{"id":285611,"date":"2025-11-27T05:40:14","date_gmt":"2025-11-27T05:40:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/285611\/"},"modified":"2025-11-27T05:40:14","modified_gmt":"2025-11-27T05:40:14","slug":"government-faces-6bn-shortfall-without-savings","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/285611\/","title":{"rendered":"Government faces \u00a36bn shortfall without savings"},"content":{"rendered":"

More from this theme<\/p>\n

Recent articles<\/p>\n

Government plans to absorb the spiraling cost of SEND provision within central budgets will leave it facing a \u00a36 billion annual shortfall, with no savings yet identified to meet it, the spending watchdog has warned.<\/p>\n

The Office for Budgetary Responsibility said meeting the new pressure from 2028-29 from the core schools budget alone could see mainstream school funding fall by 1.7 per cent per pupil.<\/p>\n

However, the government has not yet set out its plans to reform the system, nor how it will help councils address existing SEND deficits that are due to balloon to \u00a314 billion.<\/p>\n

The government announced earlier this year that the \u201cstatutory override\u201d \u2013 a budgeting mechanism currently allowing councils to set budgets with big high needs deficits \u2013 will end in 2028.<\/a><\/p>\n

Today the Treasury confirmed<\/a> that \u201cfuture funding implications will be managed within the overall government [spending] envelope, such that the government would not expect local authorities to need to fund future special educational needs costs from general funds, once the statutory override ends at the end of 2027-28\u201d.<\/p>\n

It means the future mounting cost pressures of the SEND system will sit on the government\u2019s books, rather than councils. <\/p>\n

Instead of councils continuing to set growing deficits, government would have to put more money into the system to address shortfalls.<\/p>\n

Mainstream funding cut if pressure met from schools budget<\/p>\n

In its Economic and fiscal outlook document<\/a>, published before today\u2019s budget in error but then released properly later on, the OBR said the decision to absorb the spending in central budgets was \u201cestimated to cost \u00a36.3 billion in 2028-29\u201d.<\/p>\n

But \u201cno savings have been identified to offset the estimated \u00a36 billion pressure\u201d moving spending to central government will create.<\/p>\n

The OBR originally reported that if this was fully funded within the Department for Education\u2019s \u00a369 billion core schools budget in 2028-29, \u201cthis would imply a 1.7 per cent real fall in mainstream school spending per pupil rather than the 2.4 per cent increase planned by government\u201d.<\/p>\n

It later corrected this and said the cut would be 4.9 per cent, as opposed to a 0.5 per cent increase.<\/p>\n

The Treasury\u2019s document refers to government budgets overall, not the DfE or core schools budget, and the department reiterated in response to the OBR report that the pressure would be absorbed across government.<\/p>\n

The OBR estimates that, based on current SEND policy, this pressure \u201cis forecast to reach \u00a39 billion by 2030-31\u201d. Overall, local authority SEND spending is due to rise from around \u00a315 billion this year to around \u00a322 billion in 2030-31.<\/p>\n

\"\"<\/p>\n

\u2018Don\u2019t cut school cash\u2019 warn leaders<\/p>\n

Natalie Perera, chief executive of the Education Policy Institute, warned that while there was a \u201cclear and imminent need to address the rising costs of SEND provision, the government must not cut school funding to meet these pressures. <\/p>\n

\u201cSchools are only just emerging from a decade of real-terms cuts and the impact of the covid-19 pandemic. <\/p>\n

\u201cFurther cuts to per-pupil funding risk widening inequalities and compromising schools\u2019 ability to deliver a world-class education, particularly for disadvantaged and vulnerable pupils.\u201d<\/p>\n

And Pepe Di\u2019Iasio, general secretary of the ASCL leaders\u2019 union, said his organisation was \u201cvery concerned\u201d by the warnings of a 1.7 per cent per-pupil funding cut.<\/p>\n

\u201cThis would clearly have a catastrophic impact on educational provision and it is imperative that the government sets out how it intends to address this issue as a matter of urgency.\u201d<\/p>\n

A DfE spokesperson said it was \u201cincorrect\u201d for the OBR to say the pressure may be absorbed by the core schools budget.<\/p>\n

\u201cWe are clear that any deficit will be absorbed within the overall government budget. These projections also do not account for the much-needed SEND reforms this government will bring forward.<\/p>\n

\u201cWe inherited a SEND system on its knees and our changes will make sure children get support at the earliest stage, while bringing about financial sustainability for councils.\u201d<\/p>\n

Government silent on estimated \u00a314bn historic deficits<\/p>\n

The OBR also warned government has not said how it would address the historic deficits being racked up by councils, which could reach \u00a314 billion by the time the override ends in 2028 and pose a \u201csignificant fiscal risk\u201d.<\/p>\n

The DfE is due to publish its proposed SEND reforms in a schools white paper in January. <\/p>\n

The OBR said under the government\u2019s current proposal, councils \u201cwould not build up further DSG deficits from 2028-29\u201d.<\/p>\n

But based on current policy, councils would then be \u201crequired to recognise the historic DSG deficits\u201d on their balance sheets \u2013 when the override expires. The deficits are expected to reach \u00a314 billion by then.\u00a0<\/p>\n

The OBR said: \u201cThis would be very likely to result in many local authorities issuing section 114s\u201d \u2013 effectively declaring bankruptcy \u2013 due to \u201cbeing unable to set a balanced budget. <\/p>\n

\u201cThe fiscal impact of this would depend on how central government and individual LAs respond.\u201d<\/p>\n

The OBR added that government \u201chas not set out how it will address this issue other than to state that its policy position is to work with local authorities to manage their SEND deficits and that it will set out more detail at the provisional Local Government Finance Settlement in December 2025.\u201d<\/p>\n

The OBR said the override has \u201cmasked but not resolved\u201d pressures on SEND spending. <\/p>\n","protected":false},"excerpt":{"rendered":"More from this theme Recent articles Government plans to absorb the spiraling cost of SEND provision within central…\n","protected":false},"author":2,"featured_media":285612,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49,50,24432,51,47,52,48],"class_list":["post-285611","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-send","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/285611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=285611"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/285611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/285612"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=285611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=285611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=285611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}