Key points
- Croydon council admits £12m SEND overspend in 2025‑26
- Council chief denies any cover‑up of financial shortfall
- Education chief says issues were not hidden from officials
- Admission follows internal audit and external scrutiny
- Council promises tighter monitoring going forward
Croydon (Extra London News) 14 March 2026 – The chief executive of Croydon Council has publicly denied any attempt to cover up a £12 million overspend in its Special Educational Needs and Disabilities (SEND) budget, after details of the shortfall emerged in 2026 and triggered political and public scrutiny.
Speaking at a senior leadership briefing held at the Civic Centre on Thursday, the council’s chief executive, Sarah Smith‑Hayes, stated that “all decisions were open and transparent” and that the overspend arose from a complex mix of rising demand, contractual pressures and “legacy arrangements” that pre‑dated the current administration.
Inside Croydon editor Sarah Amandolaro, who reported the story on 14 March 2026, noted that the council “had been under pressure from parents, education campaigners and opposition councillors” to explain why the authority had projected a £12 million underspend in its SEND figures for 2025‑26, only for the final accounts to show a comparable overspend once revised data was submitted to the Department for Education.
What caused the £12m SEND overspend?
The overspend in Croydon’s SEND budget stems from a combination of rising pupil numbers, spiralling costs in specialist provision and changes in the way schools report data to the council. According to figures cited by Inside Croydon, the original forecast for 2025‑26 had anticipated a modest underspend of £7.5 million, but the final in‑year update to the Department for Education showed an overspend of £12.1 million once revised SEND figures from schools and external providers were incorporated.
Speaking to Inside Croydon, Sarah Amandolaro reported that the council’s finance and education teams had identified “a series of small but cumulative adjustments” across several schools and services, including: higher demand for one‑to‑one specialist staff, additional home‑based tuition packages, and the inclusion of more pupils into the high‑needs block of the national funding formula.
Opposition councillor James Carney, the Labour leader on the opposition benches, told Inside Croydon that the £12 million gap “raises serious questions about planning and oversight,” but he acknowledged that the council’s admission of the overspend “at least shows they are not trying to bury the figures.” Independent education expert Dr Fiona Hood, who was quoted by Inside Croydon, added that “many London boroughs are seeing similar volatility in SEND costs,” pointing to “national under‑funding, a lack of specialist school places, and the impact of post‑pandemic learning losses” as contributing factors.
Did the council try to hide the figures?
At the heart of the story is the council chief’s insistence that there was “no cover‑up” of the £12 million overspend. In her remarks to senior managers and reported by Sarah Amandolaro, Sarah Smith‑Hayes stated that “all relevant officers and members were fully aware of the emerging financial position” and that the council had discussed the issue with the Department for Education and the Education and Skills Funding Agency when the revised figures were submitted.
However, parents and disability‑rights advocates have expressed concern about the timing and transparency of the disclosure. Bentley added that the council had “a duty to communicate these changes more clearly to families whose children are directly affected by placement decisions and service cuts.”
The council’s communications team, speaking to Inside Croydon off the record, acknowledged that “the narrative around SEND funding has been confusing” and that the admission of the overspend had been “an opportunity to reset the conversation” with parents, schools and the wider public.
What role did leadership play in the overspend?
The 2026 reporting highlights the roles of both the council’s chief executive and the education portfolio holder in managing the SEND overspend. Sarah Amandolaro’s article notes that Smith‑Hayes, as chief executive, oversees the council’s corporate performance and financial governance, while the education portfolio holder, Councillor Fiaz Ahmed, is responsible for strategic decisions on schools and high‑needs services.
According to the Inside Croydon report, Ahmed told the journalist that “no single decision caused the £12 million gap,” instead describing it as “the emergent consequence of many small, individual decisions” taken over several months. He pointed to factors such as the council’s policy of “placing children in the most appropriate setting, even where this is more expensive,” and the need to respond to statutory deadlines for Education, Health and Care Plans (EHCPs), which can limit the time available for cost‑effective placement negotiations.
Sarah Amandolaro quoted Ahmed as saying: “We are not apologising for acting in the best interests of children, but we are under no illusion that we need to manage costs more rigorously going forward.”
The article also notes that the council has since initiated a “value‑for‑money review” of SEND placements, with the aim of reducing reliance on high‑cost independent and out‑of‑borough providers wherever possible.
The report further cites a senior council officer, speaking to Inside Croydon on the condition of anonymity, who said that the leadership team had “struggled to balance the pressure from families and schools demanding specialist support with the imperative to keep the authority’s overall budget sustainable.”
How did the data discrepancy emerge?
The revelation of the £12 million overspend followed a routine in‑year update to the Department for Education’s national high‑needs data return. As detailed in the Inside Croydon piece, the original forecast for 2025‑26 had assumed that SEND spending would undershoot by £7.5 million compared with the council’s own baseline projections, reflecting expectations of efficiency gains and better control over placements.
However, when the revised figures were plugged into the national formula, the council’s actual outturn shifted from an anticipated underspend into an overspend of £12.1 million. Sarah Amandolaro reported that this change was driven by “a series of school‑level adjustments” submitted late in the year, including updated figures for EHCP‑related costs, specialist staffing, and the inclusion of previously under‑reported pupils into the high‑needs block.
The council’s finance lead, quoted by Inside Croydon under the name of “a senior finance officer,” explained that the system had originally been designed to “mirror national expectations” about how SEND costs would behave, but that “the reality on the ground diverged sharply.”
Dr Fiona Hood, the independent education expert cited in the article, told Sarah Amandolaro that the discrepancy illustrated “a systemic mismatch between local planning assumptions and national data collection rules.” She argued that councils around the country were “flying partly blind” when it came to forecasting SEND costs, because the national formula did not fully capture the complexity of individual pupil needs or the varying costs of different placements.
What do parents and campaigners say?
The disclosure of the £12 million overspend has prompted a mixed reaction from parents and advocacy groups. Sarah Amandolaro’s report highlights concern among some parents that the council may respond to the financial pressure by tightening eligibility criteria for specialist services or by pushing more children into mainstream placements that are not fully equipped to meet their needs.
Louisa Bentley of the Croydon SEND Parent Carer Forum told Inside Croydon that the council’s statement should be “backed by guarantees that no child will be deprived of essential support because of a budgetary shortfall.”
She added: “If the money was not carefully planned, that is a governance failure, not a reflection of what families and children deserve.”
At the same time, some parents have welcomed the council’s candour. One mother, whose child attends a specialist provision in Croydon, told Sarah Amandolaro anonymously that she appreciated “finally seeing honest figures,” even if they were disturbing.
She said: “We have always known that the costs were going up, but it is reassuring that the authority is not pretending otherwise.”
Campaigners outside Croydon have also weighed in. The national charity Norwood, which supports children and young people with SEND, issued a brief statement reported by Inside Croydon, noting that “the scale of such overspends in individual boroughs underlines the chronic underfunding of the high‑needs system.”
A spokesperson for the charity, quoted in the article, said: “Local authorities are being forced to choose between balancing their books and meeting their statutory duties to vulnerable children.”
How is the council planning to respond?
In the wake of the disclosure, the council has announced a series of measures aimed at tightening financial control over SEND spending while protecting services for children and families. Sarah Smith‑Hayes, in her remarks to Inside Croydon, said the authority would “strengthen its forecasting and monitoring processes” and “challenge assumptions more rigorously” when it came to projecting future SEND costs.
Councillor Fiaz Ahmed told Sarah Amandolaro that the council had “no intention of cutting services for children who need the most help,” but acknowledged that “every pound that is spent must be justified and scrutinised.” He added that the authority would be “seeking additional support from the Department for Education” to address the gap between rising SEND demand and the funding available under the national formula.
The council’s finance committee has also been asked to review the way SEND is presented in future budget papers, with a recommendation that any material change in the authority’s position whether from underspend to overspend should be explained in plain language to councillors and the public. A senior committee officer, quoted by Inside Croydon, said that transparency would be “the key test” of whether the council had truly learned from the £12 million overspend.
What does this mean for governance in Croydon?
The £12 million SEND overspend has become a focal point in an ongoing debate about financial governance at Croydon Council. The authority has faced criticism in recent years for a series of high‑profile financial setbacks, including a section 114 notice in 2020 and a long‑running period of financial recovery overseen by commissioners.
Sarah Amandolaro’s article notes that the current leadership team has sought to present the SEND overspend as a sign of “greater openness” rather than a repeat of previous failures. The council’s corporate director of finance, quoted in the report, emphasised that “all material financial risks are now being escalated earlier and more clearly,” and that the authority had “strengthened its internal controls” since the period of commissioner intervention.
However, critics remain cautious. Opposition councillor James Carney told Inside Croydon that the £12 million gap “will not be forgotten by residents who have seen cuts to other services,” and he warned that the council must demonstrate “tangible improvements” in how it manages volatile budgets such as SEND. The article also quotes a local education campaigner, who asked rhetorically whether the overspend showed that “the recovery plan has anything to offer children with the highest needs.”
Amid these concerns, the council’s leadership has pledged to publish an annual report on SEND spending and outcomes, setting out both financial data and performance indicators such as waiting times for EHCP assessments and the proportion of children placed in appropriate settings. The initiative, described as “a transparency exercise targeted specifically at parents and carers,” is expected to be launched in the 2026‑27 financial year.
