Parents will be given a personal budget to spend on the care of their children with special educational needs under government proposals that will also replace SEN statements with a new "health and care plan". A Department for Education green paper published on Wednesday will propose that the health and care plans could be contracted out to "the voluntary and community sector" rather than local authorities. The care plans will have a new section detailing children's ambitions for their education. The proposals are expected to give parents more scope to direct the care of their children. At present, SEN budgets are in the hands of schools and local authorities. The green paper is also expected to scrap the three existing tiers of special needs – school action, school action plus and statements – replacing them with two levels. Ministers believe too many children at schools in England are wrongly labelled as having special needs when they may simply have a family problem that makes them fall behind in class. Pilots of the new system will begin in September. It will be introduced nationally next year. Under the plans, schools will also be required to publish a broader range of information on their provision for children with special needs. There will be assessments to monitor how many pupils with special needs are excluded, a concern for families as these children are more likely to be suspended from school. Headteachers cannot be compelled to reinstate excluded children under the education bill currently going through the Commons. Ministers will also encourage parents to set up their own special needs "free schools". Under the last government the number of special schools in England dropped by 7% between 1997 and 2005 as Labour sought to include children with special needs in mainstream schools. David Cameron, whose son Ivan was severely disabled, personally drafted a Conservative manifesto pledge to end the "bias towards the inclusion" of children with special needs in mainstream schools. The government has also encouraged special schools to become academies and the first of these are expected to open next September; 10 have applied so far. The green paper will also look at how to support young people with special needs and disabilities after the age of 16, and at improving diagnosis to identify children with special needs earlier. But teaching unions are concerned that vulnerable children may suffer as councils will have less money to spend on services for schools under government plans to increase the number of academies, which get their funding directly from Whitehall. Dr Mary Bousted, the general secretary of the Association of Teachers and Lecturers, warned that government cuts had already led to specialists being made redundant. "Savage cuts are already being made to many of the specialist services teachers rely on to help them support children with special educational needs. Educational psychologists and speech and language therapists are being made redundant as local authorities cut their funding following budget cuts from government." Bousted said the green paper should "strengthen the role of local authorities and external services so they can better support schools". More than one in five children in England are identified as having SEN – 21% of the school population in January 2010. Only 2.7% have statements. More than half of the pupils, 11.4%, are in the school action category. In recent years the proportion of children with SEN but without statements has nearly doubled, from 10% of all pupils in 1995 to 18.2%, or 1.5 million children, in 2010. In the green paper, the government will call for the roll-out across the country of a pilot project that has cut the proportion of children on the SEN register by 10%. The Achievement for All scheme currently operating in 10 local authorities identifies why children are falling behind and gives them personalised support. In one case at a school in Coventry, a girl whose family life was chaotic was given lifts to school by a teacher. The government is concerned that at present children are wrongly labelled as having SEN, and that teachers' expectations of these children are too low. In one primary school visited by Ofsted, children were identified as having special needs because their fathers were serving in Afghanistan.