Local Authorities on the Brink

(Credit: The Guardian)

Local Government in England are now warning of a looming financial cliff edge, with SEND deficits projected to exceed £5 billion by March 2026. Fifteen councils alone are facing deficits of over £100 million, and the removal of the statutory override in March means many could face effective insolvency or be forced to issue Section 114 notices (Source: The Guardian - 13/06/2025).

Local Authorities across England are now sounding the alarm over deepening financial crisis. A recent report from The Guardian [13 June 2025] reveals that Special Educational Needs and Disabilities (SEND) funding shortfalls are pushing councils to the brink. The national SEND deficit is expected to surpass £5 billion by March 2026, with 15 councils facing deficits of more than £100 million each.

“We are heading for a wave of Section 114 notices,” warns one council leader. The removal of the government's statutory override in March 2026 could force many Local Authorities to declare themselves effectively insolvent.

This situation is not isolated. From Croydon to Woking, councils are grappling with rising costs, unsustainable debt, and mounting audit backlogs. The risks of service collapse, asset fire-sales, and emergency government intervention are no longer theoretical, they are imminent.

This crisis isn’t confined to SEND alone. Councils like Croydon are struggling with overall debts nearing £2 billion, prompting government intervention and the appointment of commissioners (Source: The Guardian - 12/06/2025). Across the board, growing deficits, audit backlogs, and service pressures, from potholes to waste collection, are forcing councils to consider drastic cost-cutting, asset sales, and tax hikes.