Agenda item

The Resetting the SEN Finance System paper reports on the outcome of the school consultation on the establishment of a SEND Investment Fund and a transfer of 0.5% from the Schools Block to the High Needs Block. The LA received 70 responses, although 6 were duplicates, which represented 23.3% of Leicestershire maintained and academy schools. In addition, the LA also received several direct emails which were also reviewed. Concerns were raised regarding the duplicate responses being removed from the consultation, Jane Moore confirmed that, although the report acknowledged the duplications, reported percentages are representative of all responses received for the consultation.

The report detailed that 83% of responses strongly disagreed with the LA proposal to create a SEND investment fund; only 15% either agreed or strongly agreed with the proposal. The key points from the consultation were the LA’s ability to administer a SEND Investment Fund effectively, 63% of responses strongly disagree with the proposal that Social, Emotional and Mental Health (SEMH) should be the initial focus of a SEND investment fund, with only 21% either strongly agreeing or agreeing with the proposal; the primary reason for disagreement with the establishment of the SEND Investment Fund was disagreement with the proposed funding transfer but a number of responses acknowledged that SEMH was a pressing need. 86% of responses strongly disagreed with the proposal for an annual funding transfer of 0.5%, with only 9% strongly agreeing or agreeing. Comments referred to the uneven impact on schools with a view that schools with higher SEN needs contributing more to the transfer.

The report analyses key themes identified within the consultation responses and provides the LA’s response. To address themes of school underfunding, the report reiterates that the purpose of the SEND Investment Fund would be to give funding back to the schools, rather than directing funding to the LA. The formula for the High Needs block does not consider the number of EHCPs; funding is determined by various demographic factors, general population, and levels of need and low deprivation. Several LA responses address a perception of the LA’s mismanagement of the High Needs block and a lack of faith in the LA to deliver support for children and young people with SEND. The LA has limited control on how the High Needs block is spent, £120m is spent on placements, High Needs DSG is £109m. The report sets out a reset of the SEND Finance System in line with that delivered by TSIL and a joint responsibility for supporting children and young people with SEN between LAs and schools.

The report addressed concerns of political bias within the LA’s proposal. The funding framework is set nationally by the DfE, including funding protections for schools, and it is the DfE that makes decisions on the factors within the National Funding Formula including the targeting of additional school funding. The LA has exceptionally limited ability to make changes to the nationally set funding frameworks for both Schools and High Needs. To address concerns that TSIL has not delivered improvement to the SEND system, the report noted that TSIL delivered more robust and consistent decision making through the introduction of more robust triage and decision-making processes. The proportion of EHCNAs with Decisions to Assess and Decisions to Issue has reduced over time and is now in line with operational targets. There is a significant year on year reduction in tribunal requests overall (as of 7th October, requests were down 14% year on year), and specifically on tribunals around refusal to assess or refusal to issue.

The consultation responses cited many concerns regarding school funding cuts, but the report detailed that the transfer would occur through the reduction in annual funding gains. The proposals do not reduce the funding currently available to schools through the NFF but would reduce any annual gain in funding at a school level between 2024-25 and 2025-26.

SEMH is the primary focus of the proposed SEND Investment Fund given its prevalence within the Leicestershire EHCP population but also within inclusion support services such as Oakfield and the SEIPs, Children with Medical Needs and Children Missing Education. The fund will ensure that funding remains within the mainstream sector who will benefit from its activity and will ensure the co-production of sustainable solutions to improved pupil outcomes to the benefit of all children and young people, and their parents and carers in Leicestershire whilst being an effective use of funding.

Jane Moore noted that this report was written prior to the government’s new budget announcement and that the real-time impact of that on Leicestershire and its schools is unclear. However, whilst feedback from the consultation was negative on the proposed transfer, no alternative proposals were made to address the financial difficulties, so the LA proceeded with the following Recommendations:

1.    That Schools Forum note the responses to the consultation on Resetting the SEN Finance System.

2.    That Schools Forum note and consider the LA’s response to the key themes within consultation responses.

3.    That Schools Forum support the establishment of a SEND Investment Fund.

a.    Based on discussions below, this recommendation has been amended to the following: That the Forum approves a Schools Forum establishment of a SEND Investment Fund through a Schools Block Transfer.

4.    That Schools Forum approve a 0.5% transfer of funding from the Schools Block to the High Needs Block of the Dedicated Schools Grant to establish a SEND Investment Fund.

5.    That Schools Forum note the next steps of the LA should Schools Forum not approve the proposed 0.5% transfer, notably to seek a decision from the County Councils Cabinet on 22 November 2024 on seeking Secretary of State approval.

Peter Leatherland questioned why the LA could not wait until the outcome and impacts of the new government’s budget are cleared. Government understands there is a need for more SEND High Needs funding. Jane Moore clarified that the approval for the 0.5% transfer was time sensitive as it required a formal Cabinet decision to seek Secretary of State approval which had to be lodged with the DfE by 18 November. Delaying the transfer until the impact of the government budget were better understood would mean that any transfer would be delayed until 2026-27, rather than 2025-26.  Kath Kelly noted that schools would be aggrieved if more money to the High Needs block was agreed by government after the 0.5% transfer had occurred.

Kath Kelly raised concern regarding the language used throughout the report. Whilst the 0.5% would be capped from additional money schools receive, inflation and increased staffing costs are higher than increases in funding meaning that schools would not receive a real term increase in funding, so the proposals do set out a budget cut. Kath believed that not addressing the transfer as a budget cut was disingenuous. This position was supported by Jon Mellor who further said that the report could be perceived to have indicated that the LA can spend funding better than schools, especially if the transfer is not approved by schools. Martin Towers referred to Paragraph 20, in which the report needed to be clearer that the LA would seek approval from Secretary of State and that the transfer would not be used to reduce existing deficit. Jane Moore agreed that the Cabinet report would make the cap in gains more explicit. However, the LA proposed that the SEND Investment Fund could be administered by the schools, not the LA and schools would be fully involved in the detail of the proposal and its governance.

Kath Kelly noted from SEN experts that better interventions introduced earlier results in fewer EHCPs and a better SEND system. Jane Moore questioned where the responsibility for proposed earlier interventions would sit, as the LA has no funding within the High Needs block to do this. Where other LAs have been more successful with earlier intervention there has been more inclusive practice in mainstream schools. However, tribunals recommend expensive interventions and parents request EHCPs. A reset of funding is required, as additional funding will not resolve the current problems.

Kath Kelly noted that Leicester City Council provides pupils with lower-level support earlier. There is a difference between Leicester City and Leicestershire County’s Element 3 funding and noted that County’s Element 3 rates haven’t been updated for a significant period. Schools considering themselves to be at a disadvantage without pursuing an EHCP is disincentivised by City because City offers more funding earlier. However, Jenny Lawrence noted that different school funding decisions had been taken over time and indeed both Councils have different funding settlements. 

Rosalind Hopkins noted that the transfer could result in schools demonstrating less inclusive practice. The reduction in funding could lead to more schools applying for EHCPs to obtain the support needed for pupils, rather than using available funding. Jane Moore agreed that a breakdown in LA relationships with schools and changes in school practices were significant risks.

Alison Ruff has questioned how the funding generated by the transfer would be used. The LA’s proposals on how the funding would be used is vague. Jane Moore noted that the proposed uses of the funding were vague deliberately because the LA wanted to work with the schools to administer the funding; the LA hasn’t been able to work with schools on how the funding would be administered because schools are not in agreement to the transfer. Suzanne Uprichard felt that the governance of the fund should have been determined before Forum was required to vote. Jane assured the Forum that the LA is committed to working with schools on the governance of the investment fund.

Rosie Browne has questioned the timescales of a SEND Investment Fund should it be approved by Forum or Secretary of State. Rosie expressed concern regarding the delay between the transfer being agreed, funding to schools being removed, and the support from the investment fund being put in place. Rosie noted that TSIL did not meet its proposed timescales. Jane Moore acknowledged that the LA would need to work quickly upon obtaining approval to the transfer to ensure delays in delivery were minimal.

The LA was obligated to pursue a 0.5% transfer due to financial difficulties but also needs to look at the use of funding differently. Kath questioned whether Secretary of State would be more or less likely to approve the transfer if the money is not being used to directly reduce the High Needs block deficit. Jane Moore answered that the Secretary of State would be less likely to approve a direct transfer to reduce the deficit.

Peter Leatherland raised concern that the LA and schools don’t have a positive track record in working together to reach best outcomes. Jane Moore has endeavoured to demonstrate through the report and previous Schools’ Forums how the High Needs budget works; failure of the High Needs is not a failure of the LA. Jane has been explicit that the LA proposal is to target the funding back to mainstream schools and work with schools on functioning plans as to how the fund should be administered.

The Schools’ Forum had the following responses to the LA’s recommendations:

1.    The Forum has seen and noted the responses to the consultation on Resetting the SEN Finance System. The Forum also challenged the language throughout the report in referring to a cap on funding gains as not being a cut in funding.

2.    The Forum has noted and considered the LA’s response to key themes identified in the consultation.

3.    The Forum questioned the wording of this recommendation; members would approve a SEND Investment Fund if alternative funding was available. However, proposals for the SEND Investment Fund are reliant on the 0.5% transfer being approved. Jane Moore has agreed and amended the wording of the recommendation (see above).

To approve a Schools Forum establishment of a SEND Investment Fund through a Schools Block Transfer, the Forum has voted as follows:

4.    To approve a 0.5% transfer of funding from the Schools Block to the High Needs Block of the Dedicated Schools Grant to establish a SEND Investment Fund Schools Forum, Forum attribute their decision to the detrimental financial impact on schools and the management and administration of the Fund. The Forum has voted as follows. In coming to this decision:

6.    The Schools’ Forum has noted the next steps of the LA to seek a decision from the County Councils Cabinet on 22 November 2024 on seeking Secretary of State approval on the proposed 0.5% transfer.