Agenda item

Jane introduced the report which confirms the local authority intention to develop a methodology for a potential transfer of 0.5% of the Schools Block to the High Needs Block of the Dedicated Schools Block for consultation with Schools in September for decision by Schools Forum in November.

 

Jane explained that Schools Forum had received regular updates on the financial position of the High Needs Block and the programme worked on which was developed in 2017.  Jane explained that the High Needs element of the Dedicated Schools Grant was the only source of funding to the local authority to meet the needs of children and young people’s special educational need and as a result of conversations locally and nationally the level of funding that is being given to all local authorities is insufficient to meet not just the growing needs but the range of responsibilities that were given to local authorities and schools and other organisations as a result  of SEND Reform back in 2014.  There are significant concerns for all authorities and the associated deficits that are held by the local authority as a result of them having to manage that external grant.  The local authority has been projecting a high needs deficit since 2017 and revise the projection on an annual basis based on a number of factors. 

 

The projection has been revised to include the most recent data on demand and costs and the cumulative deficit has now increased by £13.8m in 2024/25 since November with the deficit over a four year period of £43m despite the delivery of £24m in revenue savings.  Jane said the local authority has to hold that deficit so have to set aside other revenue offset against the deficit and the increase will require further savings in the Council’s budget of £13m and is the most significant financial challenge the Council is facing.  

 

Jane highlighted that the financial plan has included a proposed transfer of 0.5% of the schools block into the high needs for 2022/23.  The local authority’s intention is to seek a transfer was confirmed at the Schools Forum meeting on 8 February 2021.  The recommendation in the report was to seek representation from school groups to form a working group to deliver those proposals for the proposed transfer but following the meeting letters were received from LPH and LSH which stated that they did not consider engagement in a working group would be appropriate or productive.  Jane said that the working groups did not and will not take place, but the local authority have continued to work through what the transfer could look like. 

 

A report will be presented to Cabinet on 22 June 2021 which gives an update on the high needs development plan including the update on the current projected deficit and also sets out the proposal for the 0.5% schools block transfer and the consultation in the autumn term with schools.  Cabinet are asked to consider if an application should be made to the Secretary of State should the Schools Forum refuse the request. 

 

Jane said that in November 2019 Cabinet was presented with a report to determine whether to pursue a funding transfer of 0.5% and at that meeting it was proposed that a transfer was not pursued and part of that agreement was to work collectively to develop some additional proposals to bridge the funding gap but did not rule out a future transfer request if necessary.  Cabinet agreed not to progress with that transfer and work was carried out to co-produce further work to impact on savings.

 

Jane said that in the absence of the working group the local authority will continue to consultation in September and potentially a submission for a decision to the Secretary of State on a transfer.

 

Jane explained that the issues were a continued increase in EHCPs which is not in the control of the local authority or schools.  The rate of growth in EHCPs continues to significantly exceed the population growth. 

 

Jane said that the High Needs Development has been successful, is delivering some service transformation, delivering an increasing number of specialist school places and some of the financial savings or targets have been challenging.  In terms of demand for specialist places this has increased far in excess of what was estimated in 2018 and are forecasting it to rise further.  Jane said that some of the savings set out in the plan have not been possible as families do not want to move children, or the new provision has been filled up with new demand.

 

Jane stated that there are significant cost increases in the cost of independent school places as well as an overall cost in our own special school places and a significant increase in the cost keeping children in mainstream schools.

 

Jane highlighted the timescales for transfer as set out in the report.  The NFF does include a whole range of restrictions on local authorities which Jane outlined from the report.  Consultation with schools will be early Autumn and should Schools Forum not approve the transfer when presented then the Secretary of State will be asked to agree for the transfer to happen.

 

At this point Jane asked if there were any questions.

 

Martin Towers asked if there was any reason why the local authority do not take the money given and look at how the most need can be met in the county using the money available.  Jane said that an allocation of funding is given for the High Needs Block but on top of that are the statutory obligations that must be met.

 

Martin commented that from the paper it does not cover the plan to manage the controls to reduce the unplanned increases moving forward, is this something that will be incorporated moving forward.  Jane stated that this is the only budget she has full responsibility for but no control over.  Jane added that the high needs development plan has built more places but they have filled with new demand rather than enabling moving children from costly independent placements.  The local authority is taking £24m worth of actions but also looking at reducing demand and work to support children without needing to put in additional funding and when additional provision is needed to make sure the provision is not hugely costly.  Jane stated that as Director she had very little control over either of these mechanisms.  Jane added that even with the £24m worth of savings we are still moving to a £42m deficit and the root of this was the reforms back in 2014 which shifted the responsibility of the system significantly.

 

Martin asked if a disapplication of statutory duties to meet the funding need was an option.  Jane talked about an option in another county regarding disapplying responsibility of a statutory obligation but stated currently there is simply insufficient funding to carry out statutory duties, hence the deficit.  In response to a comment from Martin Jane stated it was right to challenge her and all options were being considered.

 

Jane Dawda referred to the paragraph 12 and asked if the 0.5% transfer was in that one year or year on year.  Jane Moore stated that the current proposal was a one-year transfer.

 

Jane Dawda asked for it to be made clear to schools in terms of how this will affect them in monetary terms when schools are consulted in the Autumn term.  Karen Allen said that previously there was a spreadsheet showing the impact on schools and for some it did not impact but for some it did massively.  Jenny commented that as part of the consultation process the local authority has to demonstrate to each what the proposals mean to them. 

 

Jane Dawda asked if the transfer affected maintained schools and academies.  Jane Moore stated it was across all schools but referred back to Karen Allen’s comment around the issue of it impacting significantly disproportionate on some schools and no impact on the others.

 

Kath stated that she appreciated the work carried out and actions were beginning to impact in other ways however financially it was not quite showing.  Kath added that schools do budget carefully as Jenny stated earlier to avoid problems and going into deficit.  Kath said that the high needs budget was presented each year and discussions take place around possible deficits and commented that the £13.9m was large and asked with the number of EHCPs rising how much of that was generally unforeseeable.  Jane briefed the meeting on how the budget was projected in terms of demand and impact of the new initiatives.  However, Jane said that growth was bigger than projected and growth is greater than other local authorities but the growth projected was not enough and the growth was bigger.  Jane also said that the projection was part of the development plan and some of the savings were part of that ongoing projection but have not been successful in doing that.  Jane added that the unit cost of children has exceeded what was projected.

 

Kath asked if the range of assumptions on which the future planning is built and the rationale for these could be shared.  Jane agreed that it would be helpful to share the high needs development plan and what the assumptions are whether at this group or another forum.

 

Chris Parkinson stated that he was disappointed that the working party did not happen but felt he was voting for a working party to construct a solution as opposed to it being presented as an assumption that the 0.5% transfer was taking place.  Chris added that this was why the letters were sent.  Chris said that taking the 0.5% is not solving the problem and was a small part of the issue.

 

Jane acknowledged that the letters received set out that secondary and primary school leaders did not wish to engage should have been responded to in terms of the ambition to have a wider conversation.

 

Karen Allen agreed with Chris’ comment.

 

Jane stated that the working group was to look at how the 0.5% transfer would be taken and referred to Chris’ additional point about how as a group could collectively work together to solve the bigger issue.  Jane acknowledged that school leaders did not want to be involved in the original working group.  Jane stated that she had to demonstrate she was doing everything to manage this problem which would be presented to Members and unless every avenue was explored and every opportunity taken she would not be able to fully demonstrate to the DfE that this system was not working.

 

David Thomas stated that he asked at the last meeting as to whether the decision had already been taken about transferring the 0.5% and it was minuted that the work was being done but the decision would be brought back subsequently.  He felt it was important to note that no decision had been taken and the working group would report back.  David added that one of the main discussions at Forum has always been high needs and it was clear the system was not working because of insufficient funds in the system to meet the needs of those children.  David said this was a national problem, not just a Leicestershire one and asked what was the local authority Members, local MPs and teaching representatives doing to address this national issue.

 

Jane said that the outcome of the SEND Reform review was awaited but expected that it would not acknowledge there was not enough money in the budget but how the system could be managed better and how schools can be more inclusive.  Jane said that in terms of responses Members are briefed on this matter than any other matter.  Jane said she was part of a national group of directors that regularly meet with the DFE and most recently with Minster Ford so are therefore lobbying heavily around the position.  Mrs Taylor added that all Leicestershire MP’s and Ministers are aware of the issue.  Mrs Taylor felt that system reform was needed but on the contrary schools are being asked to be inclusive yet money was being taken away.  Mrs Taylor stated that the working group to look at options to address this demand was the current point in time.

 

Graham acknowledged the work carried out by the profession, Jane and her colleagues locally.  Graham said that that it was clear in this paper what the working group was proposing.  Graham stated that the meeting was seemingly agreeing that the system, set up in 2014, no longer works and therefore it was the Government’s problem and not for schools to solve.  Graham added that it was a pointless exercise to take 0.5% from schools in a single year and only raising £2m when the problem was a larger amount.  Graham said that the County Council suggesting that this should happen would set a precedence to take the £40m over a period of years and schools ought to be concerned.  Graham stated that a lobbying exercise needed to be carried out as the Government was the one to target rather than the schools and the children they serve.

 

Mrs Taylor felt the system was not working and that it required tweaking which the local authority was lobbying the government with these changes.  Mrs Taylor said that if the transfer does not go ahead there would never be a way into Ministers as they would question why a transfer has not been carried out.  Mrs Taylor said this was difficult but would support the approach.

 

Graham stated that the problem should be put back to the Secretary of State to solve.  Jane said that the only challenge to get the Secretary of State to do that was by carrying out the process.  Jane said that she expected that Forum will not vote for the transfer in September and that a Secretary of State decision would be requested.

 

Carolyn Lewis commented from a different perspective in terms of supporting the local authority for doing this and also commented on the language used regarding taking money from children as it was redistributing money to meet children’s needs in Leicestershire.  Carolyn said that there are structural issues that needed to be discussed and explored which Jane and Mrs Taylor have given a clear rationale on about the action at this time.  Carolyn said that the Church of England would very much like to support the local authority in these conversations with the government as children should have access to the right level of support for them to be included fully and their needs met.  Carolyn added that the local authority’s strategic work in trying to deal with this issue with capital projects has been positive under Jane’s leadership drive to look at SEND provision.  Jane appreciated the comment and felt supported by the entire whole school community.

 

Karen Allen said she was interested Mrs Taylor’s perception that some of this was about parents asserting their rights to have their child assessed when perhaps they do not need to and agreed with that to a certain degree.  However, Karen wanted to make it clear that, as a head and from other heads, for whatever reason that in a relatively short time the number of children that are coming into school with really complex special needs has increased.  Mrs Taylor acknowledged Karen’s point.

 

Karen commented there was not a financial incentive for schools to apply for EHCPs as schools have to fund the first £10k of a child’s needs, schools have to be inclusive and want to meet children’s needs.

 

Karen asked for it to noted that schools put in a huge amount of work in making children feel inclusive by supporting the wide range of children’s needs and where there is no funding as they are not on a plan.  Karen said that schools do this because the children are in their schools and therefore want to do it.  Karen felt this important to note as it needed to be captured of what is going on in all schools.

 

Schools Forum noted the worsening financial position of the High Needs Block.

 

Schools Forum noted the intention to consult on a Schools to High Needs Block transfer of 0.5%.