It’s not easy being Labour: yesterday, there was the very positive news that the government has replicated what was arguably one of New Labour’s most popular and successful policies, Sure Start, with “Best Start”, a major expansion of parenting support hubs to every local authority by April 2026. But this very good policy is already being overshadowed by the outcry against a policy it hasn’t even announced yet: changes to special educational needs and disabilities (Send) provision in schools.
Sure Start was unequivocally a good policy. The Institute for Fiscal Studies estimated that every £1 spent on the policy returned £11 in benefits to the children who attended in improved health, educational attainment and lifelong earnings. It was particularly effective for children from disadvantaged backgrounds. It is a good example of what bodies such as the National Audit Office and the Public Accounts Committee say is the golden characteristic of good public spending: it addressed a problem in advance. A relatively cheap intervention into the parenting of very young children helps reduce their likelihood of needing other state services in future.
Among its fiscal benefits, Sure Start was thought to reduce Send uptake in schools. Following the wholesale eradication of Sure Start centres during the austerity programme implemented by George Osborne, and then the educational crisis caused by the pandemic and lockdown policies, these Send services are now at a very high level of demand, at a cost to the government of more than £10bn a year.
Campaigners fear that the government is considering changes to education, health and care plans (EHCPs), which give families a legal right to support from their local authority. The number of EHCPs is growing quickly, with take-up increasing every year – the number of new EHCPs in 2024 was 15.8 per cent higher than the previous year – and are in place for around 640,000 of the UK’s roughly nine million pupils. The costs have ballooned with them, because in many cases the EHCP requires the council to compensate for the fact that other public services, such as public transport, are not available; councils will be legally required to spend almost £2bn on home-to-school transport (mostly taxis) for Send pupils in the current year, and this will likely only continue to rise.
The government won’t be attempting to put any legislation through on Send provision for some time; a white paper is expected in the autumn. But Labour backbenchers are already briefing against the government – the potential for a new rebellion leads both the Times and Guardian front pages this morning – because they fear that having tried and failed to save £5.5bn from reform to disability benefits, a further attempt is being made to save money from vulnerable children. The government insists it has no plans to remove funding from children or schools, and that the object of the white paper will not be to save money but to fix a broken system.
But this was also the argument the government made for reforming the welfare system, which is transparently not working as it should. However, the reforms became framed as cuts, and the prospect of pushing large numbers of people into poverty turned into a backbencher rebellion. The same MPs are sending a clear message that attempts to save money on Send provision are likely to be rejected in a similar fashion.
This is the trap in which the government is caught: clearly, it needs to spend a lot more on things like Best Start in order to bring down the bill for things like Send provision in future. But it can’t raise the money to do that, because it’s already spending so much money on Send provision now (which is partly the result of Sure Start having been cut). No one wants to pay the upfront cost of Britain being fixed.
Investors from whom the government raises money are increasingly less interested in lending to us. Our long-term borrowing costs are both uncomfortably high and, as we saw last week, sensitive to any whiff of fiscal news. Businesses are increasingly vocal about the amount they are taxed, and hiring appears to have slowed considerably following the rise in employers’ National Insurance in the last Budget. We don’t know yet if claims of a “millionaire exodus” are true, but a simple wealth tax is unproven and would make it much more likely.
Labour backbenchers are right to protest measures about which their constituents are worried. But many of them have already spoken out against other fiscal fixes, such as means testing the winter fuel allowance or ending agricultural property relief. What cuts would they support, then? Which taxes would they raise? After the welfare rebellion, it will be easier for MPs to reject openly anything that sounds like austerity (even if it hasn’t been announced yet). It is much harder to give a credible account of where the money should come from.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: The special needs trap]
Content from our partners
Related
