Richmond's Special Educational Needs and Disabilities (SEND) provision is facing a significant financial deficit, projected to reach £10.6 million this year, according to a report presented to the Education and Children's Services Committee.
The deficit is primarily driven by increased costs associated with high-needs education for SEND alternative provision. The Dedicated Schools Grant (DSG) is forecast to overspend by £10.677 million this year, with future deficits projected to reach £11 million by 2026/27. This shortfall could impact funding available for non-education services in future years.
Councillor Julia Cambridge, Chair of the committee, noted the financial pressures. The Department for Education has frozen grant funding for SEND at cash levels, meaning Richmond is receiving the same amount as last year despite an increase in eligible young people requiring EHCPs and SEND support, as well as rising inflation. This has contributed significantly to the £10.7 million figure.
This financial pressure comes amid challenges in implementing national SEND reforms, which have reportedly led to increased parental anxiety and a rise in requests for Education, Health and Care Plans (EHCPs). The national reforms are not widely known or understood by parents, leading to anxiety about the new system of support. This worry is driving parents to apply for more support now by submitting EHCP requests, as they are aware that the government is committed to continuing that support throughout a child's need for an EHCP. This has resulted in an increase in applications from both parents and schools, with parental anxiety also linked to a notable rise in transport requests and appeals, averaging 10 per week.
Managing the number and cost of EHCPs is proving challenging, as there is not currently the level of provision needed to meet all identified needs. The reforms aim to promote more mainstream inclusion, which could lead to more cost-effective options for young people while still meeting their needs. However, the scale of the funding gap is likely to mean this will not solve the funding issue in Richmond in the medium term, and year-on-year overspends are expected.
To address the deficit, Richmond council is developing its SEND Futures Plan, a strategic plan outlining how the local system will evolve to support positive outcomes for children and young people while moving towards a more financially sustainable system. The borough has previously secured £20 million in additional safety valve funding. This has now been replaced by a High Needs Stability Grant. Richmond expects to receive the first instalment of this new grant, estimated at £7 million, upon approval of its Local Area SEND Reform Plan, which was submitted in June 2026. This initial instalment will cover the repayment of general fund monies allocated to the DSG fund over the last five years and 90% of the cumulative high needs deficit as at 31 March 2026. The government has indicated it will take an appropriate and proportionate approach to deficits accumulating during 2026-27 and 2027-28, but this support will not be unlimited. Future financial support through an extended High Needs Stability Grant will be contingent on the successful delivery of the approved Local Area SEND Reform Plan, including the appropriate use of investment to establish an 'Experts at Hand' offer.
The sustainability of high needs education services remains a significant risk to the local authority. The growing funding gap is attributed to an insufficient DSG funding base and annual uplifts failing to meet statutory duties and the increasing number of children requiring additional support.
Public reports pack Thursday 10-Sep-2026 19.00 Education and Childrens Services Committee
