Councils have been sent back to the drawing board after a quango ripped apart their plans to recover massive special educational needs and disabilities (SEND) deficits.

Director of funding at the Education and Skills Funding Agency (ESFA), Kate Josephs, said talks were ongoing with the 32 local authorities that had to submit a plan by July 2019, outlining how they would recover their SEND deficit within three years.

Southwark and Kingston upon Thames LBCs, Bury MBC and North Somerset Council all warned ESFA they would be unable to recover their deficits within three years and instead submitted more realistic five-year plans.

Since the introduction of the Children and Families Act 2014, which extended eligibility for SEND support, councils believe the Government's formula has failed to provide enough funding to meet costs.

Chair of the Local Government Association's children and young people board, Cllr Judith Blake, said: ‘Government funding has simply not kept up with the increased demand.'

Nationally, local authorities have reported a near 50% rise in children and young people with education, health and care plans (EHCP), which state the support a child with SEND can receive.

There are currently 354,000 pupils with EHCPs, an 11% increase since last year alone.

Amid fears of further steep projected increases in the number of EHCPs, councils - including Hampshire CC, Medway, Slough, South Gloucestershire, Torbay and Wokingham councils, Rotherham MBC and Richmond upon Thames and Merton LBCs - are now forecasting ‘significant' increases in their dedicated schools grant (DSG) deficits year-on-year.

In a letter to Bournemouth, Christchurch & Poole Council, seen by The MJ, the ESFA's Owen Jenkins said he had ‘concerns' about the authority's limited savings proposals.

He wrote: ‘With savings that do not extend beyond 2019/20, the plan does appear to lack a long-term, strategic focus and relies heavily on assumed transfers from the schools block to high needs block and continuing additional grant funding.'

Cambridgeshire CC, where special school numbers increased by more than 200 pupils (20%) between January 2017 and January 2019, predicts its deficit will almost double from £7.2m in 2019/20 to £13.8m in 2021/22.

But Mr Jenkins told the council: ‘We do not consider that your plan fully addresses the financial pressures resulting from a significant increase in pupils attending specialist provision.'

The ESFA has said it would support Cumbria CC, which is predicting a ‘steep increase' in the number of EHCPs, to devise a ‘more realistic and strategic' plan than its current one, which forecasts a substantially increasing DSG deficit that reaches £21.4m in 2021/22.

Hillingdon LBC was told its identified savings for 2020/21 and 2021/22 appear to be ‘speculative and unrealistic,' Kensington & Chelsea LBC was criticised for coming up with what was characterised as ‘quick cost-cutting measures rather than a continuous savings plan' and Norfolk CC was told ESFA had ‘concerns regarding whether your savings are realistic and achievable'.

Addressing Wokingham Council, which is facing a rapidly growing number of children and young people diagnosed with SEND alongside a growing population, Mr Jenkins wrote: ‘Overall, we have assessed that your recovery plan does not strategically address the significantly increasing deficit and we have concerns that there is very limited detail regarding either proposed savings or costs that are driving your pressures.'

Last week, in a further blow for council SEND arrangements, Ofsted revealed that around half of the 100 inspections completed had found ‘indications of significant weaknesses'.

Metropolitan districts fared worst, with 61% required to submit a written statement of action while 58% of unitaries outside London and half of all counties inspected were required to do the same.

The Department for Education (DfE) said it was providing £780m of additional high-needs funding in 2020/21, bringing the total amount for supporting those with the most complex needs to more than £7bn.

A DfE spokeswoman said: ‘We have started to meet with local authorities to further develop their plans to bring their deficit into balance and we will continue to visit local authorities to offer support.'