Demand has outstripped funding: EHC plans rose 140% to 576,000 by 2024 while high-needs funding hit £10.7bn in 2024-25, leaving council deficits the National Audit Office calls unsustainable: about £4.6bn by March 2026.
What the pressure actually is
High-needs funding rose 58% over the decade to £10.7bn in 2024-25, but the number of children with an Education, Health and Care plan rose faster: up 140% to 576,000 between 2015 and 2024, driven mainly by autism, speech and language needs, and social, emotional and mental health needs. The National Audit Office (October 2024) found the system financially unsustainable, with council Dedicated Schools Grant deficits projected to reach about £4.6bn by March 2026 and 43% of councils at risk of effective insolvency.
How it reaches your budget
The system-level deficit is well documented, but the part schools feel is closer to home. For a mainstream school, additional support for a high-needs pupil is funded in two layers. You are expected to meet the first £6,000 of additional support per pupil from your own delegated notional SEN budget (Element 2), on top of core per-pupil funding. The council pays Element 3 top-up only for costs above that £6,000 line.
- Element 2: the first £6,000 per high-needs pupil, which you absorb from your delegated budget, as set out in the DfE's 2026-27 operational guidance.
- Element 3: the council's top-up above £6,000, paid from the same high-needs block that is in structural deficit.
Where it is heading
Current rules give councils some shelter, but the direction of travel is set. The statutory override, which keeps high-needs deficits off councils' main balance sheets, has been extended from March 2026 to March 2028, with the national deficit projected at around £6bn by then. From 2026 the government is offering a High Needs Stability Grant covering 90% of eligible historic deficits as at 31 March 2026, with councils meeting the remaining 10% and any residual deficit from 2028-29, per the DfE explanatory note. The 2026 Schools White Paper and Education for All Bill also propose a statutory Individual Support Plan in every school and a narrower role for EHC plans by 2035, with no changes before September 2030 and current plan holders protected. That is a proposal, not law, so plan on today's rules while you watch the reform.
Where the law comes from
- National Audit Office: Support for children and young people with special educational needs (24 October 2024)
- DfE: The notional SEN budget for mainstream schools, operational guidance 2026 to 2027
- GOV.UK: Explanatory note on the government's approach to Dedicated Schools Grant deficits (9 February 2026)
- Tes: SEND funding, government extends councils' statutory override (2026)
Related
This page is general information, not clinical or legal advice.