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.”
The Welsh Government has agreed to continue a licensing deal which will give all learners at Welsh state schools free access to Microsoft 365 at school and at home.
Schools will play a greater role in ensuring every pupil has a clear post-16 destination, with a new approach to a guaranteed college or FE provider place available as a safety net being tested.
New data from Ofqual shows that schools and colleges across England are making progress in cyber security training, but are struggling to recover quickly from attacks when they occur.