Why changes are needed to SEN funding

The government’s review of school budgets is the ideal opportunity to simplify funding for special educational needs placements, says public sector finance expert Paul Cook

Meeting special educational needs (SEN) is a demanding task for local education authorities (LEAs). So does it make sense that authorities face the challenge of a complex and bewildering SEN financial regime? High quality joined-up SEN provision needs high quality joined-up funding. Unfortunately, the system is anything but coherent. But it is critically important for the funding mix to work so that practitioners can concentrate on meeting children’s needs rather than fighting internal funding battles.

These are not academic finance issues – pressure on SEN budgets mean there is less money to reshape and improve that service. For example, SEN transport costs form a pressure on wider children’s services budgets just at a time when authorities are expected to take a wider role, and be more rigorous in their interventions.

Legally, LEAs must meet all the educational needs of a statemented child – whatever the cost or their budget position – from its share of the £30bn Dedicated Schools Grant (DSG). The government is reviewing the DSG, which could offer the chance to bring together the many strands of SEN funding into a simpler arrangement.

Funding formula

The DSG, introduced in 2006 as the main funding source for education, was meant to end years of argument about whether government funding increases were actually being passed onto schools by local authorities. DSG is paid by government to LEAs, who in turn pay most of that to their schools. Payments to schools are calculated by a locally set funding formula. Additionally, schools have the protection of a minimum funding guarantee.

All this means that the proportion of DSG that LEAs can retain themselves is strictly limited. Unfortunately, it is this retained share of DSG that is used to meet key aspects of SEN. This includes channelling all important extra support to statemented children in mainstream schools. But that retained share is under constant pressure, and can only be increased if local schools consent to the change. It doesn’t seem logical that schools’ SEN funds are so well protected but that central SEN money is not.

Most complex needs

The central share is also expected to cover the cost of placing pupils, many with the most complex needs, in independent special schools. Such placements sometimes cost over £250,000 a year per child, placing considerable financial pressure on some authorities, not least because they do not have enough retained DSG to meet the bill and are obliged to top up with their own funds. Even if they have enough retained DSG, the cost of funding independent provision can squeeze out other options to improve education performance.

The number of these very expensive placements varies greatly between councils. A significant factor in this is the right for parents to appeal to a tribunal to seek the SEN provision they want for their statemented child. In any year some councils have no appeals at all while others face hundreds. This variation reflects not only whether particular councils make bad decisions about how best to meet a child’s needs, but also the force of local pressure groups and the motivation of parents. This can create further pressures for practitioners in the worst affected councils.

Expensive to run

Special schools are expensive to run because they need a very good pupil-teacher ratio and more assistants per class. The law on parental preference, and the inability to change school funding rapidly, mean that empty places must still be paid for.

It probably would not hurt schools too much if government reforms allowed LEAs to top slice their DSG for high-cost SEN provision. After all, if meeting SEN needs is an absolute demand it should have an absolute right to funds.

Perhaps some sort of national pool could be set up to fund high-cost cases, because otherwise it might be hard for some authorities to meet minimum funding guarantees.

Long battle

Parents with children who have very high needs sometimes face a long battle to gain the provision they want. If there were some sort of central pool the process could be streamlined. Not all parents have the financial resources to mount a challenge under the existing system and their child’s education may suffer accordingly.

By taking the sensitivity for these cases out of the local funding equation, LEAs could then concentrate on their wider SEN responsibilities. Is it right that the education of some of our needy children is in danger of becoming a council budget pressure along with car parking? It is something of an indictment against DSG if it does not meet all the high-need SEN costs.

To complicate matters further, the financial contribution of health agencies to SEN provision seems to vary wildly from authority to authority.

Health therapies

In more complex cases, the child’s needs often include health therapies. How health agencies contribute to such costs is a matter for local protocols and negotiation. As might be expected this works very well in some areas, less in others.

Much more significant as an SEN cost for LEAs is transport to and from school. Government doesn’t regard transport as being part of schools’ budgets, and therefore costs must be met from council tax revenue and the government grant to local education authorities (not DSG).

This arrangement is logical for other transport services but less so for SEN. Certainly some SEN pupils are able to use mainstream transport options, but at the higher levels of need, transport provision may be a daily taxi to take one child to and from school. This may include the need for an escort, perhaps with specialised training. The particular special school needed may not be close to hand. With congestion growing, there may be increased individual taxi journeys for pupils as picking up more than one child may lead to unacceptably long travel times.

Good transport seems an inextricable part of SEN provision it may help authorities to make the most of their own special school provision. So again there seems to be a good argument for allowing some of the high cost cases to be funded out of DSG.

Given the importance of meeting special educational needs, it seems right to let education authorities take some of the heat out of the system with a dashing of DSG to meet the cost of high-need SEN provision.

DCSF school funding review

Key points

● The proportion of pupils with a statement of special educational needs varies from council to council, being anywhere between 2% and 4% according to Audit Commission statistics.

● The cost of meeting SEN also varies considerably from one local education authority to another. This is illustrated by averaging out across the total pupil population the amount spent annually on SEN by metropolitan LEAs in 2007. For example, Manchester Council’s SEN spend averaged out at £382 per pupil, whereas in Leeds it is £83 per pupil.

Paul Cook is an independent consultant whose work includes long-term financial modelling for the public sector. He was formerly director of finance at Westminster Council

This article is published in the 5 March edition of Community Care under the headline “SENding a message on school funding”

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