DSG High Needs Stability Grants – a welcome boost, but inclusion matters more than ever

Last week’s announcement of the new High Needs Stability grant will bring a sense of relief to many local authorities (LAs). For those who have Dedicated Schools Grant (DSG) deficits linked to high needs, this funding represents a long-awaited boost. 

Under this new approach, local authorities will have 90% of their High Needs deficit (accrued to 2025/26) written off. For many areas, this clarity of their future liabilities is significant – and finally gives some certainty that LAs have been asking for.  

While this grant is, without a doubt, a significant benefit to local authorities, it is not a long-term fix.  In fact, the conditions attached to it highlight why this is the time for local authorities to prioritise real, systematic reform, and to focus on inclusion. 

Having worked alongside local authorities to understand and address the drivers of high needs pressure and acted as delivery partners for the testing of DfE SEND reforms, we know what it takes to develop and deliver a more affordable and inclusive SEND system. Our partnership with the Council for Disabled Children  strengthens our commitment to inclusive, system-wide change . 

A grant with conditions and a message:  

This grant will be allocated in Autumn 2026, but only once the LA has developed an approved local SEND reform plan, demonstrating how they will address SEND spending sustainably in the future.  

This is a clear signal from government: financial relief is available, but it is not limitless. Stability must come from system change, not from short-term fixes, with plans to address how the remaining 10% of deficits will be met, and how ongoing spend will move to a more sustainable position.  

Pressures that remain: 

Even with this grant, the challenges behind high needs overspends remain familiar and require a structural shift:  

• Rising demand for specialist provision 
• Workforce shortages, especially in specialist education services 
• Reactive systems that intervene too late 
• Inconsistent inclusion, which leads to escalating needs and costs 

The High Needs Stability Grant may ease immediate financial pressure, but it does not lessen the urgency for action. Councils will still need to take decisive steps to keep residual deficits as low as possible. For some areas, the remaining 10% will still be a sizeable figure. Crucially, access to this financial relief will depend on councils and their partners co-producing robust, credible SEND reform plans that demonstrate a sustainable, actionable path forward. 

Inclusion must be at the heart of reform:  

Systems that rely on late interventions and high-cost specialist provision rarely stabilise over time.  Demand rises, costs escalate and pressure shifts from one part of the system to another but doesn’t reduce overall. 

When inclusion is well considered, it can change that trajectory. That means:  

• Developing a shared understanding of inclusion locally, co-produced with partners, children, young people and their families 
• Grounding inclusion in the real capacity of schools and services 
• Ensuring there are clear pathways for support 
• Using specialist professionals effectively across a whole area 
• Strengthening alignment between education, health and children’s services 
• Focusing on supporting children early, and where possible, in mainstream settings 

Turning ambition into action: 

Many areas will share the same ambitions:  

• Improve mainstream inclusion 
• Reduce reliance on expensive, specialist placements 
• Strengthen collaboration and relationships across the system 

But the real challenge is how to achieve these ambitions in a way that is deliverable, credible, affordable and owned locally. 

Successful SEND reform plans will be clear about their local context and constraints.  So how can you turn ambition into action?  

• Understanding opportunities and prioritising where to start 
• Being honest about capacity/trade-offs 
• Designing inclusion that is sustainable through multi-disciplinary working and shared ownership 

The High Needs Stability Grant gives local authorities something they haven’t had for a while: space to shape a more sustainable future. But the window is short, and the expectations are high. 

If you’re thinking about how your SEND system can move to longer-term stability, and develop an ambitious local SEND reform plan, we’re here to help. We are running a series of online shared learning events on SEND reform and engagement activities for local authorities in the coming months. Please get in touch to get involved or find out more about how we could support you.