Tag Archives: High Needs Block

SEND funding switched to schools?

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Has the funding of SEND just become even more complicated for 2026-27? Under the arrangements announced by the DfE, cash has moved from the High Needs Block to other funding streams within the Dedicated Schools Grant.  Dedicated schools grant (DSG): 2026 to 2027 – GOV.UK

Now I am no expert in schools funding, and the labyrinthine calculations employed by the DfE in deciding both the size of the cake and its distribution.  However, it does seem as if all local authorities will see their High Needs Block funding stream reduced in 2026-27 when compared with 2025-26. As seem usual, some London boroughs have been less affected by the change than other upper tier authorities, with 10 of the 20 local authorities with the smallest percentage decrease being London boroughs. There are no London boroughs within the top 20 authorities with the largest percentage reductions, with the highest ranked London borough coming in at 23rd place.

Oxfordshire, where I served as the Cabinet member until May’s elections, has seen a decline of 18.75% in its High Needs block. That decline ranks it in the top 25 local authorities for the largest reductions in their High Needs Block. Hopefully, the cash has been distributed to schools, but the Schools Block for the County has also reduced, by around £5 million – effectively a standstill. No doubt the reduction is due to falling pupil numbers on a formula that is heavily driven by pupil numbers. The implications for schools faced with falling rolls was discussed in my blog post How might a school react to falling rolls? | John Howson

What does the DfE say about the High Needs block changes?

16. As the existing SEND system will continue for 2026 to 2027, the Department’s assessment is that limiting the funding in this way will not necessarily translate into negative impacts on children and young people with SEND and will not mean that we see negative equalities impacts. This is because the requirements on local authorities to secure provision to meet the needs of children and young people with SEND will remain in place, and local authorities must meet these requirements. The consequent budget pressures will therefore lead to accruing DSG deficits rather than having a negative impact on SEND provision.

And 17. We recognise that the size of deficits that some local authorities may accrue while the statutory override is in place may not be manageable with local resources alone, and will bring forward arrangements to assist with them as part of broader SEND reform plans, as explained in the Government’s provisional local government finance settlement document. Given that local authorities will continue to be protected from the adverse impact of those deficits through the so-called “statutory override”, and because we are seeking to protect school level allocations of high needs funding through the conditions of grant attached to the DSG, we do not envisage any adverse impact on those children and young people with protected characteristics, including those with disabilities. The national funding formula for schools and high needs 26-27

Of course, this assumes that the cash channelled through the Schools Block of the DSG is actually spent on SEND by schools, and accounted for as such in academy and MAT budgets. I am sure that will be the case.

Still, those special schools that see the base funding per pupil stuck at £10,000 for another year will no doubt wonder what has happened to inflation accounting.

All we can hope for is that it won’t be too long before the SEND reforms are announced. However, with consultation session running into 2026, it is difficult to see how SEND reforms and local government reorganisation won’t become mixed up together, with who knows what results. Perhaps the new arrangements announced for Surrey might give an indication. Hopefully, the fact that West Northamptonshire has the largest reduction in the High Needs Block of any upper tier authority (25%+) is due to its past history, not its present resourcing.

No High Needs Block data in NFF announcement

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Yesterday, the DfE announced the National Funding Formula (NFF) for 2026/27 The national funding formula for schools The formula covers schools and local authority delivered central services

Unlike last year, there is no section on the High Needs Block that deals with SEND funding. The details will be announced later, at some unspecified time. One other small change seems to be in the calculation of the sparsity index, where the footnote from the 2025/26 NFF document seems to be missing from the main document this year.

Last year, there as a footnote that stated in a footnote on page 26 – paragraphs were not numbered last year – that “6 A compatible school means one of the relevant phases which a pupil could attend. Selective grammar schools are not considered when identifying the second nearest compatible school, but faith schools are included.”

This year, paragraph 25 states that “Eligibility for sparsity funding depends on the distance the pupils living closest to the school would have to travel to their next nearest compatible school, and the average number of pupils per year group.”  However, there is no comment about what is a compatible school.

So, no change, apart from the lack of a definition of a ‘compatible school’. This footnote has now been relocated to the Technical Manual, and appears as footnote 9 on page 19 of the manual. Schools block national funding formula 2026 to 2027: technical note

Overall, the minimum per pupil funding for primary pupils increases from £4955 to £5115, and for secondary pupils up to year 11, from £6,455 to £6,640. Schools

in IDACI band G will, as before, receive no additional funding through that factor. If they don’t qualify for additional funds through other factors, and some schools won’t, as 62.5% of LSOAs are in IDACI Band G, this could be a challenging year for them.

Many of these schools will no doubt turn to parents for support, or perhaps more will follow the north London school, and look to bring in additional income from operating overseas alongside the many private schools that already have overseas campuses?

With the budget next week, and the local government settlement not being announced any earlier than last year, plus the delay in the High Needs Block announcement, this is going to be a tough budget setting time for schools and local authorities between now and February, when the upper tier local authorities responsible for the NFF must set their council budgets.

Perhaps the High Needs block will feature as a rabbit in the Chancellor’s budget speech to make everyone feel better that the government has found a solution to the massive deficits protected by the override that was extended to March 2027.

Reading the document, I was also struck by the fact that there are more references to local authorities than to the ‘schools forum’. Has the latter run its course as a decision-making body? Is it time to review its future, and certainly its membership?  

Funding SEND – is the current system fair?

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The DfE has just published data that sets the context for the expected White Paper, due this autumn. Looking at the data on the High Needs Block that has been the basic building block for the funding of SEND (special needs and disabilities), I can see why there must have been some very intense discussions between the DfE and the Treasury. Section 251: 2025 to 2026 – GOV.UK

The data on individual special school funding only refers to maintained schools where local authorities are responsible for oversight of the budgets. It would be really helpful to see similar ‘cost per place’ data for academy special schools and alternative provision, including Pupil Referral Units, even though they have a different financial year to maintained schools.    

The data for the municipal financial year of 2025-26 for Oxfordshire was set while I was still the cabinet member for Children’s Services, including maintained schools. The data on funding per place for the three maintained special schools in Oxfordshire is illuminating. There is a total of 522 such schools in England listed in the data. The most expensive costs £8.2 million per place, and judging by its website does a great job educating some very challenged young people from the start of their education journey to adulthood.

Now special schools come in many different forms with clearly different funding needs. A school for pupils with hearing loss and no other disability might need less funding per place than a school for non-verbal young people with physical disabilities in addition

The three Oxfordshire maintained schools were placed 74th, 155th and 170th in the list of 522 schools, with funding per place ranging from £840,000 to £1,2 million. Schools with £2,000,000 per place of more were ranked 373 of higher in the list. Does this mean that Oxfordshire is efficient or under-funded compared with some other local areas? I do wonder.

Even allowing for issues such as higher salary costs in London and surrounding areas, the range of cost per place for similar types of school seems worth looking into more closely, and that is where the academy special schools’ data would be useful in order to allow full consideration of cost per place by local government areas.

The current High Needs block distribution formula clearly isn’t working, and I wonder whether equity of funding is an issue for the team putting together the White Paper? How does anyone judge what is fair in funding levels? Wiser heads than mine will know the answer to that question.

Of course, the other key funding issue for SEND, especially outside of the urban areas, is the cost of transport. The Section 251 budget statement for planned expenditure during 2025-26 by Oxfordshire at Line 175092 of the DfE’s spreadsheet suggests expected spending on SEND transport, including for post-16 students of around f£26.4 million. This compares with expected home to school transport costs of just under £21 million for all other pupils entitled to fee transport.

How will the White Paper deal with this cost? Hopefully, it will recognise that such costs should be met by government up to age 18 or even 19 for all such pupils, and not be discretionary beyond age 16. Could a government funded driver scheme for unemployed adults with a driving licence remove the profit element from such expenditure or would the administration costs be more than the saving made by not using private sector firms?

These are not easy issues to grapple with, but starting with some values about the needs of children with SEND would be a good basis for the outcomes in the White Paper. However, as my earlier analysis of Pupil Teacher Ratios demonstrated, funding and values are not common cause in government spending, regardless of the political persuasion of the government in power. Oxford Teacher Services -publications

SEND, fuel duty and the Apprenticeship Levy  

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SEND was identified as one of their 3 top priorities by 60% of a random sample of 100 delegates at the recent Lib Dem Conference. 45% ranked it first and 15% second, often behind funding in general.

This result isn’t a surprise to anyone in education, although falling rolls doesn’t yet seem to have worked its way up the political agenda to be a top priority for councillors and activists. I am sure that will change.

Anyway, as regular readers know, before the summer break I expressed concerns about the SEND deficit many local authorities are facing, only to have the end date for the ‘statutory override’ kicked down the road from March 2026 to March 2028 two days after my blog appeared. I m sure there is no link between the two, just great timing on my part.

So, what might local authorities do. Two suggestions, one possible and one for consideration. Local authorities need to check that they are spending all the Apprenticeship Levy raise by them in its present form. They should not be returning any unspent cash, raised from maintained schools to HM Treasury. Apprenticeships across the SEND landscape can be a good investment, and certainly a better use of the cash than sending it back to Westminster. Hopefully, all local authorities are now making full use of the Levy cash collected.

My second suggestion needs some work. At present, SEND transport is a massive cost to many local authorities. The recent NI hike won’t have helped, and should be recognised in the funding for the High Needs Block. If not, it is a tax on SEND, and indeed education as a whole.

The other tax is Fuel Duty. Unlike VAT, I don’t think it is recoverable by local authorities, despite making up around 50% of the price of fuel at the pump. Assume a taxi does two journeys a day for 190 days a year, and uses a litre of diesel for each journey with a SEND young person. That’s around 380 litres a year. As 400 is an easier number to use, let’s round it up to that number. To compensate, let’s say diesel is £1.30 per litre. This puts the fuel cost at £520 per taxi per year. Ten taxis, £5,200; 100 taxis: £52,000. Now assume 50% fuel duty and the possible saving mount up.

Agriculture has long had a red diesel scheme to cut fuel costs.  Education should not be paying income from the High Needs block back to HM Treasury in tax. Like business rates, a fuel rebate scheme should be in place where local authorities certify fuel purchased, and receive a rebate of the duty.

However, this might incentivise the use of fuel-inefficient vehicles, so the scheme should be predicated on a growing percentage of vehicles being electric, and thus not requiring the rebate. Vehicles could also be required to be less than five years old, and with a minimum miles per litre outcome.

Such a scheme won’t solve the problem, but every little helps, and it might encourage the use of electric taxis that are both cleaner for the environment and, until the government changes the rules, less costly in tax paid by local authorities.

Solve the High Needs Block statutory override issue now

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June is the time of year when local authority Directors of Finance start thinking about the budget for the following April. HM Treasury is doing the same thing for the government but, with a Spending Review just announced, their task this summer should be much easier than usual as Ministers have already negotiated with the Chancellor. Directors of Finance have no such protection and are bound to produce a balanced budget for councillors to approve or face the prospect of having to issue a s114 notice and default, as some councils have already had to do in recent years.

It was very surprising not to see an announcement in the recent Spending Review about the statutory override many upper tier councils are carrying on their balance sheets,

The statutory override on council balance sheets is a result of overspends on council’s High Needs Block spending that finances the pupils and young adults with special educational needs in their local area. (SEND)

There are suggestions that a significant number of upper tier authorities with be unable to present a balanced budget for 2026/27 to councillors next February for approval unless something is done about the present statutory override that currently ends in March 2026. If nothing else is put in place, some councils will not be able to present a balanced budget and hence will default.

The simple answer would be to extend the override until March 2027 to see what the White Paper on SEND, now promised for the autumn, will bring. That move just buys time for a longer-term solution.

I wonder whether the DfE thought local government re-organisation might be a way of dealing with the deficit when new councils were being formed. After the results of May’s elections, I cannot see the present government wanting to push ahead with reorganising councils and creating new elected Mayors if such a move were to hand more victories to their opponents, and notably to the Reform Party. If reorganisation grinds to a halt that route out is no longer available for solving the issue of the override.

Another alternative is to switch the 2% precept on Council Tax from adult social services to SEND and let the NHS take the strain on funding for the mostly elderly residents currently being paid for out of the local government funding 2% precept. Such a move would not be popular but could be possible. As it wasn’t in the Spending Review it seems unlikely.

The DfE could rearrange their spending and transfer the consequences of falling pupil numbers from the Schools Block to increase the High Needs Block and do the same for the Early Years funding to keep it constant on a per child basis but recognise fewer children means less total spending. Such a move would affect funding for schools and early years setting with falling rolls.

Do nothing and councillors in Parties running councils will return from their summer breaks to be confronted with a list of serious reductions in services and personnel that might be needed in 2026. Such reductions won’t be efficiency gains, but unacceptable cuts on the level of a fire sale.

Solving the problem of the statutory override between now and the parliamentary recess for the summer should be the number one priority for all involved with education and local government. Not to do so would have consequences that are unthinkable.

The situation regarding the statutory override should not have reached the present position. In my view, it would be a gigantic failure of political will if it is not solved now.

More thoughts on funding schools, ahead of the spending Review

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Yesterday, I published a post about my initial thoughts on the forthcoming spending review, due next week, and how saving might be made in the education sector.  For a more detailed analysis at the macro level there is also the Institute for Fiscal Studies review Schools and colleges in the 2025 Spending Review | Institute for Fiscal Studies that lays out the options for the government against the background of falling rolls and the challenging economic situation, and now The Defence Review, and all that entails for government spending priorities.

My guess is that the government will direct any extra funding in education to skills and the college sector, especially where it is related to spending on training for employment, and let the schools sector sort out its own future. One exception to this general thesis is SEND, where the government will have to take some action. Sadly, without yet a Report from the Select Committee that has been looking at SEND for the past sixth months.

The nuclear option on spending open to the government, and one that local authorities might have used in the past when they controlled the financing of the schools’ sector, would be to top slice the Schools Block and transfer that funding to the High Needs Block, used to fund special needs, and leave the schools sector to sort out the consequences.

Afterall, education is low down in the polling pecking order for national elections. This also makes sense with the supposed reorganisation of local authorities making the issue of the SEND balances and off-balance sheet deficits being carried by local authorities more of a challenge to fund in the future. However, my bet is that local government reorganisation will be off the agenda while Reform is riding high in the opinion polls. As a result, a top slice this year could be an option.

The Secretary of State has also solved the issue of how to deal with the underachievement of poor White families, by setting up an inquiry. In my view that approach is just kicking the can down the road to avoid taking difficult decisions in the Spending Review. Everyone in education knows the issues, and probably the answers as well: bring back Sure Start or something like it for the under-5s, and focus on making the secondary school curriculum more meaningful for those pupils not heading for higher education at eighteen, and who will probably leave school for college at sixteen.

The Spending Review also needs to come clean on what the pledge around the 6,500 extra teachers means, and how they will be paid for? The IFS makes the point that the college sector needs more than 6,500 extra lecturers to cope with the fact that rolls there won’t be falling over the next few years, and any added working in adult learning will put up the demand for lecturers even more. Switching funds to the college sector solves the issue of how to pay for these extra staff, but will leave the secondary sector with a pupil-teacher ratio in many areas little different to what it was 50 years ago. Hard times for schools ahead?

When are deficits called reserves?

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Local authorities are currently starting to put together their budgets for 2023/24. Upper Tier Authorities with responsibility for the High Needs block of the Direct School Gant that deals with expenditure on pupils with special needs will be looking at a year-end overspend in many cases that will need to be added to the amount already sitting off-balance sheet in a temporary solution to the problem of how to pay for this expenditure. The money has been spent by the local authority, but not paid for by central government, so it sits awkwardly in an account waiting for a solution.

At some point, if the DfE or The Treasury deems that the local authority should no longer carry the deficit, but fund it from reserves, this would be a major headache for, I suspect, many local authorities, regardless of their political control. In the present financial climate, the solution is more challenging than it might have been a year ago. As a result, I expect the government to ‘kick the can’ further down the road extending the current arrangement until March 2024, and leaving local authorities with even bigger numbers to worry about.

How might the issue be solved? Before devolved budgets came into being for schools in the 1990s, authorities might just have top sliced their education budget. I cannot see Schools Forum, the body that discusses education funding at a local authority level, agreeing to such a move these days, although the DfE could no doubt mandate it somehow.

An alternative would be to use the precept method, as has been used for social care funding, by allowing local authorities to increase Council Tax by an amount to cover the deficit they have incurred that is not on their balance sheet, but in ‘reserves’. This passes the problem to local taxpayers, despite schooling now being a centrally financed activity.

The government at Westminster could just pay off the figure authorities have in their reserves, either in one lump sum or more likely over a period of several years. But, with their demands for cuts in public expenditure to finance tax cuts, this seems an unlikely option.

Increasing pupil numbers, better healthcare and the acceptance of new medical conditions was always going to put increased demand upon a school system and its funding for pupils with special needs, and especially one that both had not always planned for the changes and was required to do more after the switch to EHCPs from Statements of Need following the 2014 Education Act. A good example of worthy legislation that doesn’t seem to have been fully costed as to its on-gong effects.

Meanwhile, parents probably see declines in service locally, as officers struggle to keep the costs of running the service within bounds. These parents often carry a heavy burden caring for their offspring and fighting a local government system is not something they want to do, but sometimes are forced to undertake. There must be a solution that puts the needs of these young people first.

Leveling Up will need a new Funding Formula

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The current National Funding Formula is fine as far as it goes. However, as I have written before on this blog, it is based upon a notion of equality that resembles the ‘equal slices of the cake’ model of funding distribution. That’s fine if that’s what you want out of the Formula, and the f40 Group of Local authorities have tirelessly campaigned for fair – more- funding for their areas. Again, they are right to do so.

However, if the new agenda has levelling up at its heart, then it is necessary to ask whether the present method of distributing cash to schools and other education establishments will achieve that aim?

As the debate about the High Needs Block of funding for SEND has made very clear, some children cost more to educate than others. If you want all children to achieve a minimum standard of education then some will always cost more to achieve that goal than others. The Pupil Premium recognised this fact. Changing the date of calculation and thus excluding some children from the Premium seems an odd way to start the ‘levelling up’ campaign.

There is a key decision for government to make if they really mean to introduce a ‘levelling up’ campaign in the school sector. Do you hypothecate, as with the Pupil Premium, creating funds only to be used for levelling up purposes or do you distribute more funds generally and leave it to the schools and Trusts to manage the distribution of the cash? This approach leaves maintained schools that are not academies in a bit of a limbo as they don’t have a mechanism to ‘pool’ funds for the common good, as MATs are able to do.

When it works well, the second approach is better, as it is less of a blunt tool than the first method as anyone that has read the history of school funding over the last century will know.

There is a further issue with a Formula tied to geographical areas, as this blog has noted before. Oxfordshire is largely an affluent county, but there are pockets of deprivation in Banbury and parts of Oxford; not to mention the issue of rural poverty as well. Any ‘levelling up’ agenda must tackle these issues in addition to the more obvious areas of underperformance in education achievements.

Overlaying this issue of ‘levelling up’ is the effect on the present Formula of the downturn in the birth rate and its consequences for small primary schools. Do we want them to compete by drawing in parents willing to drive their children to such schools? An alternative is to close them and let council Taxpayers pay the cost of transporting children to other schools. Might work in urban areas, but the Tories would quickly find that save our Schools campaigns can impact more on election chances for Councillors than almost anything else except perhaps closure of a local hospital. There are also implications for the climate change agenda. I would be interested to know where the Green Party stands on this matter.

Doing nothing won’t help the ‘levelling up’ agenda, so if the government is really serious in what it is saying, then action will be needed. Making all schools academies, however repugnant the loss of local democratic control is to people like me, does offer some levers hat MATs can use, but local authorities cannot under the present rules.

It will be interesting to see what plays out over the next few months in a debate where doing nothing will have as many consequences as doing something.

Education for All

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The new Report from the Education Policy Institute (EPI) about exclusions, building on their work earlier this year, is deeply worrying. https://epi.org.uk/wp-content/uploads/2019/10/Unexplained-pupil-moves_LAs-MATs_EPI-2019.pdf

Among the most concerning of EPI’s new findings are;

Amongst the 2017 cohort of pupils, we also found that approximately 24,000 children who exit to an unknown destination do not return to a state-funded school by the spring term of year 11.

The vast majority of unexplained exits do not appear to be a managed move.

51.9 per cent of all unexplained exits are to an unknown destination in the term following the exit.

Both LAs and MATs among the school groups with higher than average rates of unexplained exits, i.e. this is not a problem that is most prevalent amongst a particular structure of school governance. However larger MATs (those with at least ten schools with secondary pupils) all have above average rates of unexplained exits.

These snippets, taken from the Key Findings of a long and detailed report, suggest a system that is not operating to educate all children. Some teenagers have never been easy to educate. Indeed, challenging though schools are today most are not the same as they were up to the 1990s.

There is undoubtedly a trade-off to be had between the cost of educating challenging pupils and the funding a school receives. This trade-off may be starker in areas where Pupil Premium and High Needs Block funds are lower because of high employment and government funding calculations.

Nevertheless, the issue cannot and should not be solved by schools excluding pupils with nowhere to for them to go. EPI might also like to look at pupils that move into an area mid-year and the extent to which some of those with challenging problems are not offered school places.

The education of all our children is an issue for government to tackle. In the present governance hiatus, only central government can identify and tackle both the root causes of the problem and those schools and MATs that are the worst offenders. Ministers have been willing to take on academy trusts over the issue of high pay for Chief Executives. This is another issue for action by central government, with Ofsted, Regional School Commissioners and the Education and Skills Funding Council all acting together.

There is little local authorities can do except identify the size of the problem in their area and ensure missing children are identified and then put pressure on schools. But, with budgets largely in the hands of schools, there is little authorities can do even with maintained schools, and virtually nothing with these academy chains, often with headquarters located far away in another part of the country.

Sadly, one casualty of any intervention might be the right of genuine home schoolers to educate their children as they see fit without the need to keep the authorities informed. This principle goes back to 1870 and the start of state education. However, it must be at risk if it allows for a system that lets so many young people disappear from sight before the end of their statutory education. Out of sight must not mean out of mind.

SEND on the agenda again

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Until recently, the difference between the High Needs Block and remainder of the Dedicated Schools Grant that funds schooling in England was known only to a few officers and civil servants and those headteachers and governors serving on School Forum. The advent of a National Funding Formula for schools outside the special school sector and a growing demand for spending on children with additional needs has brought the issues with the High Needs Block into sharp relief.

The Local Government Association has published the outcomes of the research they commissioned earlier this year. A key paragraph sets out the issues and reflects two of the key issues, the ability of local authorities to ensure all schools act in ‘the common good’ instead of ‘their own good’ and the effects on the school funding of an extension of support to young people up to the age of twenty five from the High Needs budget, not originally designed for that age range.   The report can be found at: https://www.local.gov.uk/have-we-reached-tipping-point-trends-spending-children-and-young-people-send-england

Addressing the points raised in paragraph 17 of the Report would go a long way to creating a sustainable and successful system for young people with SEND.

  1. To create a more sustainable funding settlement going forward there may be merit in considering some key questions around how incentives in the system might be better aligned to support inclusion, meet needs within the local community of schools, and corral partners to use the high needs block to support all young people with SEND as a collective endeavour. These might include
  2. setting much clearer national expectations for mainstream schools;
  3. rethinking how high stakes accountability measures reflect the achievements of schools which make good progress with children and young people with SEND or at risk of exclusion;
  4. correcting the perverse funding incentives that mean that it can be cheaper to pass the cost of an EHCP or a permanent exclusion onto the high needs block than making good quality preventative support available in-school;
  5. looking again at the focus and content of EHCPs to afford greater flexibility to schools in how they arrange and deliver the support needed;
  6. providing ring-fenced investment from government designed explicitly to support new and evidence-based approaches to early intervention and prevention at scale;
  7. providing additional capital investment and flexibility about how that can be deployed by local government;
  8. issuing a national call for evidence in what works for educating children and young people with these needs, backed up by sufficient funding to then take successful approaches to scale and a new focus for teacher training and ongoing professional development;
  9. more specific advice for Tribunals, parents and local authorities on how the test on efficient use of resources can be applied fairly when comparing state and non-state special school placements; and
  10. reaffirming the principle around the equitable sharing of costs between health and education where these are driven by the health needs of the child or young person.

At present, there are perverse incentives for schools to look first to their needs and only then to the needs of children with SEND. The extension of the age range to twenty five brought many more young people into scope without necessarily providing the resource.

The announcement of more cash by the Secretary of State will help, but is almost certainly not enough to solve the problems being faced within many local authorities. At the heart of this is broken system for governance of our schools. In the post Brexit world, whatever it looks like, creating a coherent education system with democratic accountability across the board should be a high priority for the Education Department and its Ministers at Westminster.