The call from the Local Government Association (LGA) followed a report by the Public Accounts Committee which warns a lack of a government plan for under-pressure local authorities to achieve a sustainable financial position is leaving hundreds of councils in a financially precarious position.

Cllr Louise Gittins, chair of the LGA, which represents councils, said: ‘All councils remain under severe financial pressure.

‘We expect Government to provide urgent clarity on how it plans to address high needs deficits, which are projected to rise to £5bn next year, as part of its forthcoming SEND reforms. Over half of councils have warned us they will become insolvent next year when the statutory override flexibility ends and we continue to urge Government to write off these deficits.

‘This needs to be part of a comprehensive SEND reform plan, which focusses on boosting inclusion in mainstream schools, early years settings and colleges, ensuring they have the capacity and expertise to meet the needs of children with SEND.'

The PAC report warns councils' overspending on SEND-related budgets could be between £2.9bn-£3.9bn per year by the end of 2027-28.

The ‘statutory override' on the councils allowing them to exclude these deficits from their main budgets expires in March 2026.

The PAC has asked the Government to develop a fair and appropriate solution for when the override ends and to urgently set out its plans by March 2025.

The Government has indicated it will bring forward plans for SEND reform in a schools' White Paper in autumn 2025.