Autumn Budget 2025

Baroness Barran Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Barran (Con)]

My Lords, it is a privilege to contribute to this important debate. I will confine my remarks to the Budget announcement on funding for special educational needs and disabilities, in particular how the annual and cumulative deficits historically borne by local authorities will be funded in future when they form part of overall government spending.

As I said in the House yesterday, on this side we want the Government’s SEND reforms to succeed. However, the Government’s announcement has caused considerable anxiety. The expected deficit on the dedicated schools grant is projected to be £6.3 billion in the year 2028-29, with a cumulative deficit of £14 billion by the end of this spending review period. This is not just a one-year problem. The three years of projected deficits beyond the spending review set out in the OBR document total more than £20 billion. I would be grateful if the Minister could confirm that this is correct, assuming no further reform of the system beyond what the Government have already announced but not yet published.

The Government have said clearly that this pressure will not fall on mainstream school budgets. Tom Josephs of the OBR described this to the Treasury Select Committee following the Budget as a very large pressure, estimated at around £6 billion, being shifted from the local authority sector to central government. He highlighted that the Government have not yet set out either how this will be funded or where offsetting savings will come from. In that context, can the Minister explain to parents and to schools where the £6.3 billion for 2028-29 will come from, and the £20 billion-plus for the three years to 2030-31, if it is not coming from the schools budget—and I appreciate that that has been definitively rejected? The phrase I think that has been used by Ministers is that this will be “absorbed across government”. I am tempted to speculate what the noble Lord would have said to me if I had stood at the Dispatch Box and tried to argue that that much money could be absorbed.

Turning to the cumulative £14 billion deficit, can the Minister set out what the Government’s plans are for dealing with this? The Institute for Fiscal Studies, in a recent article, has raised concerns that writing off these deficits could weaken the financial incentives for councils to control SEND spending, and suggests that the recent acceleration we have seen in that spending might indicate that this is already occurring. It is important that the Government set out how they plan to avoid this risk. I would be very grateful if the Minister could address these points when he winds up, but if he runs out of time—and I realise that that is a high probability—I would be very grateful if he could write to me to provide answers.

As I said at the outset, there is a genuine wish to see these SEND reforms. It is an incredibly complex and sensitive area that matters hugely to parents of all children. But if the Government want to build confidence in their reforms and prioritise outcomes for children, as they have so clearly said, they need to give credible answers to these questions.