Budget 2025: Major Changes for SEND and Child Poverty

As part of the 2025 Budget, the Chancellor of the Exchequer, Rachel Reeves MP, has today announced two major changes affecting children, families and schools. From 2028-29, the government will centrally fund the full cost of special educational needs and disabilities (SEND) provision, shifting the financial burden away from local authorities.

The two-child limit on benefits will also be lifted. Together, these measures are intended to ease rising school costs and reduce child poverty, but important questions remain about long-term funding, implementation, and support for children.

Local authorities face large and growing budget deficits as they struggle to absorb rapidly rising SEND costs within the Dedicated Schools Grant. In response, the Government has announced that from 2028-29 it will centrally fund the full cost of SEND provision, preventing councils from accumulating further debt. This transfer is expected to cost around £6 billion in 2028-29, rising to an estimated £9 billion by 2030-31. However, ministers have not yet set out how this will be met within the existing Department for Education budget, raising the prospect of increased overall departmental spending.

The Office for Budget Responsibility (OBR) notes that, if the additional cost were met from the core schools budget, it would amount to a 1.7% real-terms fall in mainstream school spending per pupil in 2028-29. Further detail on the government’s wider plans for SEND reform is expected in the upcoming Schools White Paper.

The government has lifted the two-child limit on benefits, meaning families will receive Universal Credit (UC) for a third or subsequent child. This change takes effect in April and is expected to support around 560,000 families in 2029-30, who will see their UC award rise by an average of £5,310 a year. Ministers estimate that this reform will reduce child poverty by around 450,000 children by 2029-30, compared with what would have been expected if the limit had remained in place.

Emma Balchin, NGA Chief Executive, said:
“NGA has consistently called, alongside other sector organisations, for the two-child limit on benefits to be abolished. The link between poverty and educational disadvantage is clear. While today’s announcement is a positive step, much more needs to be done if we are serious about ending child poverty. In one of the world’s richest countries, there is simply no excuse for children growing up without the security and support they need to thrive.
The shift towards centrally funding SEND provision could suggest an ambitious intent for reform, which we welcome. But this must not come at the cost of real-terms per-pupil funding. Schools are already absorbing significant and rising cost pressures; any further squeeze would be unsustainable.
We recognise this has been a difficult budget with competing priorities, and we are realistic about the wider national picture – rising living costs, strain on public services, and tough choices for everyone, including schools. But we cannot afford to get this wrong. As well as a clear moral case, there is a strong economic argument for ensuring our children and young people are equipped to succeed and become the workforce of the future.
Schools are increasingly the fourth emergency service, dealing with complex challenges from mental health to safeguarding. With more than half of governing boards reporting a rising demand for support well beyond education alone, the government must acknowledge the expanded social role schools now play.
We need a long-term, sustainable funding plan – one that recognises the pressures schools face today and anticipates the realities of tomorrow, including declining pupil numbers and their impact on school budgets. Children deserve nothing less.”