Bristol City Council is nearing a financial crunch as special needs funding permission ends next March. Rising costs and lack of government action deepen the crisis.
The council leader calls this a “very serious situation” needing more money for children with special needs. The government has not yet responded to this crisis, risking council bankruptcy without government action.
The council committee received a budget update this week, soon to be approved by the full council. The schools budget is £548 million, with £98 million going to special needs education, covering special needs and pupil referral units.
Last year, the government gave extra money that won’t cover the growing needs or past debts. Demand is high across Bristol and the country, making the funding increase insufficient.
The debt might reach £58 million by 2026. The permission, ending next March, lets the council avoid paying it off yearly, making repayment difficult then.
Losing the permission puts the council in danger, a risk shared by other councils. The government knows this is a problem but hasn’t made any formal announcements.
A judge will rule on a past council decision involving a deal about special needs funding and potential illegal consultation with parents. The decision is expected soon.
If the judge rules against the council, the government might take back approximately £27 million, making the debt harder to pay next March as government changes might affect things.
The council still risks running out of money. The bailout cash could help avoid bankruptcy, which some other councils have faced through massive budget cuts, possibly leading to council tax increases. The council creating more special needs places wanting fewer children in expensive private schools by adding 95 places this year and planning even more next year.
Many are asking for the funding permission to be extended. The government, expected to announce a plan, didn’t, leaving many councils facing potential collapse.
Two in five councils could go bust next March, potentially having deficits exceeding their reserves. The special needs system needs urgent and sustainable changes.
A law change a decade ago created this crisis. Councils had to support more kids with special needs but received no extra money while the number of children needing help increased.
The council supports the needs of children, but the problem is the lack of funding. When extra duties arise, funding needs to follow, providing the necessary resources.
