NAO: The Government has no clear SEND plan and should consider “whole-system reform” to incentivise mainstream inclusion

by Catriona Moore and Matt Keer

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Another day, another report detailing failings in the system that’s supposed to support children and young people with SEND. Today it’s the National Audit Office laying out the problems and having a go at proposing solutions.

It’s not pretty, but then it never is. The last time the NAO took a detailed look at SEND provision was in September 2019. The conclusion then was that children and young people weren’t being supported effectively and the system wasn’t financially sustainable.

Since then, of course, we’ve had a global pandemic, a SEND green paper, the SEND Improvement Plan, the SEND Change Programme and a change of government. And five years on, the same problems persist. No, that’s not quite fair: they’ve got worse.

What is the National Audit Office?

The NAO is the UK’s independent public spending watchdog. It produces reports for Parliament on government expenditure and assesses whether value for money has been achieved. It also makes recommendations to public bodies on how to improve public services. The purpose of the NAO’s value for money reports, like today’s one on SEND, is to “provide independent and rigorous analysis on the way public money has been spent to achieve government objectives”.

But is there any consensus at all within the Department for Education or the NAO on what value for money actually looks like in provision for children and young people with SEND? (DfE paid the Impower consultancy firm £1.5m to tell them the answer to this back in 2022, but it didn’t reveal anything.)

What does this new report look at?

Today’s report assesses how well England’s current SEND system is delivering for children and young people. It also looks at DfE’s progress in addressing the underlying challenges identified previously.

Part one of the report looks at the support available, the outcomes achieved, the funding available, and DfE’s strategic approach. Part two examines DfE’s actions to “restore confidence” and “create a sustainable system”.

The NAO hasn’t looked at how other bodies, such as health organisations, operate within the SEND system. Neither does it assess the effectiveness of support provided in higher education settings.

What has the NAO found?

• No real improvement: The NAO concludes that there has been no consistent improvement in outcomes for children and young people since 2019. It measures outcomes in terms of academic attainment and post-education employment, but this is hopelessly narrow for the full range of children and young people the SEND system is supposed to support.

• Poor quality: It finds that families “lack confidence” in a system “that often falls short of statutory and quality expectations”. There is of course a direct relationship between this lack of confidence and the failure to put provision in place within the required time-limits. The report highlights the drop in the percentage of EHC plans that are issued within the statutory 20-week limit—down from 60% in 2018, to 50% in 2023—but for some reason, this statutory limit is described as a “target”. (It isn’t a target: it’s a legally enforceable time-limit.) Statutory requirements are set out in Figure 7 in the report, which provides a useful summary of how the system is not currently working as the law requires (or you can check out our SEND Flow charts)

• Over-full special schools: The NAO highlights the extent to which state special schools are over capacity, which it says “may lead to poor value for money”. Not to mention the risk of children being placed in schools that aren’t right for them and can’t meet their needs.

• Design challenges: It observes that “the system design creates challenges”. For example, local authorities are held to account (somewhat) for special educational provision but they have very limited levers to make changes happen in schools and health services. Another example: “Schools can be incentivised to seek EHC plans to access additional high-needs funding, or exclude pupils with SEN, which conflicts with local authorities’ duties to find children school places and ensure value for money.”

The conclusion is that, “if unreformed, the SEN system is financially unsustainable”, a statement that sounds alarming without clarifying what is meant by “reform”. The NAO says that the Government should “explicitly consider whole-system reform” – but what would this look like? Improving integration across services, giving local authorities more levers to make things happen, improving data and making better use of existing resources are all important: but the existing framework of children’s and young people’s rights should remain at the centre of it all.

Safety valve agreements are not the answer

The NAO notes that the Safety Valve programme and the Delivering Better Value programme are not the solution to creating a sustainable SEND system. It also reveals that DfE has undertaken no assessment of the impact of the conditions set out in safety valve agreements on children and young people in the areas affected.

Apparently, “DfE has proposed a qualitative review to assess how the Safety Valve programme will impact outcomes for children”. It’s almost unbelievable that policy-makers have committed £1.2bn of public money and jeopardised the life chances of thousands of children and young people without doing this already.

The graph in Figure 13 of the report shows that the cumulative deficit forecasts for local authorities in the Delivering Better Value programme are rapidly increasing. There is a real risk that this will result in a chain of decision-making that will erode children and young people’s rights.

What does NAO say about DfE?

By far the most interesting aspect of the report is the insight it gives into what’s happening—or, it turns out, not happening—at the Department for Education. It is utterly damning about the DfE’s failure to plan, evaluate evidence, assess risk, or even know what’s going on.

“DfE does not know with confidence how much [school] capacity should be planned, and where, to meet future needs.” [Para 9, Summary]

But this is the job—the actual job—of the DfE and local authorities. If no-one is on top of this, what is the point of public bodies at all?

“DfE has committed to improving the system, undertaking various initiatives, although there is no evidence these will fully address the challenges.” [Para 12, Summary]

Various non-evidence-based initiatives? This sounds very much like wishing for the best and hoping no-one will look too closely.

“DfE does not have a clear plan detailing the specific actions and measurable outputs, budgets and timeframes needed to cost the proposed reforms, prioritise its resources and assess progress.” [Paragraph 1.17]

The SEND Improvement Plan contains 42 commitments, 136 actions (and a partridge in a pear tree) but the NAO says it fails to consider how proposals fit together, how much they cost and how long they would take to make a difference.

“DfE has not made clear what inclusivity could look like and there are limited incentives for schools to be inclusive.” [Para 15, Summary]

This is extremely unfortunate, given that making mainstream schools more inclusive is a cornerstone of government policy on supporting children with SEND – both the previous government and the current one. The specific problems the NAO identifies are that:

• school performance data focus on academic attainment,
• Ofsted doesn’t include a separate judgement on SEN provision in its published reports, and
• there is no specific school funding that focuses on inclusivity.

“DfE and stakeholders see it as critically important to identify and support needs earlier, but DfE does not have a process or funding to facilitate this.” [Para 16, Summary]

“There is currently no system, process or funding to encourage this, nor an assessment of the extent to which this would be value for money.” [Paragraph 2.28]

So it seems that all the things that the DfE is relying on to fix the crisis in SEND provision appear to have their roots in thin air. Despite all the “initiatives”, the NAO says “there remain significant doubts that current actions will resolve the challenges facing the system”. This is a litany of failures.

Matt Keer’s assessment of the financial messages

The NAO has doubled down on its message that the system for supporting children and young people with SEND is not, on current trends, financially sustainable.

Sustainability can be a slippery concept – and it’s worth remembering that nobody seems to be seriously considering whether the harm inflicted on children, young people and their families is sustainable for them.

But this is an auditors’ report, so the NAO situates “sustainability” firmly in the context of whether local authorities can remain financially solvent or not. They note the following:

There are a few other snippets of interest:

Unrelentingly grim

But the main thrust of the NAO report is on deficit finance. The NAO report lays out, in loving detail, what local authority education funding deficits are likely to look like over the next few years.

And the figures are grim. Not as grim as the over-inflated numbers that local government lobbying bodies tossed out earlier this week to pre-empt the NAO report, but still bad.

We estimated recently that the cumulative, combined deficits that councils hold on their key education funding pot—the Dedicated Schools Grant (DSG)—stood at around £2.2 billion at the end of March 2024. It turns out that the DfE agrees with that, because £2.2 billion is the forecast figure that’s also in the NAO report.

Depending on which DfE dataset you trust, the National Audit Office report says that the combined DSG deficit will have grown to either £2.9 billion or £3.3 billion by the end of March 2025. From our own research, we’re plumping for the latter figure.

But the most important figure for the accountants is what they expect the combined DSG deficit to look like at the end of March 2026. Because that’s when an obscure accounting override is due to end. And when (or if) this override ends, it’s likely to create wider financial havoc for councils.

The end of the accounting override

This accounting override has been in place since 2020, and it currently keeps these DSG deficits in a “limbo” state. If or when that override stops, the deficits fall back directly onto council balance sheets, where they are likely to create financial havoc.

According to the NAO, the DfE expects combined councils’ DSG deficits to be somewhere around £4.4 – £4.9 billion at the end of March 2026.

The NAO has reported on the discussions that DfE has had with LAs about what would happen if the DSG deficit override disappears on schedule. DfE has told the NAO that 43% of LAs would be at risk of having to declare a ‘Section 114 notice.’ A Section 114 notice is sometimes described as “a council declaring bankruptcy”, but it’s not quite as simple as that. A few councils have already declared Section 114, for unrelated reasons. It’s bad news in general terms, as it normally requires drastic financial chemotherapy across a range of services.

This is sometimes referred to by Serious, Sensible People as councils “limiting themselves to meeting statutory duties only”. As a SEND parent, carer or educator, you can probably only dream of such a positive outcome. But it would mean trouble—and trouble for people that council leaders genuinely care about.

Longer term, the NAO isn’t convinced that the DfE’s sums add up, noting that, “for 2027-28, there is a gap of approximately £3.4 billion between DfE’s forecast of high-needs [SEND] costs and allocations.”

That might be true. But it’s important to remember that the scenario laid out here is only a potential one. It assumes that the new government is going to do nothing differently to the previous one.

What might the new government do?

We don’t know what—if anything—the new government is going to do differently, but one of the purposes of the NAO’s report is to give them some information to help make decisions.

So what does the NAO recommend on the financial side?

Response from the Local Government and Social Care Ombudsman

“The National Audit Office’s report is a thorough and comprehensive review of the SEN system, its performance and the need for improvement. It highlights the significant financial challenges for local authorities and, most importantly, the impact on children and families when the system falls short.

“As the Ombudsman with jurisdiction over local authority services I see the individual stories of young people whose life chances are permanently affected by a system which is not working for them, their families, schools and councils. Even after many years of involvement in SEN issues, starting my career as a judge in SEND tribunals, I find many of the cases that come across my desk truly distressing.

“As part of the oversight system, alongside the National Audit Office and others, we see the challenges that currently exist and are keen to support improvement at a national level.”

Amerdeep Somal, Local Government and Social Care Ombudsman

Reactions from the SEND sector

“The Disabled Children’s Partnership has been warning Governments about what is now in the NAO report for years. Ultimately, disabled children and their families have been catastrophically failed, with the consequence that we have wasted potential and wasted lives. And this failure has come at a greater cost because delays in support lead to very expensive crisis interventions.

“We welcome the suggestion of cross department working, which was always the intention of the 2014 law and more investment in mainstream schools will make them more inclusive and reduce costly interventions. If reform does take place, it must be done in consultation with parents and it is imperative children don’t lose important legal rights.”

Anna Bird, Chair of the Disabled Children’s Partnership and CEO of Contact

“The National Audit Office is right to conclude that the current SEND system is broken. But it hasn’t acknowledged how spending on children’s education can unlock their future contributions to our economy and society. Their untapped potential is part of the solution to the UK’s growth problems. 

“1 in 5 children in the UK currently have speech and language challenges, many of which are preventable. Without changes to the system, they will be far more likely to fail basic school tests, develop mental health problems and end up unemployed, all of which costs the Exchequer. With some minor upfront investment in teacher training, school-based group programmes and specialist support for some, they can go on to be productive and happy members of our society. Government needs to provide a strong and secure foundation for these children’s futures.” 

Jane Harris, CEO, Speech & Language UK

What is the Department for Education’s response?

“The NAO’s report exposes a system that has been neglected to the point of crisis, with children and families with SEND quite simply being failed on every measure.

“Every child and young person deserves the best life chances and the opportunity to achieve and thrive. But at the moment far too few are being given that chance in a system that is too skewed towards specialist provision and over-reliant on EHC plans – often only to the benefit of families who have the resources to fight for support. 

“I am determined to rebuild families’ confidence in a system so many rely on – so, there will be no more sticking plaster politics and short-termism when it comes to the life chances of some of our most vulnerable children.  The reform families are crying out for will take time, but with a greater focus on mainstream provision and more early intervention, we will deliver the change that is so desperately needed.”

Brudget Philllipson, Secretary of State for Education

Find the report here

Also read:

• SEND audited: Is the system affordable? What’s the alternative?
• SNJ’s 7-point open letter to Bridget Phillipson, new Secretary of State for Education
• The Ofsted changes are bad news for SEND accountability
• How does the the SEND Improvement Plan intend to create more accountability?
• Are new SEND financial accountability measures compatible with lawful SEND provision?
• 10 reasons the Change Programme might fail, by experts from across the SEND sector
• The thorny issue of attendance awards and children with SEND
• What does the #SENDReview Green Paper say about funding the future of SEND?
• The right to a suitable education: what the law says
• How will the SEND Review create sustainable support that’s also value for money?
• Public Accounts Committee Inquiry report adds pressure to #fixSEND. SEND Review MUST NOT delay further (2020)

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Special Needs Jungle was founded in 2008 as a personal SEN blog by Tania Tirraoro. It is now a multi-author, award-winning site covering special needs, disability, mental health and rare conditions in children & young people birth-25 years.

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