Bournemouth, Christchurch, Political, Poole | Posted on July 8th, 2025 | return to news

BCP Council faces £171m hole in its finances

Due to a debt built up to pay for Special Educational Needs and Disabilities services, the council is close to insolvency.

The provision of Special Educational Needs and Disabilities (SEND) services in the Bournemouth, Christchurch and Poole area is pushing BCP Council towards a financial crisis.

Cllr Millie Earl has written to Angela Rayner MP, Deputy Prime Minister and Secretary of State for the Ministry of Housing, Communities and Local Government, to warn the council faces a £171m hole in its finances due to debt built up from paying for SEND services.

BCP Council is not alone in facing these financial challenges. Demand for SEND services has rapidly increased, outstripping the funding provided by government to pay for it.

More than half of councils had warned they would become insolvent when the system to defer payment to pay for SEND services, the statutory override, was due to end next year.

During last month’s spending review the government announced a two-year extension to the statutory override, which will now run until 31 March 2028.

This mechanism allows councils to effectively ignore the overspend on providing SEND services, but they still need to provide the cash to fund the services being provided, and it does not solve the problem of who will pick up the bill when the override ends.

Despite the extension, Cllr Earl has warned the council faces further financial challenges due to paying interest on SEND debt which risks further cuts to other key services.

Describing the ‘unsustainable pressure’ faced by the council, Cllr Earl’s letter states: “By the end of this financial year, in March 2026, we forecast that the accumulated deficit on the Dedicated Schools Grant (DSG) will reach £171m, which means that we are both technically insolvent, and also facing an ongoing bill of £7.5m each year, just to service the debt.

“This cost is currently charged to the General Fund revenue account and means that we have had to consider further cuts to vital services including environmental services, play provision and support services in our most deprived communities, because this issue has not been resolved.”

For this last six years, the council have had an ongoing deficit in its allocated budget for SEND services. By March 2026, this will have risen to an estimated £171m.

BCP Council is urging the government to change who is responsible for the borrowing costs on SEND spending above the government grant. If accepted, this would help the council address its future funding challenges.

Cllr Earl’s letter explained: “This decision would prevent us from making further damaging cuts to our vital front-line services, at no cost to the government at this time, and would support the council to balance its revenue budgets.”

Details of how the government intends to reform the SEND system are due to be set out in a Schools White Paper in the autumn.

Tags: #bcpcouncil, #insolvency, #specialeducatioinalneedsordisability