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Government plans to shake up funding for special educational needs and disabilities provision could risk penalising inclusive schools and creating a postcode lottery, education leaders have warned.

The Department for Education is consulting on plans for a local SEND inclusion formula that would give schools more upfront cash but would also raise the threshold for seeking top-up funding.

Currently, schools are expected to find the first £6,000 of the cost of provision for pupils with SEND from their existing core budget, before seeking additional funding from councils’ high-needs pot.

Now the DfE is proposing that councils, working with schools forums, could bid to give more money directly to their schools to support pupils with SEND through core funding.

However, where this was permitted, the threshold for applying for “top-up” funding would also be raised.

Fears over SEND funding

The DfE has not set out what this new threshold might be, but there are fears that raising the amount that schools are expected to spend from their main budget could disadvantage those with higher numbers of pupils with SEND.

The £6,000 cap has been in place for more than 10 years and is referred to as a school’s notional SEND budget. It has not increased with inflation over that period.

Paul Whiteman, general secretary of the NAHT school leaders’ union, said that while he understood what the government was trying to achieve, he was very concerned about “unintended consequences”.

He said: “There is a real risk that increasing the £6,000 threshold will penalise the most inclusive schools and we are very nervous that the additional funding that would potentially go in upfront will not match the amount schools lose out on at a per pupil level.

“Equally, it seems strange to be encouraging divergence in funding arrangements between local authorities at a time when the government is trying to achieve greater national consistency in other areas of SEND policy”.

More funding needed ‘overall’

The government has said that its proposed change could ensure earlier support for pupils and “reduce the number of bids to councils for further funding” from schools. This could drive down demand for education, health and care plans (EHCPs).

But Leora Cruddas, chief executive of the Confederation of School Trusts, warned that more overall funding is needed.

She said: “The £6,000 threshold dates from 2009 and clearly no longer reflects the actual costs faced by schools, so the principle of increasing it and giving mainstream schools more flexibility to support pupils is the right one.

“The major limitation with the particular mechanic, though, is that it is based on transferring from the High Needs Fund - which itself is over-subscribed in most authorities, and with demand still expected to increase further in the short term.

“We need more funding overall so we can build capacity across both specialist and mainstream to build the flexible pupil support the SEND reforms are aiming for.”

Postcode lottery warning

The consultation says that councils could apply to the department to use this freedom to increase core school funding and raise the notional SEND budget. The plan is not to introduce it at a national level.

This has raised concerns that it could create more local variations in terms of how schools are funded and the education pupils receive.

David Clayton, chief executive of Endeavour Learning Trust, which runs 10 academies in the North West, said that allowing different approaches in different local authorities “could unintentionally create greater variation in SEND provision across the country”.

Every child should have access to the support they need regardless of where they live, he said, “so it will be important that any reforms strengthen consistency rather than create a postcode lottery”.

He added that the “key question” will be whether the funding will genuinely reflect the level of need within individual schools.

“We know that demand for SEND support is not evenly distributed. Some schools educate significantly higher proportions of pupils with complex needs than others, and any new system will need to be sophisticated enough to ensure funding follows those children,” he said.

Risks of further pressure on budgets

Tracey Cleverly, trust lead at Learning Academy Partnership, which runs 18 schools in Cornwall and Devon, also raised concerns about schools having sufficient funding,

While welcoming proposals that seek to strengthen inclusive practice, any changes to the funding system “must be backed by sufficient investment”, she warned.

“Simply increasing the threshold before schools can access top-up funding, without ensuring mainstream schools have enough funding to meet those additional costs, risks placing further pressure on budgets,” she said.

This was likely to be felt “most acutely” by smaller schools and those supporting higher numbers of pupils with EHCPs.

Owen Jenkins, CEO of Broad Horizons Education Trust, which runs 18 academies in Norfolk, also warned that introducing new local formulas creates “a practical question about winners and losers”.

He added: “A new local formula will inevitably redistribute funding between schools. The DfE needs to be clear how protections will work, particularly where schools have already built staffing and provision around existing levels of need.

“Schools need confidence that reform will not create sudden funding turbulence while they are still expected to meet the same duties to children.”

A on the plans will run until 18 September.

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