School leaders are pressing two Senedd committees for answers about more than £260m in ‘missing’ funding to support pupils with additional learning needs. (ALN)

NAHT Cymru has written to the chairs of the finance and children, young people and education committees as it tries to get to the bottom of what has happened to ‘consequential’ funding received by the Welsh Government from Whitehall.

It says schools desperately need the additional money as they continue to struggle with pressures arising from increasing numbers of children with ALN.

Senedd Research has confirmed that Wales received £322m in 2026/27 alone arising from increased expenditure in England on special educational needs - part of an estimated £550m of consequential funding over three years. It also confirmed that the Welsh Government's first supplementary budget did not allocate any of this funding directly to ALN provision.

An additional £60m investment in ALN was made in the Welsh Government’s second supplementary budget last week following political negotiations.

But NAHT Cymru says that while an improvement, that remains less than one-fifth of the £322m received and comes after the Senedd placed new legal duties on schools around ALN.

At the same time, funding allocated via councils has been stretched by inflation, demographic pressures and social care costs.

NAHT Cymru initially wrote to the Auditor General, who advised that consequential funding is a matter for the Welsh Government and ought to be properly subject to democratic scrutiny through the Senedd and its committees.

In the letter to the two committees, Rob Kelsall, assistant general secretary at NAHT, asks committee chairs Sam Rowlands (finance) and Sera Evans (children, young people and education) for ‘urgent scrutiny’ of the handling of the funding.

He cites findings by Audit Wales from April 2026, ‘which concluded that the Welsh ALN system was under significant strain, faced challenges that threatened its long-term sustainability and lacked sufficiently robust information regarding demand, costs and value for money’.

Mr Kelsall says: ‘School leaders recognise these findings immediately. Across Wales, schools are grappling with increasing levels of need, growing complexity of cases, escalating workload, difficulties accessing specialist support and mounting financial pressures arising from statutory ALN responsibilities’.

He adds: ‘Whilst Barnett consequentials are not formally ring-fenced, the issue is not whether Welsh Government was legally entitled to spend this funding elsewhere. The issue is whether it was right to do so when independent evidence demonstrated that the ALN system was under severe pressure and when schools were warning repeatedly that current funding arrangements were proving unsustainable’.

Mr Kelsall says that school leaders, parents and practitioners would find the decision ‘difficult to understand and even harder to justify’.

‘Ultimately, this is about transparency, accountability and outcomes for children and young people’, he says.

‘The additional funding was generated because of pressures associated with supporting learners with additional needs.

‘Yet only a relatively modest proportion has been invested in addressing those same pressures in Wales.

‘Given the scale of the consequential funding involved, the severity of the challenges facing the ALN system and the vulnerability of the learners concerned, we believe these decisions merit urgent and detailed scrutiny by both committees’.

NAHT’s is calling on the committees to find out why the full allocation was not provided for ALN support, what assessment ministers made of the likely impact on learners with ALN of this decision, whether the findings of Audit Wales were considered and how ministers plan to address them.

NAHT national secretary, Dr Graham Gault, said: “School leaders and parents too often feel they are swimming against the tide in trying to get children with additional needs the support they deserve and they are entitled to answers.

“It appears more than £260m in funding is missing. This is money that is urgently needed by schools to help deliver ALN support and could have made a huge difference to children and families.

“We don’t know what has happened to it, or why it has not been allocated to schools which are under enormous financial pressure right now and constantly being expected to do more with less.

“This inevitably impacts the support they can offer children with ALN at a time when specialist services are also facing real pressures.

“It is just one of the reasons why our members felt they had no alternative but to ballot for industrial action.”

The letter reads as follows:

Sam Rowlands MS Chair, Finance Committee

Sara Evans MS Chair, Children, Young People and Education Committee

Dear Chairs

Urgent Scrutiny of Welsh Government's Use of SEND-Related Barnett Consequentials

I am writing on behalf of NAHT Cymru to request urgent scrutiny of the Welsh Government's handling of the consequential funding received by Wales arising from additional Special Educational Needs and Disabilities (SEND) expenditure in England, and the extent to which this funding has been used to support learners with Additional Learning Needs (ALN) in Wales.

This follows correspondence with Catherine Mealing-Jones, Auditor General for Wales, regarding concerns over the allocation of this funding and whether sufficient consideration has been given to the financial pressures facing the Welsh ALN system.

The Auditor General subsequently confirmed that decisions regarding the allocation of Barnett consequentials are matters for Welsh Government and are therefore properly subject to democratic scrutiny through the Senedd and its committees.

The evidence underpinning such scrutiny is compelling. In April 2026, Audit Wales concluded that the Welsh ALN system was under significant strain, faced challenges that threatened its long-term sustainability and lacked sufficiently robust information regarding demand, costs and value for money.

School leaders recognise these findings immediately. Across Wales, schools are grappling with increasing levels of need, growing complexity of cases, escalating workload, difficulties accessing specialist support and mounting financial pressures arising from statutory ALN responsibilities.

Against this backdrop, Senedd Research has confirmed that Wales received £322 million in revenue consequentials in 2026-27 alone arising from SEND expenditure in England, forming part of an estimated £550 million of consequential funding over three years. It has also confirmed that the Welsh Government's First Supplementary Budget did not allocate any of this funding directly to ALN provision.

Following subsequent political negotiations, the Welsh Government agreed an additional £60 million investment for ALN through the Second Supplementary Budget, including £56 million for schools and local authorities, £1.5 million for sustainability planning and £2.5 million for further education provision.

NAHT Cymru notes this additional investment. However, it is impossible to overlook the scale of the disparity. The £60 million allocated to ALN represents less than one-fifth of the £322 million consequential received by Wales this year. In practical terms, more than £260 million of funding generated by SEND pressures elsewhere in the United Kingdom has not been directed towards supporting learners with Additional Learning Needs in Wales.

This raises serious questions about the Welsh Government's priorities. Whilst Barnett consequentials are not formally ring-fenced, the issue is not whether Welsh Government was legally entitled to spend this funding elsewhere. The issue is whether it was right to do so when independent evidence demonstrated that the ALN system was under severe pressure and when schools were warning repeatedly that current funding arrangements were proving unsustainable.

The Welsh Government was presented with a clear opportunity to invest substantially in support for some of Wales' most vulnerable children and young people. It had before it the findings of Audit Wales, consistent evidence from schools and local authorities, and clear indications that the ALN system required significant additional investment. Despite this, more than 80% of the SEND-related consequential funding has been allocated elsewhere.

For many school leaders, parents and practitioners, that decision will be difficult to understand and even harder to justify. Every day schools are being asked to do more with less. Learners are waiting too long for support. Specialist services remain under pressure. School leaders continue to stretch already depleted budgets to meet growing need. At precisely the moment when substantial additional resources became available as a result of SEND pressures, only a relatively small proportion of those resources found their way into the ALN system itself.

At its heart, this is a question of political priorities. When funding becomes available because of escalating costs associated with supporting children and young people with additional needs, there is a reasonable expectation that a significant proportion of that funding will be used to address equivalent pressures in Wales. Instead, less than 20% has been specifically directed towards ALN provision. Many school leaders will therefore conclude that an opportunity to transform support for vulnerable learners has been missed.

We therefore urge both Committees to examine:

 

• The total value of SEND-related Barnett consequentials received by Wales and the assumptions underpinning those calculations.

 

• Why only £60 million of the £322 million consequential received in 2026-27 has been allocated to ALN provision.

 

• What assessment ministers made of the likely impact on learners with ALN of allocating the majority of this funding elsewhere.

 

• Whether the findings of Audit Wales were expressly considered during the budget-setting process.

 

• What evidence Welsh Government can provide that allocating more than £260 million away from ALN represents the best use of public funds given the documented pressures within the system.

 

• How ministers intend to address the sustainability concerns identified by Audit Wales if the majority of SEND-related consequential funding is not being invested in ALN provision.

 

Ultimately, this is about transparency, accountability and outcomes for children and young people. The additional funding was generated because of pressures associated with supporting learners with additional needs. Yet only a relatively modest proportion has been invested in addressing those same pressures in Wales.

Given the scale of the consequential funding involved, the severity of the challenges facing the ALN system and the vulnerability of the learners concerned, we believe these decisions merit urgent and detailed scrutiny by both Committees. I would welcome the opportunity to provide oral or written evidence should either Committee decide to pursue this matter further.

Yours sincerely, Rob Kelsall, assistant general secretary, NAHT