The government has announced that it will extend the statutory override to keep councils’ spending deficits for special educational needs and disabilities (SEND) off their books for another two years.

And it will start a “phased transition process” to reform the SEND system, according to a consultation document from the Ministry of Housing, Communities and Local Government.

This will include working with local authorities to manage their dedicated school grant (DSG) deficits.

“We will commence a phased transition process which will include working with local authorities to manage their SEND system, including deficits, alongside an extension to the Dedicated Schools Grant Statutory Override until the end of 2027-28,” advises a ministerial foreword by deputy prime minister Angela Rayner and local government secretary Jim McMahon.

More detail will be set out at the provisional Local Government Finance Settlement, ministers said.

Councils’ SEND spending deficits

Helen Hayes, chair of the Commons Education Select Committee, welcomed the announcement for giving certainty to local authorities.

“Ministers will know that this is only a temporary fix until the government brings forward desperately needed, long-term reforms to the SEND system,” she said.

“The government should not delay a permanent resolution to local authorities’ long-term SEND deficits beyond 2028, and it must work to devise a solution that helps councils to achieve long-term financial sustainability and does not damage their finances further.”

At the Spending Review earlier this month, the government said it will set out its approach to SEND reform in a White Paper in the autumn.

Spending Review documents also show that the government will spend £547 million in 2026-27 and £213 million in 2027-28 on reform of the SEND system from its core schools settlement.

The NAHT school leaders’ union had previously called for local authority high-needs deficits to be written off.

General secretary Paul Whiteman said: “While that call has not been heeded, in the circumstances this is probably the least damaging alternative. However, the fact remains that these deficits cannot be wished away and are simply not sustainable for councils.”

He added that the government’s promised SEND reforms must be supported with investment for both schools and local services.

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