Agenda item

Jane Moore introduced the report which sets out the current position regarding the High Needs Development Plan and the current financial forecast. The report sets out the systematic issues within the SEND environment and the growing recognition and the financial position being a symptom of that rather than a pure financial management issue.

 

Jane explained that paragraph 4 and onwards outlines the national concerns there are around the high needs spend and SEND system.  Jane stated that there is no single reason for the high need’s deficit which an issue nationally and local authorities across the region are having difficulties with their high needs budget.  The problem is wider than just a financial issue as there are some systematic issues that are also contributing towards the deficit and funding pressures.

 

Jane referred to paragraph 8 and in terms of the high needs section of the Dedicated Schools Block the NFF for the high needs formula was introduced in 2013 and the way in which the settlement has been set up is detailed in paragraph 8 with the distribution figures for the 2021/22 settlement.  For 2020/21 expenditure is 14% in excess of the grant.  The formulaic allocation that is undertaken around the high needs block reflects the expected incidence of SEND rather than the numbers of pupils supported and their individual needs.  The DfE Benchmarking data compares expenditure and DSG allocations, it shows Leicestershire is below its statistical neighbours in terms of need but higher on both expenditure and the number of Education Health and Care Plans.  Jane added that this is currently being looked at why this is the case.  Some of the position is due to relying on independent provision which has been discussed previously and the high needs plan is partly trying to address this.

 

Paragraph 11’s chart compares the SEND revenue expenditure to the performance against other County Councils.  In terms of performance Leicestershire is currently rated second but in terms of expenditure Leicestershire is 18.  In relation to demand for EHCP’s it is continuing to grow nationally and locally.  The SEN2 data identifies a significant growth in 2015/16 until SEND reform – there is a sharp uplift in 2016 and towards 2015 around the number of the EHCP’s in the system.  This pattern is seen nationally as well as locally in Leicestershire and are similar to those increases particularly in 2019 where regional colleagues were seeing a decrease.  In January 2020 Leicestershire’s EHCP’s had risen to 4,751 and this has increased to about 5,000 – about an annual growth rate of 12.5% and in terms of growth for the previous year it was a 19.5% increase.  This is higher than the regional and national and are therefore looking at why this is the case for Leicestershire. 

 

In terms of provision, as a result of capital investment of £30m the placement mix is beginning to change so the number of pupils with higher cost placements is no longer growing and pupils are having their needs met within mainstream schools or units attached to mainstream schools.  It is forecast that the number of pupils in independent provision will continue to fall as new local provision is being built.

 

Jane explained that parental expectations have a significant impact on the type of placement specified within the EHCP and parents have the right to express a preference.  Parents are continuing to go to Tribunal and the outcomes may result in the local authority being overruled.

 

In terms of the 2020/21 provision Jane explained how the DSG ring-fenced grant worked.  At the end of 2019/20 there was an overall deficit of £7m deficit on high needs and 2020/21 the overspend being projected by £11m leaving a £18m deficit at the end of this financial year.  Placements costs account for 90% of the high need’s expenditure.

 

In terms of the medium-term financial strategy the DfE did announce the provisional Schools Budget settlement for 2020/21 as discussed earlier but included an increase of £730m nationally for all authorities which equates to an increase of £7.8m for Leicestershire. 

 

Paragraph 22 sets out the financial forecast for the high needs funding.  Jane went through the costs and outlined the cumulative funding gap which rises up to £22m and starts to fall in 2022/23 and up again in 2023/24; part of that is the plans around building and new provision.

 

Jane stated that the Schools Forum discussed the proposed Schools Block Transfer for 2020/21 at its meeting in September 2019 which was taken to Cabinet and they agreed not to pursue it for that financial year.  This has been looked at again for this financial year but the introduction of the minimum per pupil funding means it is not possible for all schools to take an equal impact of that transfer.  As previously discussed, the local authority has written to the Schools Minister around the ability for this to be carried out fairly.  A potential transfer has been included in 2022/23 and this will be presented to Schools Forum earlier than previously but equally awaiting a response from the Ministers.

 

Jane referred to the demand savings set out in the table in paragraph 33 which outlines the actions to try and reduce the rate or influence the rate of growth in terms of numbers of pupils.  Paragraph 34 outlines the cost reduction savings actions where there is the ability to influence the average unit cost around the type of placement and included is the development of local provision which has a lower unit provision cost than independent provision.

 

Jane outlined the high needs development plan in Paragraph 35 which is looking across the SEND system at best practice and analysing existing service data to look at further opportunities and the activities currently happening to help with this process.  In addition to this a sufficiency plan is in place to develop further SEND places; the plan so far comprises 35 separate projects which are outlined in paragraph 39 and by the end of the Autumn term the plan will have provided an extra 459 places with a further 75 to be delivered between 2021and 2023.  The 2020/21 capital programme commits £17.78m to the programme and work is now in progress to develop a second phase of the plan.  The additional places have been largely taken up by new demand which has limited the ability for places to be taken by pupils moving from higher cost provision.

 

Karen Allen asked for clarification on paragraph 9 and 11 as they seem to contradict each other.  Jane explained that paragraph 11 sets out where the local authority sits in terms of performance based on a set of measures that are used to define what they mean by high performing and then the net expenditure puts the local authority at the lowest which means high performing but spend the least money as receive the least money.  Paragraph 9 is different from the performance measure in terms of need as Leicestershire is below its statistical neighbours in terms of need but are higher in terms of expenditure on the number of EHCP’s so essentially Leicestershire is spending more than should do on individual EHCP’s based on levels of demographic need and part of that is that Leicestershire’s spend is higher because of its use of independent provisions. 

 

Karen Allen commented that it felt sometimes like schools are having to compromise their standards and performance in order to make the system affordable.  Karen added that schools struggle with this as they understand children’s needs as individual cases, and should schools be compromising children’s needs. 

 

Jane commented that as a local authority we would not say the quality was being compromised and the services within the County Council seek to see children as children and therefore deliver plans according to need and totally agree Leicestershire is underfunded as a local authority and not just SEND but including school budgets

 

Troy Jenkinson congratulated the local authority on managing to get reasonable resources on very little funding but to echo Karen Allen’s point that schools do their absolute best to support children with very minimum funding and that need to take on board when EHCP funding is received for children within mainstream school that does not cover half what is put in in terms of staffing, resources, supporting and Leicestershire has traditionally been known for supporting those children that are SEN on very minimal funding and the lack of funding needs to be shared with the Government.

 

Jane agreed and stated that schools funding and the impact of low school funding is having a significant impact on SEND funding so one of the strong points Jane has made to a number of forums over the years with the DfE is that whilst it is important to get the SEND funding right if the schools funding is not right the impact throughout the system is massive.  Jane stated that importantly one of the changes over the last year or two is that there has been an increase in the number of children supported in mainstream schools so are clear that schools know what they are doing to support children and have been clear from the start of this high needs development plan that as a local authority cannot do this on its own.  The schools have been supporting those children to be in school for us by being more innovative and flexible about how funding is used to enable schools to keep children in mainstream school and meet their needs.  The product presented to you now is a joint product and a partnership working and the role of schools is recognised by the local authority and it has articulated this very strongly to the DfE together with the school’s role in enabling these children to be successful.

 

Martin Towers asked if other authorities are looking to top slice 0.5%.  Jane stated that some authorities have done this; there are some authorities who do this year on year and have done for a number of years and there are a number of neighbouring that applied to do this last year and were not successful.

 

Jason Brooks said in terms of the provisions he fully supported everything Jane and the local authority have done in trying to bring provision back in house and the quality put in place has been excellent.  Jason commented on the scrutiny of these independent schools and outcomes and acknowledged that funding is an issue but in terms of what the local authority are trying to achieve Jason expressed his thanks. 

 

Jane stated that quality is what we want for our children and the high needs plan will develop provision managed locally by local experts and the feedback received around the provision and the new provision being run by Leicestershire schools is really positive.

 

Deborah Taylor echoed what Jane said that all children in mainstream schools should be supported to the level they need to be and acknowledged that schools are underfunded as well as the local authority.  The aim is to get to a place where schools are adequately funded, that they can support SEND children within their schools without being escalated to the local authority having to put them in independent provision that is not the place for them to be.  Deborah acknowledged that schools are doing a great job on limited funding and is definitely a joint solution towards this.

 

Graham Bett said that he agreed with comments made but the potential possible transfer from schools’ block is giving the Government the wrong message as the local authority needs proper funding from Government so the local approach can work.  Jane stated that one of the things the local authority will have to consider is that every method is being looked at to balance the high needs so from the local authority’s point of view the consideration of a transfer is still on the table but if considered again it will be presented to Schools Forum in much better time to properly consult.

 

Schools Forum noted the current position with regard to the High Needs Development Plan and the current financial forecast.