The education secretary has urged parents to rethink how government funding supports children with special educational needs, as school leaders warn that the current system is nearing collapse.

Speaking at the Association of School and College Leaders (ASCL) annual conference in Liverpool, Bridget Phillipson stated that reforms to the 2014 Children and Families Act were necessary to address a failing system that was pushing local authorities toward financial ruin.

“I believe we need to step back from the current system, which stems from the 2014 reforms, and start reimagining what it should look like,” Phillipson said. “Over the coming months, we will engage with parents in discussions about these changes.”

She emphasized the importance of creating a sustainable model that could endure, noting that the current system has failed to do so over the past decade.

Since the 2014 reforms, local authorities in England have been responsible for funding special educational needs and disabilities (SEND) support through their high-needs budgets. However, the rising number of statutory claims for additional support through Education, Health, and Care Plans (EHCPs) has forced councils into financial deficits, which are projected to reach £5 billion.

Earlier this month, The Guardian reported that the government was preparing a white paper aimed at reforming SEND provision. Local authorities have been pushing for greater control over costs, including limiting parents' rights to appeal decisions.

When asked whether these changes would make it more difficult for children to qualify for EHCP support, Phillipson acknowledged parents’ concerns, describing the current system as overly adversarial and stressful for families.

“My goal is to establish a process where children who need extra support receive it much sooner, with early identification and timely intervention,” she explained. “That is a far cry from the system we currently have, which has lost the confidence of parents.”

Phillipson rejected claims that cost-cutting was the main motivation behind the reforms. “My top priority is improving outcomes for children. While financial pressures do exist, they are not the driving force behind these changes,” she stated.

ASCL president Manny Botwe had earlier told conference attendees that schools were struggling to cover SEND-related costs, while a shortage of special school placements had worsened the crisis. “The entire system is on the brink of collapse, and we cannot allow this to continue,” he warned.

During her speech, Phillipson announced a new initiative to explore ways to make mainstream schools more inclusive for SEND students. This follows last year’s allocation of an additional £740 million in capital funding to support necessary adaptations in schools.

She emphasized that fostering greater inclusion is a more effective approach, stating: “Children thinking differently is a gift, and it’s time we recognized that. Some have said inclusion is too difficult, that it can’t be done. Of course, it’s challenging—but it is possible. Many schools and trusts are already succeeding.”

The government’s expert advisory group on inclusion, led by Tom Rees, will oversee the call for evidence to improve integration of SEND students within mainstream education.

Rees highlighted the shared commitment to moving beyond discussions about the system’s flaws and instead implementing practical, evidence-based solutions that build on existing successes.

Daniel Kebede, general secretary of the National Education Union, supported the idea of a more inclusive education system but questioned how it would be funded. “We all want to strengthen parental confidence in SEND provision, but the key question remains: Where is the funding?” he said.