Increased demand for special needs education has contributed to £71.6m hole in West Sussex County Council’s Dedicated Schools Grant

During a meeting of the cabinet on Tuesday (March 11), members were warned that the overspend would be as high as £131.5m by the end of the financial year.

The grant pays for schools, early years, and pupils with high needs. In 2022, the government implemented a ‘statutory override’, which allowed councils to keep that money off of their books.

But that override is due to end in March 2026 and councils all over the country are facing the colossal task of finding millions upon millions of pounds to cover what could be a catastrophic addition to their budgets.

Experts have predicted an overall shortfall of £5bn nationwide, and concerns are high that some councils may face bankruptcy.

The county council has repeatedly called for clarity from the government on its plans for the grant after March 2026.

Jeremy Hunt, cabinet member for finance, said the council’s commitment to improving services for children with special educational needs and disabilities (SEND) was ‘as strong as ever’. An improvement plan is in place, in partnership with NHS Sussex.

But Mr Hunt said: “This progress comes at a cost – a cost which we have to fund for the future of these young people.

“Unless the government comes up with a solution soon, many well-run local authorities will soon be facing serious financial challenges. And then who will support these young people?

“I urge the government to act before it is too late. Of course, the huge debt is one issue, but they also need to find a solution as to how we reduce the ongoing cost pressures as we go forward.

“That is probably a more challenging question than the one of how we tackle the existing debt.”

In her autumn budget, Chancellor Rachel Reeves announced a £1bn uplift for children and young people with high needs.