There has been growing concern over funding for children with special educational needs and disabilities, with campaigners warning that the system is “failing children”. 

The government has now announced an extra £700 million for SEND in 2020-21.

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But already at least one in five councils has a deficit in its education funding serious enough to require it to submit a recovery plan to the Department for Education. 

Here is what you need to know about how much control local authorities have over how they spend high-needs money.

How is education funding given to local authorities?

Local authorities receive a block grant from the Department for Education called the Dedicated Schools Grant, or DSG.

Within the DSG there are four blocks: the schools block, high-needs, central services and early years.

A new national funding formula is being used to calculate the core school funding in 2018-19 and future years. There are separate funding formulas for high-needs, central services and early years.

The central school services block (CSSB) was introduced in 2018-19 to fund local authorities for the statutory duties they hold for both maintained schools and academies.

What does high-needs funding need to cover?

High-needs funding is for pupils and students aged 0 to 24 who need high levels of support.

It includes place-based funding for pre-16 and post-16 places in:

• Special units and resourced provision in mainstream schools, including maintained, academies and free schools;
• Post-16 high-needs places in mainstream schools, including maintained, academies and free schools;
• Special schools, both maintained and academies;
• Pupil-referral units (pre-16 places only);
• Alternative provision academies and free schools (pre-16 places only);
• Further education and independent learning providers (post-16 places only).
   

High-needs funding also covers pupil-based top-up funding for pupils and students in places in these institutions.

And it is used for top-up funding for pupils with high needs in special post-16 institutions, non-maintained special schools and all funding for children and young people with high needs placed in independent schools, independent alternative provision and hospital education.

What is the high-needs funding formula based on?

In September 2017, the Department for Education set out the new high-needs funding formula. Half of the block is based on historic local authority spending for high needs and the rest takes into account a range of factors such as population, deprivation, school attainment and poor health.

Can funding be moved between blocks?

Local authorities may allocate up to 0.5 per cent of money designated as school block to other blocks, with the consent of the schools forum.

If the local authority does not have the consent of the schools forum, or wants to move more than 0.5 per cent (even with the consent of the schools forum), it must apply for permission to do so from the education secretary.

The DSG grant conditions for 2019-20 say that if the education secretary agreed to the allocation of more than 0.5 per cent in 2018-19, the local authority may allocate the same percentage with the consent of the schools forum.

For the financial year 2019-20, 38 authorities applied to the education secretary to move money and 27 were given permission to do so.

Hasn’t there been some extra funding?

In July 2017, the government announced an extra £1.3 billion of funding for schools over 2018-19 and 2019-20.

In December 2018, Damian Hinds, then education secretary, announced a further £350 million for SEND - which consisted of £250 million over two years to be distributed to local authorities on top of their existing high-needs budget and £100 million for more specialist places.

And last week, Boris Johnson announced that there would be £700 million for SEND in 2020-21, as part of a £14.4 billion package for schools.

Is it enough?

The Commons Education Select Committee reported on its inquiry into school funding in July 2019 and said that “special educational needs and disability funding is completely inadequate. There is simply not enough money in the system to provide for the scale of demand”. It estimated that local authorities were expected to face a funding shortfall in excess of £1 billion by 2021.

What happens if a council overspends?

From 2018-19, all local authorities with a cumulative DSG deficit of 1 per cent or more at the end of the 2018-19 financial year must submit a recovery plan to the Education and Skills Funding Agency showing how they will bring the deficit into balance in a three-year time frame. The plans were due to be submitted by the end of June and the ESFA is due to give feedback to local authorities on their plans by the end of September 2019.

The guidance on the plan says that where the deficit has resulted from high-needs pressures, the evidence should include an assessment of why local factors have driven up costs beyond the funding allocations - and “there should also be a plan to change the pattern of provision where this is necessary, as well as to achieve greater efficiency and better value for money in other ways, together with evidence of the extent to which the plan is supported by schools and other stakeholders.”