High needs funding reform – what will it mean for LAs and providers? NCCTC 9th July 2017 Claire Dorer - NASS

The context The first part of the consultation launched March 2016 and its follow-up was launched just before Christmas 2017. This second part of the consultation closed on March 22nd. Funding changes will not take effect until 2018- 19. Formula re-affirmed in Queen’s Speech The reforms relate to how LAs are funded for High Needs, not schools – BUT, it will effect the money LAs have to spend on special school placements

Rationale for reform Current high needs spending levels have evolved partly as a result of the variation which the local authority has developed with the schools, colleges and early years settings in its area Isos Partnership undertook research and reported with proposals published in July 2015 DfE concluded that in order to support the improvement of outcomes for children and young people with SEN and those in alternative provision, further changes to high needs funding should be made: a distribution of high needs funding from central to local government that is more formula-driven other improvements to the current funding arrangements at local level.

What changed between parts 1 and 2? DfE has agreed that no LA should lose significant funding in short term as a result of moving to the new formula Those LAs that will gain funding under the formula will only gain at a rate of up to 3% a year DfE decided not to offer EFA place funding to s41 Approved Independent Schools A small a bit of flexibility introduced in the first year of funding changes to allow LAs to move small amounts between the High Needs and Schools blocks £23 million has been given out to LAs to help them plan the strategic organisation of SEND provision more effectively £200 million capital fund available to LAs to expand/develop SEND provision

High needs funding formula design

High needs funding formula factors Support for the principle of the formula in consultation responses but less agreement about the factors themselves The factor looking at living costs will now consider wider labour costs than just teachers’ pay Separate consultations due on both Alternative Provision and Post 16 funding but held up by election

Transition Not certain if original plans will go ahead but commitment made in Queen’s speech to reform school funding. If going ahed for 2017-18 will be rushed! Still plan to include an element of 2016-17 planned spending on SEN and AP in the national formula for at least the next 5 years to give local authorities time to plan and implement changes, and so they don’t have to disrupt current placements and provision. Will set an overall minimum funding guarantee that would not reduce local authorities’ high needs funding by more than a specified percentage in each year (paid for as necessary by capping/damping gains; To help local authorities control their high needs spend

Concerns Good news that no LA loses funding. However, the model assumes that there is no growth in numbers of children with SEND and schools are currently full! Same money going to more children means an effective drop in funding per student LAs gaining funding will be gaining at a very low rate – unlikely to make any of them feel rich! Most LAs see 16-17 funding levels as inadequate Advice to LAs to control spend looks like it is focused on special schools – should be in investing in better support for mainstream

Reviewing and developing high need provision To help local authorities and institutions where adjustments to high needs spending need to be made, DfE proposes: to make available capital funding for the expansion of existing SEN provision – at least £200m available; to promote development of Free Schools to promote collaborative working between local authorities, to achieve more effective commissioning of specialist provision, sharing of services, etc. – bids sought for projects through Social Care Innovation Fund Carry out research into low incidence/complex needs to help institutions ensure they are as efficient as possible.

Concerns Are Free Schools an effective and equitable way to address perceived gaps in provision? Still too much focus on spending on schools – we know from experience that this leads to frantic efforts to reduce spend on highest cost placements Reliance on Social Care Innovation Fund to stimulate cross-regional working: previous projects have shown this is tough to do

What would we like to see? More strategic consideration of low incidence provision – we do not think the Free School route is a credible solution to plug gaps. We raised this in Part 1 but will try again! Consideration of national funding for low-incidence specialist provision – to ensure sustainability of scare national resources. This was called for and rejected in Part 1 but we will explore the low incidence research to see if this gives another opportunity Dedicated initiative to support better SEND commissioning – current practice is patchy. The Innovation Fund is not an adequate response.