how it will reform and adequately fund the SEND system, so children get the support they desperately need,” Councillor Shah continued.

“In particular we are hoping this will include writing off all high needs deficits to ensure councils are not faced with having to cut other services to balance budgets through no fault of their own, or their residents,” she said. “With councils currently able to keep these off their balance sheets, we have serious concerns that many will face a financial cliff-edge, when this flexibility ends in March 2026.”

A previous report by Children’s Commissioner Rachel de Souza found that children with SEN were overrepresented in children missing from education. They are also overrepresented in school absences data.

De Souza said these children were not currently having their needs met in the mainstream school system - but it wasn’t going to be a cheap fix. “We need more specialist provision in families... and in schools. Kids want to go to their local school,” she said. “But that is going to cost, and it is the number one thing, I think, that needs sorting out - alongside attendance - to make sure our kids can go to school.”

What do you think could help to fix the SEN system in our schools? Have your say and make your voice heard by leaving a comment below.