While demand for support has rocketed, investment has failed to keep pace, leaving councils facing mounting deficits, a report from the public spending watchdog has found.
Demand for education, health and care plans (EHCP) has increased by 140% over the last decade, with 576,000 children with plans in place this year.
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Special Report: Special Educational Needs and Disabilities
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The Big Debate: How can we make SEND support more efficient and effective?
But there has only been a real terms increase in investment of 58% to £10.7bn over the same period.
Considering inflation funding per plan has fallen by a third over the last decade, the NAO's report finds.
In addition, there has been a 14% increase in the number of children with SEN support to 1.14mn children this year, leaving councils facing further extra costs.
According to Department of Education estimates more than two in five councils will have deficits exceeding or close to their reserves by March 2026.
Children are also being failed under the current SEND system, the NAO warns.
Over the last five years “there has been no consistent improvement in outcomes for children and young people with SEN”, it finds.
Just seven in 10 children with SEN at key stage 4 were in education, training or employment, compared with almost nine in 10 of those without.
The NAO also raises concerns that “families and children lack confidence in a SEN system that often falls short of statutory and quality expectations”.
Long waiting times and an adversarial system, which has seen an increase in tribunals taking place following EHCP decisions, are blighting the current SEND system, according to the watchdog.
Lack of spaces at state special schools is also leading to “poor value for money” with demand exceeding places by at least 4,000 pupils, the NAO found.
As a result, councils are commissioning places at independent schools which are “generally more expensive”, costing £61,500 a place, compared with £23,500 for state special schools.
“As such, the current system is not achieving value for money and is unsustainable”, concludes the NAO, which is further concerned that the DfE “does not know with confidence how much capacity should be planned, and where, to meet future needs”.
The NAO says there are doubts that a 2023 plan launched under the previous Conservative government to improve the SEND system “will resolve the challenges facing the system”.
“None of the stakeholders we spoke to believe current plans would be effective,” it warns.
The NAO is calling on the government to “think urgently” about how the current investment of more than £10bn a year “can be better spent”.
More inclusive education, addressing needs at an earlier stage and developing “a whole-system approach” to supporting SEND pupils are solutions the watchdog wants ministers to consider.
This is backed by Association of Directors of Children’s Services president Andy Smith, who says that “we cannot continue to view SEND and education as separate systems”.
“We need to reimagine a truly inclusive single education system which would enable the vast majority of children to be educated in mainstream schools, alongside their peers.
“This will require courage and a major step change, and the government will need to bring parents, schools, and all stakeholders together on this journey, but it is the right thing to do for children.”
According to the County Councils Network, two thirds of county and unitary councils face bankruptcy within two years.
Its SEND spokesperson Kate Foale said: “We have long argued that the SEND system is broken: it does not work for young people, parents, and councils alike.
“Reform is not only necessary, but it is unavoidable, and many of the recommendations put forward by the NAO are what councils have called for, such as incentivising mainstream schools to better support SEND pupils, greater involvement of the health system, and to put local authorities on sustainable financial footing going forward.”
Children’s Commissioner for England Dame Rachel de Souza says the NAO’s findings “will surprise no-one who is familiar with the state of services for children with special educational needs and disabilities”.
“Now is the time for bold leadership with a focus on joining up education, health and care services, to drive better planning and earlier intervention so that fewer children reach crisis point that requires costly acute care,” she added.
“Mainstream schools should be equipped to provide all the core services children need, including those with disabilities, and we need a system that responds to a child's individual needs, instead of one that requires diagnosis to unlock help and support.”
Local Government and Social Care Ombudsman Amerdeep Somal says the NAO’s report is a “thorough and comprehensive review" of the SEND system.
“As the ombudsman with jurisdiction over local authority services I see the individual stories of young people whose life chances are permanently affected by a system which is not working for them, their families, schools and councils.
“Even after many years of involvement in SEN issues, starting my career as a judge in SEND tribunals, I find many of the cases that come across my desk truly distressing.”
Meanwhile, National Day Nurseries Association chief executive Purnima Tanuku welcomed the NAO’s focus on the need for early support for children.
“Money invested early on in children’s lives can make so much more difference than in their later education, so giving financial support to children in early education and care settings must be a priority,” she said.
