School Moneyby Schools in Reach
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Guide for everyone

Special needs (SEND), high needs funding and the DSG

How support for pupils with special educational needs is paid for, why councils' high needs budgets are in deficit, and what the statutory override and the High Needs Stability Grant mean.

Why special needs matter to every school budget

Support for children with special educational needs and disabilities is the fastest-growing part of school spending. About 5.3% of pupils now have an Education, Health and Care Plan (EHCP), up from just below 3% in the past. A mainstream school is expected to pay the first £6,000 a year of extra support for a pupil from its own budget; the council tops up costs above that from its 'high needs' money. Councils' high needs budgets have run up large deficits, which the Office for Budget Responsibility expects to reach £14 billion by 2028. Since 2019, SEND has taken over half of the increase in school funding. A school with many pupils who need extra support can feel this in its core budget even if it is well run. (IFS 2026 report, pp. 46, 58, 61, 63)

Who pays for what

  • The school pays for support from its own budget up to a point. A mainstream school is expected to pay the first £6,000 a year of extra support for a pupil with special needs.
  • The council tops up costs above £6,000 a year from its high needs budget, and pays for places in special schools.
  • Across England, about 5.3% of pupils now have an Education, Health and Care Plan (EHCP), up from just below 3% in the past.

The Dedicated Schools Grant

Councils receive government funding for schools, early years and high needs through the Dedicated Schools Grant (DSG). It has four blocks: schools, central school services, early years and high needs. The DfE says the vast majority of councils' DSG deficits come from spending on high needs, but in accounting terms there is no separate high needs deficit: the deficit is on the DSG as a whole.

School Money's council pages show each council's DSG balance at the end of each year, from the DfE's section 251 outturn returns. A negative balance is a deficit.

The statutory override and the High Needs Stability Grant

The statutory override is a rule that lets councils hold DSG deficits apart from the rest of their budget. This is how School Money's data notes describe it:

Statutory override: since 2020-21 DSG deficits are held in a separate unusable reserve rather than met from council general funds. The override runs to the end of 2027-28. Under the February 2026 approach, the High Needs Stability Grant pays 90% of each LA's eligible DSG deficit at 31 March 2026 from autumn 2026, so 2026-27 balances will fall sharply.

Independent special school places cost on average over £60,000 a year and take over £2 billion of high needs spending, for only 6% of pupils with EHCPs (IFS 2026 report, p. 59).

Questions to ask

  • How many pupils at the school have an EHCP or need extra support, and how is support above the first £6,000 a year funded?
  • Does the council's top-up money arrive on time and cover what the support actually costs?
  • Is the council's high needs budget in deficit, and could that affect the school's top-ups?
  • What training do staff get in supporting pupils with special needs? The IFS says reform would likely involve building mainstream schools' ability to support pupils with high needs, for instance through more teacher training (IFS 2026 report, p. 61).

What helps

A school with many pupils who need extra support can feel it in its budget even when it is well run. When you see a deficit, look at the school's special needs funding on its page, and at the council's DSG balance, before drawing conclusions. The guide for governors has more questions, and the budget check lets you try out a forecast.

Sources

Last reviewed .