Lincolnshire County Council is forecasting a £51 million overspend on its schools budget this year, with rising demand for Special Educational Needs and Disabilities (SEND) support identified as the main cause.
The pressure affects schools across the county, including those serving families in Spalding and South Holland. Council budget papers say more young people than ever are requiring SEND support, while the needs being presented are also becoming more complex.
Why the deficit is growing
The council has been running a deficit on its schools budget since the end of the 2025/26 financial year. It expects the deficit to increase during 2026/27 as demand for high-needs provision continues to grow.
The forecast £51 million overspend sits within the High Needs block of the Dedicated Schools Grant. The council entered a deficit position at the end of 2025/26, leaving a negative reserve balance of £25 million. Officials expect that negative balance to increase further during the current financial year.
Although the figures are substantial, the schools shortfall is ring-fenced. That means it is treated differently from ordinary council spending and cannot force the authority into bankruptcy or lead to a Section 114 notice in the same way as a general-fund financial crisis.
Government support and next steps
The Government announced in February that it would take on the majority of councils’ accumulated SEND-related debts. Under the arrangements outlined in the report, 90 per cent of Lincolnshire’s debt will be taken on by central government.
The remaining risk will still have to be managed through the council’s future financial planning. The Local Government Association has previously warned that eight in 10 councils could face bankruptcy if they were required to repay their SEND debts themselves.
Council leaders are due to discuss Lincolnshire’s position at the Executive meeting on Tuesday, 1 September. The meeting will take place as the authority continues to assess how the growing demand for specialist education support will affect schools funding in future years.
There is a more positive position in the council’s general budget. It is currently expected to finish £100,000 below the level previously predicted, although that does not remove the separate pressure within the ring-fenced schools budget.