Headteachers and councillors are to consider setting a budget that would see Hertfordshire schools chalk-up a £50m deficit by the end of the year, reflecting the escalating costs of supporting children with special needs.

According to draft budget proposals, £1.5bn is to be allocated to Hertfordshire schools and other education settings in 2025/26 – of which £207m is ring-fenced for children with special needs.

That £207m – known as the 'high needs' budget or HNB – largely relates to children with Education, Health and Care Plans (EHCPs) in mainstream or special schools.

And it also funds early intervention support, education support centres and hospital education.

But with fears that that £207m will not be enough, plans have been drawn-up to set a budget that could include a £50m deficit – that would be plugged by county council borrowing.

Hertfordshire has already lobbied government for an increase in 'high needs' funding – with the county's allocation reported to be the fourth lowest, per pupil, in the country.

And officials say that a "continuing and rapid" increase in the number of pupils with EHCPs and increasing costs are now making it "increasingly challenging" to control costs.

Executive member for education, libraries and lifelong learning Cllr Caroline Clapper says that without the 'deficit' the council would have to reduce services or special school places.

And she says that reducing services in this "crucial" area is "not an option."

"Hertfordshire receives one of the lowest settlements from government for High Needs provision and despite lobbying for additional funding, our settlement once again this year does not cover the costs of providing the support our children need," said Cllr Clapper, in a statement issued by the county council.

"In 2024, the council saw a 26 per cent increase in requests for EHC plans when compared to 2023 and the cost of supporting these young people continues to outpace funding.

"This leaves the council with the option of either reducing services and specialist school places or accruing a deficit covered by borrowing.

"We are committed to supporting children with special educational needs and disabilities so that every child has the best start in life therefore reducing services in this crucial area is not an option."

Nevertheless Cllr Clapper says that the situation – where she says government effectively allows for these deficits to be ignored for wider financial purposes – is "unsustainable".

And she says the council will continue to call on the government to urgently review and enhance the financial support provided in this area.

According to the council's draft budget proposals, the council will be required to 'cashflow' the deficit – incurring interest costs of around £2.585m during 2025/26.

And, it says, council reserves will need to be held as cover against the deficit.

This year (2024/25) the 'high needs' budget was set with a deficit of £18m – moving the entire county-wide schools budget into an overall deficit of an estimated £15m.

By the end of 2025/26 the council's draft budget document suggests the proposed £50m deficit would lead to an accumulated deficit of around £80m – incurring interest costs of £2.585m during 2025/26..

And it is estimated that that could increase to £384m by March 2029 – which would incur interest costs of around £16m a year.

In the budget document it is suggested that nationwide a very large majority of authorities are also overspending on their 'high needs' budgets.

And it points to a report by the National Audit Office (September 2024) that estimates that cumulative deficits nationally could reach £4.6bn by March 2026.

Members of the Hertfordshire Schools Forum – made up of headteachers and other representatives – will consider plans for an unfunded £50m deficit at a meeting on Wednesday (January 15).

And the decision would then be subject to approval by the county council, as part of their budget setting process.

According to the county council's budget-setting document – known as the Integrated Plan – as local authorities move into deficit on their 'high needs' budgets, they become eligible for intervention from the Department for Education.

And it says that currently around 60 per cent of authorities are in formal intervention programmes, "with varying levels of DfE engagement".

The council's budget proposals will be subject to public consultation and councillor scrutiny, before a budget-setting meeting of the county council which is scheduled for February 25.