Reform UK targets ‘broken’ system of council funding for special needs

Reform UK is planning to attack the “broken” system of council spending on special educational needs as part of its Elon Musk-inspired cost-cutting initiative, wading into an issue that is already threatening to divide Sir Keir Starmer’s Labour party.

Former party chair Zia Yusuf said the amount of spending by councils on children with special educational needs and disabilities (Send) was a “huge issue”. 

“That conversation does need to be had and Reform local government teams will be making these points,” he told the Financial Times.

Yusuf is the head of the party’s so-called Department of Government Efficiency, which is styled on Musk’s controversial initiative in the US that ultimately failed to find substantial savings.

Nigel Farage’s party has taken control of 10 councils across England after June’s local elections, and has vowed to identify and slash expenditure it views as unnecessary.

Reform’s plans come as the Send bill has soared in recent years, partly because of a growing reliance on outsourcing care to private sector providers. 

Deficits in local authorities’ high-needs budgets were estimated to have hit £3.3bn last year and are set to rise to about £8bn by 2027, according to the Institute for Fiscal Studies.

Its focus on Send is likely to add fuel to a bubbling feud between Starmer’s Labour government and his MPs over planned reforms to the system, which could have echoes of the party’s recent failed attempt to cut the UK’s ballooning welfare budget.

Ministers will present a white paper setting out major reforms to the Send system after the summer, which is expected to include changes to the eligibility criteria that determine which children receive “education, health and care plans” (EHCPs).

These plans give children and families a legal entitlement to a wide array of financial support from their local council, ranging from access to private education to transport services to and from school. 

Reform’s potential involvement in the issue is likely to complicate matters for Starmer, who is already facing accusations by Labour MPs that he is tacking to the right to appeal to potential breakaway voters.

Farage’s party is ahead in the national polls, and is currently projected to be the largest party after the next election. It has said that its management of England’s councils may form a blueprint if it ends up in government later this decade.

Yusuf said the size of the population receiving EHCPs in West Northamptonshire is growing by 11 to 12 per cent a year, a level he said was a “significant liability for taxpayers”.

He added that Reform’s Doge team have been approached by parents who said that three separate taxis arrived in the morning to take their three children with Send to the same school, paid for through the council budget.

The “whole thing is pretty rotten and broken”, he said, adding that “there’s a real sense of learned helplessness because [councils] have absolutely no ability to change any of the legislation”.

Yusuf said Reform’s Doge team plans to run a thorough analysis of councils’ spending on Send, and on adult and children’s social care. 

Because there is no public repository of council spending, Yusuf has been releasing piecemeal information on X, which he says he has garnered from public contracts and so-called whistleblowers — though several have been rebuffed online.

Last month, he claimed that Kent county council had spent £350mn on recruitment services over four years, equating to £87.5mn a year. Critics pointed out the contract was a national framework, which Kent was only a small part of.

He also said he had found examples of councils funding skateboarding and bowling for asylum seekers, which experts pointed out were very small sums paid towards services for children that the council is obliged to care for.

Stuart Hoddinott, associate director at the Institute for Government think-tank, said the Reform Doge team had “zoomed in on weird, small pots of money . . . in a local authority that manages more than £1bn in services a year”, and said that cutting that expenditure would not “make any difference to the sustainability of Kent council”.

He said the party’s focus on social care and Send spending was “identifying structural issues that have beset public services starved of finances for 15 years and are not a result of incompetence and fraud”.

Yusuf said there were 12 volunteers currently running Reform’s Doge, including software engineers, AI specialists and at least one person who previously worked at Uber.

When the unit was first set up in late May, several alumni from the Polaris tech fellowship signed up, but they dropped out last month amid concerns about the running of the project, according to two people briefed on the matter.

“The project of ‘let us go find ways to make these councils run efficiently’ is very appealing to a lot of people, but it only works if you trust that the political project associated with that project is solid,” the person said, adding that “there was a lack of confidence”. 

Nathaniel Fried, the young tech entrepreneur and former head of Reform’s Doge unit — who quit last month at the same time that Yusuf dramatically left the party for 48 hours — has said the main areas of waste he identified were the use of “ancient” IT systems as well as excessive expenditure on management consultants.

When it is fully up and running, Yusuf says Reform’s Doge will aim to do three things. The first is to identify fraud — “or things that are adjacent to fraud” — including councils’ expenditure on consultancy work.

The second is to identify major, costly projects that are ultimately abandoned, or fail to deliver for the public. Thirdly, it will identify specific use cases where tech and AI could transform productivity.

Yusuf added: “It will be a great proving ground for what Reform thinks it can do in national government.”