A council has issued a cautionary statement, indicating the potential for insolvency this year, attributing the precarious financial situation to substantial deficits incurred in special education needs. This marks the latest development in the ongoing crisis surrounding local government funding.

Since 2015, a majority of English councils have exceeded their budgets for special education needs and disabilities (SEND). This overspending was triggered by the government's extension of the age range for individuals eligible for SEND support, without accompanying the move with the essential funding for councils. Consequently, these deficits have had a cascading effect on the overall education budgets of councils, known as the dedicated schools grant (DSG).

The Bournemouth, Christchurch, and Poole (BCP) council have amassed a collective shortfall of approximately £60 million in their Dedicated Schools Grant (DSG) budget over the past few years. The council asserts that eliminating this deficit would necessitate making unacceptable cuts to Special Education Needs and Disabilities (SEND) services and mainstream school budgets. Additionally, a recent report from the BCP council cautioned that its financial viability is on the verge of jeopardy due to government accountancy rules.

Traditionally, education deficits have repercussions for the overall financial well-being of councils. Nevertheless, since 2020, due to numerous councils exceeding their education budgets, the government has implemented a "statutory override." This provision excludes these deficits from evaluations of councils' financial health, essentially keeping them "off the books."

The existing override, granted an extension once, is scheduled to expire at the conclusion of March 2026, falling just within the 2025-26 financial year.

According to the report from the Bournemouth, Christchurch, and Poole (BCP) council, once the statutory override lapses, the accumulated Dedicated Schools Grant (DSG) deficit will surpass the council's entire reserves, rendering the council technically insolvent. In the absence of an extension, it is anticipated that the council's director of finance would need to issue a Section 114 notice in December 2024, as it would be impracticable to establish a balanced budget for 2025-26.

From 2018 onwards, eight English councils have released Section 114 notices, indicating an inability to reconcile their budget and essentially declaring bankruptcy. Thus far, none of these instances have been linked to challenges in Special Education Needs and Disabilities (SEND) education. However, the report from the Bournemouth, Christchurch, and Poole (BCP) council highlights how the conclusion of the statutory override might catalyze additional council insolvencies, possibly even before the override's designated expiration date.

The Local Government Association, representing councils throughout England, emphasizes the need for the government to promptly eliminate all high-needs deficits. This call is made to secure certainty and prevent councils from being compelled to reduce other services in order to balance budgets, a situation not attributable to their actions or those of their residents.

Adam Sofianos, residing in the BCP area, shared with the Observer that securing an education, health, and care plan (EHCP) for his neurodivergent son in 2021 was a "comparatively smooth" process. However, he notes a deterioration in the system now, citing a lack of funding for additional staff. This has resulted in a more challenging experience, with the school having only one full-time Send team member for 600 children. He emphasizes that this is a common issue across schools nationwide, with increased workload but an unchanged workforce.

Sofianos is currently in the process of seeking referrals for identifying additional needs, a task that has become considerably more time-consuming. He disputes recent assertions that the demand for Send is rising due to middle-class parents viewing EHCPs as a "golden ticket."

He states, “An EHCP is not a golden ticket or a free pass. It’s a lifeline. It’s a safety net that protects a Send child in their school journey.”

In response, a government spokesperson mentioned, “We are collaborating with affected councils on deficits from the dedicated schools grant to facilitate a transition to a more sustainable position in the future. While councils are ultimately responsible for their finances, we are open to discussions with any council expressing concerns about its financial situation. We acknowledge the challenges faced by councils, and that's why we have announced a £64 billion funding package to ensure they can continue making a difference, aligning with our concerted efforts to promote equality and level up.”