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“A High Needs National Funding Formula Would Make Things Even Worse”

In all the noise around school budgets, not much attention has been paid to the high needs funding reforms. Perhaps everyone assumes only special schools will be affected – but the changes could have a big impact on mainstream school funding, so let’s take a look at the current proposals. The DfE’s funding to local […]

Julie Cordiner
by Julie Cordiner
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In all the noise around school budgets, not much attention has been paid to the high needs funding reforms. Perhaps everyone assumes only special schools will be affected – but the changes could have a big impact on mainstream school funding, so let’s take a look at the current proposals.

The DfE’s funding to local authorities for SEND has remained almost static in recent years. It certainly hasn’t kept pace with the increase in needs that’s evident from published statistics. For example:

• The percentage of pupils with SEND attending special schools has risen from 5% in 2012 to 8.5% in 2016

• Top up payments (costs exceeding £10k per pupil) to all types of school increased by 14% between 2013/14 and 2016/17

Last year, 111 out of 150 LAs planned to spend a total of £323m (8.1%) above their high needs allocations. How did they manage this funding shortfall? Simple – they reduced their mainstream budgets for schools and nursery providers.

Limited window

The high needs national funding formula (HNNFF) is about to make this even worse. It will drive funding predominantly by population and current funding levels, with much lower weightings for indicators that directly relate to need – particularly deprivation, health, disability and low attainment. This won’t reflect increases in high cost complex needs.

The DfE’s modelling based on 2016/17 data has shown that 78 authorities could lose funding on the pure formula. Protection will ensure that no LA sees an actual loss, but how will LAs with a funding freeze manage if demand and costs continue to rise? To fund the protection, areas gaining from the HNNFF will be limited to 3% extra per year until the formula is reached, so they may also struggle to meet rising demand.

LAs will have a limited window in 2018/19 to transfer money from school budgets to support SEND pressures, but a majority of schools will have to give consent. From 2019/20, it will be an individual school decision. Given the current school funding situation, this doesn’t sound like much of a solution from anyone’s perspective.

If you have a SEN unit or resource base, changes are afoot. You currently receive £10,000 per place with a top-up per pupil above this. In future, top-ups will stay the same but these pupils will count towards budget share, and per-place funding will reduce to £6,000. This is all very well if the Schools NFF gives you £4,000 or more per pupil. If it doesn’t, you’ll need to subsidise this provision – yet another disincentive to be inclusive. So what does all this mean?

Managing expectations

If the proposals go ahead it will undoubtedly be harder for LAs to manage their high needs budgets, given current trends in needs and costs. Statutory duties and the risk of tribunals will inevitably make LAs focus on those with the highest needs. Mainstream schools will have to work harder to prove they are achieving value for money with their SEND funding before accessing any extra funds.

The DfE has asked all LAs to undertake a high needs review to prepare for the changes. These reviews could involve examining thresholds for specialist placements, the level of inclusion in mainstream schools, and the boundaries between what schools and LAs pay for. Inclusion support, and training for staff in key growth areas such as the autism spectrum, will be crucial.

Schools need to understand how much SEND funding they receive, how it’s being used and the impact it’s having on pupil progress. The latest Ofsted framework requires governors to understand this, and to challenge leaders on it. Managing parental expectations is vital too, focusing on provision and outcomes rather than money spent.

Preparation is vital to avoid being caught out. Take a whole-school approach to find alternative, creative ways of supporting pupils with SEND while improving their progress, and try to release funding from other parts of the budget. No-one can afford to ignore this aspect of the funding reforms.

About the author

Julie Cordiner is an independent education funding specialist, a qualified accountant and the co-founder of School Financial Success, which helps schools and academies secure sustainable budgets. For more information, visit schoolfinancialsuccess.com or follow @JulieCordiner_SFS

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