There is a “continuing and considerable inequity” in the levels of special needs funding for schools going to different parts of the country, a new report has warned.

It says the significant differences in the budgets given to local areas to fund high special educational needs are largely the result of historical spending arrangements.

But it found that the difference between the highest and lowest funded authorities has widened this year.

Background: Impact of the new national funding formula

Need to know: How does high needs funding for SEND work

SEND: Number of pupils with EHCP plans up this year

The research also found “a significant link” between  the level of funding going to a local areas and their level of use of specialist provision for pupils.

Authorities that were relatively well-funded historically tended to have a higher percentage of pupils in special schools or resource bases. 

The new findings come in a report commissioned by the national SEN Policy Research Forum.

It found that although areas with higher levels of need tended to get more money, there is considerable variation across the country, with significant differences in the public funding for children and young people with special educational needs and disabilities (SEND) between areas with similar levels of need.

Researchers says this means one area with similar social disadvantage can get nearly twice as much as another, and some of the highest funded authorities are ones that have a relatively lower level of need.

The significant variation in the level of High Needs Block (HNB) budget allocations to English local authorities ranged from £798 per 2-18 year-old resident to £365, with an average of £527.

The spending gap between the highest and lowest funded areas widened in 2021-22, the new report says.

Report author Dr Peter Gray said: “The Government has put more money into high needs over the last three years but has not taken the opportunity to address these inequities properly.”

The paper adds: “Despite the aspirations of the National Funding Formula to move to a fairer distribution, variation was still largely determined by history.”

The research paper was carried out by Dr Gray,  Dr Alan Marsh, Dr Peter Gray and Professor Brahm Norwich from the University of Exeter.

The researchers analysed high needs block funding given to all local authority areas in England and compared this to their levels of social disadvantage.

What does high needs block funding pay for?

Funding for high needs comes to local authority areas as part of the Dedicated Schools Grant (DSG).

It is expected to cover educational provision and services for pupils with more complex/significant special educational needs.

It includes funding for special schools, alternative provision and mainstream resource bases, as well as additional support for those who are educated in mainstream school.

Demands for high needs funding have risen significantly in recent years and many authorities have been reporting substantial overspends.

Research last year showed almost 90 per cent of councils in England overspent on their budgets for teaching children with SEND, with the total funding gap amounting to £643 million.

The report says: “The government has invested more money in this area over the last three years which has helped address this issue but spend continues to grow”.

Over three years the government has increased HNB funding by £125m in 2019/20; £780m in 2020/21 and a further £730m in 2021/22 , according to the report.

Dr Gray said: “Evidence shows that a wide range of authorities have overspends, not just those with lower levels of funding.

“The Government expects all local areas to manage within their budgets but no account is being taken of how well or badly they are funded in the first place.

“They have recently agreed to cover the deficits in the top five overspending areas. Our evidence shows that some of these are already relatively well-funded compared to other similar authorities. There is limited incentive for other authorities to manage their deficits when they see this happening.”

Dr Marsh said: “Our research shows that, despite extra money coming into the system, funding is still largely determined by history, by the amount of money local authorities were spending on high needs when the DSG was first created over 10 years ago”.

The research also identifies a link between the amount of funding going to a local area and the amount of specialist provision being allocated to pupils in those areas.  

Dr Gray said: “The level of use of specialist provision in England is affected by local policy and practice.

“However, more inclusive local authorities should not be disadvantaged by having less money to meet pupil needs.”

The government is rolling out a new national funding formula which aims to address the imbalance in funding levels in different parts of the country. 

It introduced this in 2018-19 and is gradually reducing the differences in per-pupil funding between similar local authorities.

The new report says: “When the Government introduced the National Funding Formula, it declared an intention to ensure greater fairness in education funding across England, with mainstream school budgets determined more consistently on demographic need rather than decisions being made at local level.

“This policy extended to area high heeds budgets which had been set, when DSG was created, on the basis of historical spend.”

A Department for Education spokesperson said: “We have announced the biggest increase in school funding in a decade and increased high needs funding for councils to provide services for families and children with special educational needs and disabilities to more than £8 billion this year - an increase of nearly a quarter over two years.

“We are providing targeted support for individual authorities facing particular challenges with their dedicated schools grant deficits, and our SEND Review is also considering how to make sure funding is being spent fairly, efficiently and effectively.”