IFS reports on statutory spending pressures in special educational needs system
The Institute for Fiscal Studies (IFS) has published analysis showing that statutory Education, Health and Care Plans (EHCPs) have created uncontrolled spending growth, with high-needs spending rising 66% from £7.5bn in 2016 to £12bn in 2025. The report identifies that councils face large annual shortfalls because statutory provision requirements exceed central government funding, with accumulated debts forecast to reach £8bn by 2028. The current 'statutory override' accounting treatment, which allows councils to report high-needs deficits separately from main budgets, expires in March 2028. Child disability living allowance spending has doubled from £2bn to over £4bn in the same period, with official forecasts suggesting further growth of £1.8bn over five years without reform. The analysis shows substantial overlap between the two support systems, with 77% of 12-15 year olds with EHCPs also receiving child disability living allowance. The IFS recommends that the Office for Budget Responsibility should produce annual forecasts for high-needs spending and calls for a comprehensive review of support systems, noting the government's commitment to publish a special educational needs White Paper in Autumn 2025.