Local authorities in London have a £77 million shortfall in funding for pupils with special educational needs and disabilities, new figures reveal.

London Councils, the umbrella group for local government in the capital, warned that authorities faced an “unsustainable level of financial risk” because of shortfalls across SEND and children’s social care.

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According to research commissioned by the group, there has been a “dramatic and sustained rise” in demand for SEND support, driven by a “very rapid increase” in children and young people with education, health and care plans (EHCPs).

The number of pupils with an EHCP has increased by 31 per cent over four years.

While budgets have increased, this has been outstripped by rising demand, leaving London boroughs with an in-year shortfall in 2017-18 of 7 per cent, or £77 million.

However, London Councils' report says this “underestimates the true scale of the pressure in high needs”, because many councils have been holding the overspend within their dedicated schools grant and are “now facing cumulative overspends of many millions”.

More SEND funding needed

In children’s social care, meanwhile, the overspend stands at 9 per cent in 2017-18, or £108 million.

The total shortfall in SEND and children’s social care came to £185 million in 2017-18.

All but one of the councils in London were in deficit on their high-needs expenditure in 2017-18, and all but six were in deficit on their children’s social care expenditure.

London Councils said its research found strong evidence that good quality early intervention services stopped needs from escalating and led to better outcomes for pupils.

Nickie Aiken, London Councils’ executive member for schools and children’s services, said: “London boroughs are committed to early intervention as the most cost-effective approach in the long term with the best results for children and families.

“However, we’re working in a context of fast-rising levels of demand for services while budgets are flatlining, with the result that we’re left to cope with an unsustainable annual funding shortfall of £185 million."

She added: “London faces extremely challenging pressures, but we know local authorities around the country are in similar financial difficulties.

"The government needs to boost investment in children’s services in line with councils’ rising costs. That’s the only way to ensure the sustainability of the high-value, high-impact local services that make such a difference to children’s lives.”

A Department for Education spokesperson said: “Our ambition for children with SEND is the same as for every other child – to achieve well in education, find employment and go on to live happy and fulfilled lives.

“High needs funding for children and young people with the most complex SEND has also been increased, from £5 billion in 2013 to well over £6 billion this year. We also announced in December an additional £250 million up to 2020 - £41.8 million of this funding will go to local authorities in London.

“We know that costs are rising in areas of the country, which is causing challenges for local authorities, and we are aware of the pressures on school budgets more generally, including the increasing costs of making provision for children with more complex needs. We are looking carefully at how much funding for education will be needed in future years, as we approach the next spending review.”