How does the Autumn budget impact on schools and academy trusts?

Changes to SEND deficit arrangements likely to be measure with the greatest long term impact on schools.

On 26^th November 2025, Rachel Reeves delivered Labour’s budget detailing the government’s plans for the economy. Our below article explores the key impacts that the Chancellor’s new budget will have on schools and academy trusts.

SEND cost deficits

The Chancellor announced that the government is planning to pass responsibility for Special Educational Needs and Disabilities (SEND) funding deficits from local authorities to central government from April 2028. This will relieve pressure for local councils who have to date been able to keep SEND deficits off their books under a statutory override which expires in March 2028. However, with a £6.3 billion cost estimate in 2028-2029, the government have yet to announce their identified savings to meet this new financial responsibility.

The Office for Budgetary Responsibility has said that if these additional costs were to be met from the core schools budget, then mainstream funding could fall by 1.7% per pupil, rather than the 2.4% increase that the government had planned.

A shift to central government responsibility for SEND costs is likely to have a significant impact on SEND support in the long term. An optimistic view would be that centralisation may improve the current fragmentation created by SEND funding arrangements, falling as they do between schools and local authorities. However, a more centralised approach may well go hand in hand with a drive to lower spending on SEND support and to water down the current legal obligations to make provisions for need as set out in an EHCP.  

Removing the two-child benefit cap

The previous policy, which was introduced in 2017, restricted parents’ ability to claim universal credit to just their first two children. From April 2026, the government will scrap the two-child limit on Universal Credit, a move expected to lift around 450,000 children out of poverty. This change will provide additional financial support for families which means schools could see a decline in the amount of their pupils who are experiencing financial hardship.

Children’s playgrounds

The government has announced a £18 million investment over the next two years to create or upgrade up to 200 playgrounds across England. While details on locations and whether these will be school-based are yet to be confirmed, the initiative aims to improve access to safe and engaging play spaces for children.

School libraries

A further £5 million will be provided to state-funded secondary schools in 2026-27 to purchase new books in support of the National Year of Reading.

This builds on the government’s £10 million commitment for primary school libraries. Rachel Reeves commented that there are currently 1,700 primary schools which do not have a school library and that she was making this commitment with the objective of ensuring that every primary school in England has a library by 2029. Further details about how this money will be used have yet to be provided.

VAT on private school fees

The VAT that was added to private school fees from 1 January 2025 has been said to raise £40 million more than was expected. The government’s forecast that around 6% of private school pupils are expected to leave the system following the change remains the same.

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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

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