Louisa Chaves:
Today, I want to talk about one of the most dynamic and fast-evolving sectors in the education and care space, the special education market. Why is this such an important topic right now? The SEN market is at a critical inflection point, shaped by three powerful forces. The first, surging demand, second, strains on public funding, and third, chronic undersupply of fit-for-purpose provision.
Let's start with demand. There are approximately 1.8 million school-aged children in England with special education needs. Within that group, approximately half a million have an education and health care plan, an EHCP. That's nearly 6% of all pupils, up from around 3% just five years ago. This growth is being driven by rising diagnoses of autism, ADHD, and other conditions, trends that have been accelerated by the impact of the pandemic. This surge in demand is placing significant pressure on public funding. Local authorities have a legal obligation to provide and to fund suitable education for all children, including those with complex SEN. At the same time, parents have the right, and if needed, legally challenge for the school that best meets the needs of their child.
The biggest challenge though is supply. Mainstream schools are struggling to meet the needs of children with EHCPs, particularly those with more complex profiles or behavioral needs. While there are excellent independent providers delivering strong outcomes, the market remains highly fragmented, with long waiting lists and clear signs of latent demand across the country. These dynamics have led to questions around the sustainability of the sector. However, we remain very positive. There are real opportunities to deliver great outcomes for children with SEN, particularly for specialist, high-quality providers. This includes schools, residential services, and increasingly, therapeutic and digital interventions.
At L.E.K., we regularly support both providers and investors in the SEN space. On the provider side, we've helped organizations identify where demand is growing and how best to meet that demand. We've helped providers think about how to evolve their propositions to support a broader cohort of children with SEN. We've helped providers think about strategic adjacencies, such as digital tools for alternative provision, and we've helped providers think about international opportunities in places like the Middle East.
For investors, we offer transaction support. This includes helping buyers think through key diligence issues, such as defensibility of competitive positioning and scalability of business models. So if you're a provider in the space or you're thinking about investing, I'd love to have a conversation with you.
