Britain’s Council Crisis: How A Predatory Network Of Private Taxi Firms Is Siphoning Millions From Special Needs School Transport

As demand for special needs transport soars, councils nationwide are being driven into bankruptcy by taxi firms using unlicensed, and sometimes criminal, drivers to exploit the failing system.

Over the last five years, local councils have been confronted with an explosive rise in the cost of transporting children with Special Educational Needs and Disabilities (SEND), as spending on home-to-school transport nearly doubled from 2019. The pace of this increase has meant that annual SEND transport expenses are projected to hit £3.6 billion by 2030, a level that would be devastating to council budgets already stretched beyond their limits. As a consequence, many local authorities report being forced to divert funds from other essential services to plug gaps in school transport, leading to a renewed risk of widespread regional council bankruptcy. This fiscal crisis has been driven by a convergence of soaring demand, insufficient local infrastructure, and a systemic reliance on costly private transportation services, underpinned by the council’s statutory duty to provide transport to all eligible children, irrespective of cost.

Since 2014, the number of pupils with formal educational support plans, known as EHCPs, has skyrocketed by 140% to over half a million children. Each EHCP requires a child to be provided with appropriately supported educational services, and delivering this often requires council-funded transport. Five years ago, the typical local authority was transporting around 900 such pupils, but today that figure is closer to 1,300, proving exceptionally challenging for rural and county councils with limited specialist schools. In the most extreme cases, where there is a need to accommodate children scattered over a large area, these councils are required to transport nearly 2,500 pupils, at an annual cost of £10,000 per child. Yet urban councils are far from immune, as while their journeys may be shorter, capacity shortages in local special education schools have meant that children still end up travelling far afield to alternative providers.

In Bristol, the council now transports roughly 1,200 children with special needs due to a critical shortage of places at local specialist education providers. This has unsurprisingly resulted in a rapid increase in per-pupil transport costs, with some children having to travel over 50 miles each way to reach an available school. The majority of these journeys are performed by private taxis that ferry a single pupil to distant towns and back daily, with the council legally obligated to entirely fund these trips, no matter how long or costly they become. A single taxi journey for one Bristol student can cost the council £150, with mini-bus trips for multiple students exceeding £1,700 per trip, according to internal budget figures. Many of these students require daily transport, so over a school year, an individual placement can exceed £20,000 in transport fees alone. This huge overspend has resulted in Bristol City Council facing a £63m deficit in its annual school budget, forcing councillors to announce that they would likely declare bankruptcy in the next year, without support.

The situation in Bristol is far from exceptional, with this same funding crisis afflicting local councils across the country. Yet despite the system being clearly unsustainable, any attempt to curb spending has resulted in fierce pushback. In Birmingham, the City Council faced a massive budget shortfall and attempted to undertake a series of cuts to its SEND transport services. The council announced that it would eliminate funded transport for students over 16, and in their place, offered families a bus pass or a personal travel payment to cover alternative arrangements. This attempt, however, was immediately challenged as unlawful and impractical, with the High Court ruling that Birmingham’s blanket cutback failed to meet the council’s legal obligations to ensure suitable transport for those who needed it. The same occurred in Sheffield, where transport costs exceeded projections by around £7 million, pushing total SEND transport spending to £22.7 million for just 2,480 pupils. In order to address this overspend, the council aimed to cut back its direct transport service and replace it with a cash allowance for families who make their own transport arrangements. Once again, this plan was met with resistance, as parents and advocacy groups claimed that the proposed funding levels were far too low to cover the real costs of safe travel for children with complex needs.

Over the last ten years, eligibility for EHCP support plans has expanded, leading to a significant increase in the number of children with special educational needs requiring support. Yet, this rise in demand has followed decades of under-investment in special educational provisions, resulting in a chronic shortage of places in local specialist schools. This structural failure has undoubtedly amplified transport distances and costs, sowing the seeds of this funding crisis. However, it is the system’s heavy reliance on private taxi operators that has been most damaging to council budgets. Unlike other forms of council-funded travel, which are often run in-house or via large contracts, SEND transport tends to be segmented into smaller contracts shared amongst multiple taxi firms, who in turn sub-contract the work to individual drivers. This allows the price of a single taxi journey to multiply into a council invoice for hundreds of pounds, especially in areas where firms are able to charge significant premiums for their scarce services.

These issues are further exacerbated by a host of inefficiencies in how transport services are contracted and managed, with taxi firms in many regions effectively dictating terms to councils that have no alternative providers. For instance, a single taxi provider may be the only bidder for a route, leaving councils in a weak negotiating position from the outset, with no other method of fulfilling their legal obligation to get the EHCP-eligible child to school. In these circumstances, taxi operators will decline to bid on contracts deemed not profitable enough, forcing councils to re-issue the same contract at increasingly higher rates until it is finally accepted. This tactic is particularly prevalent when a previous contract is terminated or expires, as councils are unable to allow the service to lapse, forcing them to hurriedly re-contract the same provider at a premium to maintain continuity for the child. The artificial dynamics of this market have provided a near-perfect opportunity for price gouging and exploitation, allowing private taxi firms to siphon millions of pounds from council budgets for minimal services.

Furthermore, council oversight of contracts remains poor, with widespread inadequacies in monitoring and verifying that paid-for services have actually taken place. Many authorities still rely on manual record-keeping for logging journeys, rather than GPS tracking or integrated routing software, leading to the system effectively running on trust. This has opened the door to fraudulent invoicing, such as in Kent, where an audit of transport invoices found that taxi firms were billing the council for trips to school on days when school attendance records showed that the child was absent. Yet, fabricated trip invoices are likely just the tip of the iceberg, with targeted investigations revealing a whole host of systematic billing irregularities, alongside signs of collusion and bid-rigging among transport suppliers.

Another area of concern stems from councils urgently awarding contracts without performing the necessary due diligence and background checks on drivers being subcontracted for journeys. In one instance, Croydon Council discovered that the rushed re-tendering process following a mid-contract collapse of one provider resulted in companies being awarded routes despite not having proper licences or insurance for their vehicles. Worse still, in Birmingham, it was revealed that one of the largest transport contractors, which had previously been awarded a £20 million contract, failed to obtain proper background checks for its drivers. Consequently, dozens of drivers lacked the required DBS clearances, and 16 individuals were later found to have undisclosed criminal convictions, which should have prevented them from having access to vulnerable children.

Despite the systemic failings within SEND transportation, the current approach of piecemeal local reform won’t be enough to address the surging demand for these services, the lack of suitable regional special education providers, and the current reliance on outsourcing. Nationally, councils are facing a desperate situation where they must choose between drastic cuts to other essential services or face the legal repercussions of failing to provide transportation for all eligible students. With these cost pressures mounting, swift action must be taken to rid the system of the structural flaws that have allowed bad actors and opportunists to commit rampant fraud. Maintaining suitable school transport for children with disabilities is absolutely essential, and should remain one of the core priorities for local councils, however, it's clear that the current system is ineffective and totally unsustainable. It will instead require a concerted effort by the central government, working with councils, to implement a more coordinated approach to SEND funding and management. Simply continuing to kick the can down the road is no longer an option, and if nothing changes, a total collapse of regional councils is inevitable, and far more will suffer as a consequence.