This week’s budget looks set to be much like Keir Starmer’s government: a cause for genuine optimism – but also a trigger for plenty of anxiety and dread. Hiked business taxes, it seems, will be used to help the NHS. Thanks to Rachel Reeves’s changes to fiscal rules, there will also be a spurt of borrowing to fund infrastructure projects, including the rebuilding of crumbling schools and hospitals. Social housing is to receive a modest boost. But there is a lot of talk about other budgets continuing to be squeezed, not least when it comes to the money that goes from Whitehall to local councils that are already in dire financial straits. And here, we alight on something that the chancellor would do well to remember: the fact that austerity often turns out to be very, very expensive. There is no better example than an issue that is now constantly in the news: how the state provides for children and young people with special educational needs and disabilities, or Send. The mess of misery and stress this encompasses is manifested in families being refused anything like the right provision, and rising numbers of kids who are not in school at all. But inevitably, the current Send crisis is also about cold financial numbers. Last Thursday, the National Audit Office (NAO) published a report on the condition of England’s special needs system. Over the past decade, it said, the so-called high-needs block – which pays for provision and extra support in schools and colleges – has risen by 58%, to £10.7bn a year. Despite this, the Send deficits run up by local authorities may soon reach well over £4bn. At the moment, those overspends have been removed from councils’ balance sheets. They are scheduled to go back on in 2026: the report says that when that happens – and read this slowly – 43% of local authorities in England will be at risk of bankruptcy. As the NAO bluntly says, despite all the extra spending, “the system is still not delivering better outcomes for children and young people”. The whole story suggests a level of dysfunction partly caused by the increasing amount of children who need help, and changes that will not go away: for instance, greater understanding of autism (not least among women and girls, something that was overlooked until very recently) has only increased the financial strain. But the key factor in what has happened should not be forgotten: fundamentally, the Send crisis is the result of 14 years of Conservative government, and the chaos the people in charge let loose. It has affected education throughout the age range. The Sure Start children’s centres that were introduced by the last Labour government were staffed by people who could spot developmental problems early, and offer help – but since George Osborne began slashing the money given to councils to spend on such things, 1,300 have closed, leaving many children’s issues to fester and reach crisis point. Because schools endured real-terms cuts in their budgets while the pay offered to teaching assistants remained miserly, a lot of support in mainstream schools has also fallen away, with similar consequences. The result has been a veritable exodus into specialist schools: the number of children with special needs in mainstream settings fell by a quarter between 2012 and 2019, while the number attending special schools increased by nearly a third. Those schools are now often both oversubscribed and overcrowded. Because places are so scarce, their pupils often have to deal with insanely long daily journeys to and from home, which is the reason for another part of the Send crisis: the fact that councils’ spend on children’s travel costs has rocketed. And because a cash-strapped public sector failed to keep pace with the need for specialist provision, other interests stepped into the breach: the kind of private equity firms that now operate many specialist schools, and charge councils sky-high fees. Such is the self-defeating flipside of Osbornomics: when dependable provision is cut back, or fails to keep pace with need, you end up paying through the nose to fill the gaps. Faced with such a mess, parents have one key means of getting their kids roughly what they need – in theory, at least. Education, health and care plans (or EHCPs) set out provision as a matter of legally enforceable rights, overseen by a dedicated tribunal. Since 2015, the number of children with an EHCP has risen from 240,000 to 576,000. A child who needs a place in a specialist school will usually need one to get in – and in the absence of enough ad hoc, informal help from teaching assistants, plenty of kids in mainstream schools now also have to go down the same route to secure the right support. However, many councils now seem to be set on cutting Send costs by restricting access to this kind of protection. “If unreformed, the SEN system is financially unsustainable,” says the NAO report. Bridget Phillipson, the education secretary, says that it reveals a system “that has been neglected to the point of crisis, with children and families with Send quite simply being failed on every measure”. She has so far promised changes with a mixture of vigour and vagueness, but thinks the current model is “too skewed towards specialist provision and overreliant on EHC plans, often only to the benefit of families who have the resources to fight for support.” A lot of councillors and their officials know what they’d like to see. Their current moves to cut costs by keeping kids in underfunded mainstream schools and restricting EHCPs chime with a push to kill the Send tribunal, and get all those families with clear legal entitlements off their back. A recent document jointly commissioned by the Local Government Association and County Councils Network suggested “a new, independent, nonjudicial mechanism for dealing with disagreements about decision-making”, and insisted that “the state must be clear on where the limits of individual choice and entitlement lie”. This is a classic bureaucrat’s answer – take people’s rights away, get the machine to function at the most basic, self-serving level, and avert your eyes from the human cost. Phillipson’s hint that she believes the Send system is distorted by pushy parents is the sort of argument that would give this position no end of cover. There is an alternative, but it would mean ministers embracing something the Treasury reportedly hates: the idea of spending more in the short term to save money in the future. With special needs provision, that would mean writing off councils’ Send deficits and accepting that giving families legal rights is part of a modern, responsive system, while setting about the kind of deep systemic repairs that would eventually remove the need for constant emergency funding: reviving Sure Start, increasing numbers of school support staff, and creating a lot more capacity – both in mainstream and state specialist schools. Cuts bring costs. Carefully spending money today, by contrast, would deliver tomorrow’s returns and benefits, which is the basic principle of investment. If we can apply it to bricks and mortar and the great god of “infrastructure”, why not to our children? John Harris is a Guardian columnist