The government has said that the Dedicated Schools Grant Statutory Override, which helps councils manage SEND costs, will stay in place until the end of 2027/28.
This comes as the government launches a consultation into making funding allocations fairer for councils in areas such as social care and SEND, including ensuring councils are properly funded to help support and protect the most vulnerable children.
A bespoke formula to recognise Home to School transport costs will also be introduced.
Paul Whiteman, general secretary at school leaders’ union NAHT, said: "There had been stark warnings that some councils would be at risk of bankruptcy had this money been clawed back next April, so clearly something had to give.
“We had called for these deficits to be written off, which, if combined with investment and significant reform of the broken special educational needs system, would have represented a proper reset - laying the foundations for a system which better matched resources to children’s needs.
“While that call has not been heeded, in the circumstances this is probably the least damaging alternative. However, the fact remains that these deficits cannot be wished away and are simply not sustainable for councils.
“The government’s promised reforms must follow and it’s vital that they are supported by investment for schools and across local services which ensure they can offer pupils with special educational needs the education and level of support they deserve, at the right time and in the right setting.
"If that involves more children being educated in mainstream schools, significant extra funding will be needed for core school budgets.”
Ofsted has announced it will be holding a programme of sector engagement events in September to go alongside the final set of education inspection reforms.
Overstretched children’s social care services has led to an alarming number of children leaving the care system and becoming homeless, not in employment or not in education, according to a report by the Education Committee.
A new report suggests the free schools programme in England has generally had positive impacts on pupil outcomes at secondary, including GCSE and A-Level attainment and secondary school absence.
A new report from the Public Accounts Committee (PAC) finds that the Department for Education (DfE) lacks a coherent plan, suitable targets and sufficient evidence of what works as it seeks to improve teacher recruitment and retention.