£5bn council SEND debts to be paid off by government
In a significant move to avert a "financial cliff edge" for local government, the UK government announced on Monday, 9 February 2026, that it will spend £5 billion to write off 90% of the historic debts English councils have accumulated in providing support for children with Special Educational Needs and Disabilities (SEND).
The funding package, part of the 2026/27 Local Government Finance Settlement, directly addresses a looming crisis where eight out of ten councils faced potential bankruptcy due to ballooning high-needs deficits.
Clearing the Deficit: Key Details 💰
The government’s intervention aims to stabilize council finances before a critical accounting "statutory override" expires in 2028.
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90% Write-Off: The government will provide a High Needs Stability Grant in Autumn 2026 to pay off 90% of accumulated deficits for the period up to March 2026.
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The Funding Gap: While the £5 billion covers the bulk of existing debt, the Office for Budget Responsibility (OBR) has forecast that total cumulative deficits could still reach £14 billion by 2028 without systemic reform.
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Conditions for Relief: To secure the grant, local authorities must submit and gain approval for a Local SEND Reform Plan, demonstrating how they will transition to a more sustainable model.
Response from Local Leaders
Cllr Louise Gittins, Chair of the Local Government Association (LGA), welcomed the "recognition that these costs are not of councils' making" but cautioned that the system remains under extreme pressure.
The County Councils Network (CCN) also noted that while the pledge provides immediate relief, the remaining 10% of debt and any new overspends between 2026 and 2028 must still be managed by councils with "appropriate and proportionate" (but limited) government support.
The Road to Reform: Schools White Paper 🏫
The debt write-off is the first phase of a broader strategy to be detailed in a forthcoming Schools White Paper.
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Inclusion Focus: The paper is expected to outline an "inclusive education system" that integrates more children with SEND into mainstream classrooms, reducing the reliance on expensive specialist placements.
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Future Funding: From 2028/29, the government has committed to managing SEND spending within its own central departmental budget (DEL), ensuring councils are no longer required to fund these costs from their general reserves.
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Specialist Places: The government previously announced plans to create 50,000 specialist places within traditional schools to meet the needs of the 1.7 million students in England currently receiving SEND support.
