A Nottinghamshire council left with a £30 million deficit in its SEND budget has described government plans to write most of it off as a “massive relief”.
Nottinghamshire County Council had been expecting a £31.1m overspend in its high-needs block by the end of the current 2025/26 financial year, leaving an anticipated £30.3m deficit in its schools reserves.
The authority said last year’s overspending had “exhausted” reserves.
Councils across the country spend a significant and ever-increasing proportion of their money on special educational needs (SEND), and the combined deficits could have reached £14 billion by the end of 2027/28.
This, alongside costs for adult social care, means councils have less cash to spend on other services.
Those in local government say these pressures have contributed to widespread cuts.
Now, the Labour Government has announced its plans to write off 90 per cent of these deficits – around £5 billion – subject to councils providing an improvement plan to make their future spending more sustainable.
Councillor Mick Barton (Ref), the leader of the council, described it as a “massive relief”.
The council’s cabinet member for education and SEND, Cllr Simon Wright, and director of children’s services, Anne Coyle, said: “We welcome the government announcement that 90% of accumulated SEND deficits up to 2025/26 will be written off for councils that submit approved SEND local reform plans.
“We will work closely with the Department for Education to submit the relevant plans once the processes have been announced.
“The county council will continue to work diligently to deliver SEND services fairly and efficiently to meet the needs of children and families in Nottinghamshire with SEND.”
Councils have been allowed to keep spending on high-needs education off their main bank accounts since 2020 to help stop them falling off a financial cliff edge.
The accounting loophole was due to come to an end in April 2026, but the Labour Government announced in June last year that it would be extended to 2028 while it considers further reforms.
Council leaders have long been calling for reforms and a solution, with many fearing their authorities could plunge into bankruptcy should the accounting loophole come to an end.
In Nottingham, while the council is not yet in a deficit position, it said it had been “significantly overspending” due to soaring demand.
Its high-needs reserves were said to have decreased from just over £19 million in 2024/25, before reducing to just £3.1m by 2027/28.
Figures from last year show reserves were then anticipated to fall into a deficit of £4.9m in 2028/29 and further to £13.174m by 2029/30.
The council did not reply to a request for comment by the time of publication.
A Department for Education spokesperson said that every council with a deficit will be able to receive a grant amounting to 90 per cent of its eligible deficit at the end of 2025/26, which is 31 March.
It said it recognises there will be a need for further support with deficits accrued in 2026/27 and 2027/28, the details of which will be confirmed in due course.
Any SEND pressures will then be absorbed within the overall government departmental budgets from 2028/29.
A spokeswoman said: “We’re delivering opportunity for all children, and that means ending the postcode lottery so children with SEND get the right support earlier, when and where they need it.
“To deliver lasting change for families, our reforms must be built on strong foundations, and that’s why we are working in partnership with councils – investing over £5 billion to resolve 90 per cent of the deficits accrued at the end of this year.
“Our Schools White Paper will set out our full plans to bring forward an inclusive education system that enables all children to achieve and thrive, while ensuring financial sustainability for councils.”
