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(UK) Councils across England facing bankruptcy over SPED costs

Nov 19, 2023, BBC News: SEND funding brushed under carpet - Cheshire East council leader

NW England

Funding for children with special educational needs and disabilities (SEND) is being "brushed under the carpet", a council leader has said.
Under accountancy rules introduced in 2020 any overspend on SEND has not appeared on councils' budgets.
However, councils still have to fund services and Cheshire East is paying £3m [$3.8M] a year to service borrowing.

The government said it was working on delivering its plans to create a fair SEND system.

Sam Corcoran, the Labour leader of Cheshire East Council, is also a chartered accountant and said government's failure to address SEND deficits risked pushing under-pressure councils over the edge.

Budget deficit

Unlike other areas of council spending that are visible on their budgets, Mr Corcoran said any SEND overspend was effectively off the books.

Referred to as a "negative reserve" Cheshire East Council's SEND deficit stands at £47m [$59M], yet its general reserve is only £14m [$18M], meaning it could not cover it if it needed to.

However, suppliers of SEND services still need to be paid and Mr Corcoran said the local authority was currently paying £3m [$3.8M] a year on interest payments against borrowing.

"The money is being spent," said Mr Corcoran, "but instead of being recorded against the council budgets, it's being put against a negative reserve, hidden, brushed under the carpet - in my view until the next general election."
The accountancy rules introduced in 2020 were due to come to an end in March 2023, but have been extended until 2026.
Birmingham was the 12th council to effectively declare itself bankrupt since 2018, in its case largely due to equal pay claims

As well as a government write-off of the SEND deficit, Mr Corcoran has called for the numbers to be clear on council budgets and for the area to receive greater funding so a balanced budget can be set.

His words are set against a backdrop of many councils coming under increasing financial pressure.

In September, Birmingham became the 12th council to issue a section 114 notice - essentially declaring itself bankrupt - since 2018.

Mr Corcoran said that if it Cheshire East had to pay off its £47m negative reserve it would itself have to issue a section 114 notice.

Although not every council has a SEND overspend, the Local Government Association (LGA) said across the country, the collective deficit stood at an estimated £1.9bn [$2.4B] and could reach £3.6bn [$4.5B] by 2025 if there was no intervention.
"To help alleviate the huge strain they are under, we are calling on the government in next week's Autumn Statement to eliminate councils' high needs deficits, which have arisen as a result of the spiralling costs of providing support outstripping the SEND budgets available to councils," an LGA spokesperson said.

Stephanie Lawley is a manager for Central Cheshire Buddies in Crewe, which provides activities for SEND children.

She said the charity received some council funding, but this had been cut in recent years and it was having to look for other sources.

However, the charity is seeing more demand, including referrals from the council's social care team.

"It has a huge knock-on effect because as services are cut then we need to support more and more families, and more and more families are really struggling - so we get the effect of the cuts," she said.

A spokesperson for the Department of Education said: "Councils are responsible for providing the right support for children in their areas, but we know there is more to do, which is why we are urgently delivering against our plans published earlier this year to create a fairer special educational needs and alternative provision system.

"Our investment in the high need budget has risen by over 60% since 2019-20 to £10.5bn, and we are supporting the local authorities with the highest deficits, including Cheshire East, through our Safety Valve and Delivering Better Value programmes, which help with the development of plans to deliver sustainable SEND systems that work for families."


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