Have we reached a ‘tipping point’ Have we reached a ‘tipping point’? Trends in spending for children and young people with SEND in England Presentation to F40 executive committee 16 January 2019

Aims of the research Quantify the current gap between high needs resources and actual spend, including how the high needs block has been supplemented by other funding sources. 1 Understand what is driving these trends and how local areas are responding. 2 Develop an evidence base to inform discussions between central and local government on meeting the needs of young people with SEND. 3

Methodology for the high needs spending research Phase 1 A baseline review of published data and research on high needs spending and demand Phase 2 Online survey for local authorities on trends in HN spending Phase 3 Detailed work with 9 local authorities to understand pressures and responses in greater detail The findings of the research are based on completed fieldwork in all 9 local authorities and survey returns from 93 local authorities. CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

Published data shows us that demand is rising nationally Number of EHCPs / statement Number of children with EHCP in special school or college The number of children and young people with EHCPs / statements has risen by 35% in 5 years. The number of children and young people educated in special schools and specialist colleges has grown, albeit more slowly, by 24% in the same period. The number of permanent exclusions has increased by two thirds in the last 5 year period for which data is available.

CONFIDENTIAL – NOT FOR ONWARD CIRCULATION The impact on spend is clear: average spend on high needs has increased and high needs block allocations fall short of existing levels of expenditure Total spend against High Needs Block budget £MM, 2015-19 Average spend against High Needs Block budget £000s, 2015-19 CONFIDENTIAL – NOT FOR ONWARD CIRCULATION Based on 93 responses

CONFIDENTIAL – NOT FOR ONWARD CIRCULATION This has meant that local authorities have topped-up the high needs block from other sources Inputs into High Needs Budget £MM, 2015-19 Impact of restrictions to transferring schools block and diminishing reserves CONFIDENTIAL – NOT FOR ONWARD CIRCULATION Based on 93 responses

CONFIDENTIAL – NOT FOR ONWARD CIRCULATION Despite increasing budgets and significant ‘propping up’ of the high needs block the net deficit continues to rise Net position given YoY carry forwards/deficit £MM, 2015-19 Average net position given YoY carry forwards/deficit £000s, 2015-19 CONFIDENTIAL – NOT FOR ONWARD CIRCULATION Based on 93 responses

CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION A slightly different trajectory for F40 local authorities that completed the survey CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

CONFIDENTIAL – NOT FOR ONWARD CIRCULATION If we simply ‘scale up’ these survey results, the national implications are potentially significant Scaled net position given YoY carry forwards/deficit £MM, 2015-19 Average net position given YoY carry forwards/deficit £000s, 2018-19 The scaled net position was arrived at by applying the population scalar (from population size of survey respondents to total population size) to the net position of those who responded to the survey. CONFIDENTIAL – NOT FOR ONWARD CIRCULATION

CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION Percentage ‘high needs deficit’ by region, compared with F40 local authorities Total % deficit/surplus North East -8% North West -9% Yorkshire and the Humber -10% East Midlands -2% West Midlands -7% East of England London -13% South East -6% South West F40 CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

Why has the need to spend on SEND increased? CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

Understanding increasing numbers of children and young people requiring support for SEND Legislative changes Code of practice significantly and rightly raised expectations and aspirations of parents for children with SEND. Currently around 23% of EHCPs (according to our survey) are for children and young people post-16 and this number is rising. This equates to around 17% of expenditure, or £700 m in the survey LAs in 2018-19. Demographic trends School age population growth (c. 5% in 5 years); advances in life-expectancy for children with complex conditions; more awareness and better diagnoses; increasing poverty. The very sharp focus in inspection and through the broader accountability framework on progress 8 and attainment 8 does not incentivise mainstream schools to be inclusive. The shifting of the curriculum away from a vocational offer gives schools less flexibility to offer programmes of study likely to engage those less suited to traditionally academic subjects. Policy decisions that affect inclusion Core funding pressures Staffing cuts in mainstream schools impacting on their ability to cater for children with SEND and other agencies unable to meet their share of costs and/or provide supporting services.

Understanding increased unit costs Upwards drift in terms of placements of children with EHCPs into increasingly costly forms of provision – at a cost of around £200 million over five years. Funding constraints, accountability pressures and curriculum changes in mainstream schools reducing capacity to make good quality provision for children with SEND. More mainstream schools saying that they are unable to meet needs and more parents losing confidence in the ability of the mainstream sector to cater for their children’s SEND. More requests for special provision, leading to special schools becoming full. Need to source additional places in INMSS, coupled with increasing parental preference for INMSS largely supported at tribunal. CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

What are local authorities doing to alleviate the pressure? CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

Seven key areas for local attention Shared ownership of funding issues Creating a partnership with schools and parents which ensures partners understand it is not an ‘LA problem’ and results in collective problem solving. Clarity about what every school should be able to offer children and young people with SEND, based on principles of entitlement and equality, and with reference to what schools are obliged to do by law. Supporting inclusion & holding to account Building confidence of parents Ensuring the quality of provision and promoting local provision. Maintaining sufficient capacity to manage casework efficiently. Developing additional capacity through units or free schools; using capital allocations to refurbish; engaging special schools in a strategic dialogue about meeting need. Maximising capacity of local special sector Sparing and judicious use of INMSS Tight and fair panel process; commissioning discussions with sector; establish placement outcomes and end dates; bring young people back at transitions. Post-16 pathways Pathways between GFE and specialist; routes to independence with employers including use of apprenticeships; challenging some post-16 EHCPs. Working with partners Strategic joint commissioning with health and CSC; section 19 agreements to share costs of complex placements; early help; joint communications. CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

What prevents local authorities from being able to manage down expenditure Around 85% of spend is on places and top-ups which are committed long-term and attached to individual children

How confident are local authorities about the future? CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

What does the future look like in terms of spending? CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION

Questions for national government to consider 1 How can mainstream schools be supported, incentivised and rewarded for maintaining an active and effective approach to inclusion? 2 How can the pressure on the capacity of local maintained special schools be alleviated? 3 How can the financial impact of increasing numbers of high-cost placements in INMSS and out of area provision be addressed? CONFIDENTIAL – COMMERCIAL – NOT FOR ONWARD CIRCULATION