End the "SEND Racket": East Riding Lib Dems Welcome Proposed Crackdown on Private Provider Profits.

The East Riding Liberal Democrats have welcomed reports that the government is finally listening to party calls for a profit cap on independent SEND (Special Educational Needs and Disabilities) providers. a move the party has long championed to protect local taxpayers and vulnerable children.

​For years, the market for independent specialist education has been described by campaigners as a "rigged racket." In the East Riding, where the council is under immense pressure to support a growing number of children with complex needs, the cost of these private placements has reached eye-watering levels.

The High Cost of "Cash Cow" Education

​New figures for the 2024/25 cycle highlight the scale of the crisis. There are now approximately 3,900 children in the East Riding with an Education, Health and Care Plan (EHCP). While the council works to keep children in local schools, a lack of capacity means roughly 200 to 270 children are currently placed in independent or non-maintained special schools.

​The financial impact is staggering:

​The East Riding’s High Needs budget has soared to £36.2 million this year.

​Independent placements often cost between £50,000 and over £100,000 per year, per child.

​Projections suggest the budget will need to rise to nearly £40 million next year just to keep pace.

"The lack of accountability in the private SEND sector has allowed private equity to exploit vulnerable children for profit, straining local authority budgets to their limit. While a profit cap is a necessary step to ensure funds prioritize education and care, it doesn't solve the underlying issue: chronic underfunding. “ Cllr Linda Johnson East Riding Liberal Democrats SEND spokesperson.

The "Funding Lottery": Why East Riding is Being Left Behind

​While capping profits is a necessary step to stop the "racket," the East Riding Liberal Democrats warn that it only addresses half the problem. The core of the crisis lies in a broken national funding formula that treats children in East Yorkshire as "worth less" than those in London.

​Currently, the East Riding is the lowest-funded Local Authority in the country for SEND. The disparity is stark:

​East Riding receives approximately £999 in High Needs funding per head.

​Inner-city areas like Newham or Camden receive over £3,000 to £3,900 per head.

​If the East Riding were funded at the same rate as these boroughs—receiving over £1,000 more per child—the council would have an additional £24.6 million to spend on local provision.

​Instead of this fair deal, the East Riding was recently handed a measly 2% increase, far below the national average of 6.2%. This funding gap is the direct cause of the council's mounting debt and the lack of local specialist places for children with profound disabilities.

“If our per-pupil funding matched neighboring boroughs like Newham, who receive over £1,000 more per child, our debt crisis wouldn't be this severe. Capping pay rates is a sensible move, but we must also address the inequitable distribution of resources.” Cllr Linda Johnson East Riding Liberal Democrats SEND spokesperson.

A Message from the Liberal Democrat Front Bench

​Supporting the local call for reform, Munira Wilson MP, Liberal Democrat Education Spokesperson, said:

​"If the Government are going to put these duties on local authorities, funding needs to follow, so that they are properly resourced... Underfunding is a consistent theme in children’s services. We are seeing short-term decisions that ultimately cost the taxpayer more in the long run.” Munira Wilson MP.

​"Children with special educational needs should not be viewed as cash cows for vulture firms. This excessive profiteering is a major driver of the crisis in our SEND system. Some of these companies are making margins of over 20% while families fight to receive basic support. We are demanding a profit cap to stop this exploitation and put funding back where it belongs on the frontline." Munira Wilson MP

Liberal Democrat MP Bobby Dean, has led calls for a Competition and Markets Authority (CMA) investigation into the sector. 

​"It is a scandal that while council finances are on the brink, private equity companies are raking in millions. We need to invest in quality state provision, not allow taxpayer money to be drained by exploitative private placements that cost double the price of a state school." Bobby Dean MP

​Call to Action

​The East Riding Liberal Democrats are calling for a two-pronged attack on this crisis:

​Cap the Profits: Stop private providers from draining the system.

​Fairer Funding: End the postcode lottery that leaves East Riding children at a £1,000-per-head disadvantage compared to London.

​Capping rates of pay for providers is sensible, but without a fair slice of the national pie, our children will continue to be short-changed. It’s time for the government to stop the "make do" attitude and fund East Riding properly.