Blockbusting: What’s Happened to the £780m in Extra SEND Funding?

In 2019, the Government announced the biggest increase in school funding in years – a three-year funding programme, pumping an extra £2.6bn into the schools budget in 2020, and pledging to increase it by billions more in the two years after that.

As part of this, the Government said that £780m of this extra funding in 2020 would be earmarked for children with special educational needs and disabilities, “...so every pupil can access the education that is right for them, and none are held back from reaching their potential.”

This £780m funding boost entered the financial system in April. What difference has it made so far?

SEND Funding

First, let’s look at where and how this extra SEND funding has been pumped in. SEND funding is horrendously complicated, but here’s roughly what’s happened:

• Each year, the government doles out schools' funding to local authorities via a grant system, known as the Designated Schools Grant.
• The Designated Schools Grant is made up of four separate blocks. Central government decides how much money goes into each of these blocks for each local authority based on complex formulae that experts credibly argue doesn’t distribute funding fairly.
• One of these four blocks – the High Needs Block – is supposed to be exclusively earmarked for particular types of SEND spending. In April, the Government increased the overall size of the High Needs Block by £780m – a 12% increase on last year, and the biggest increase since this funding system was set up in 2013.
• Sometimes, people call the High Needs Block ‘the SEND budget’ – but that’s a bit misleading. Most school pupils with SEND are educated by people and resources that are paid for out of the mainstream schools funding block, imaginatively known as the Schools' Block.
• The Schools' Block grew by around £1.7bn this year. We don’t know how much of this Schools' Block increase has directly benefited children with SEND, and it would be spleen-rupturingly hard to find out.
• So let’s look at the extra money that’s been ‘earmarked for SEND’ via the High Needs Block. What does it cover, and how can we track what it’s been used for?

Tracing and tracking un-ringfenced SEND funding

The High Needs Block funds all sorts of things at the more complex end of SEND. If your child or young person has an EHCP, then it’s very, very likely that their education relies on the HNB for funding – either in part, or in whole. Sometimes, HNB funding also supports pupils and students without EHCPs too.

If your child goes to a special school or college, or a mainstream resource base or unit, or gets a lot of additional support in mainstream or further education, then their placement will draw on funding from the High Needs Block. Sometimes, HNB funding will also support alternative provision, and pupils who aren’t educated in schools. And it usually funds outreach teams of SEND specialists, such as teachers of the deaf.

When they pumped this extra £780m ‘for SEND’ into the system, the government didn’t specifically ringfence it as a separate input. They added the £780m to the High Needs Block, for local authorities to distribute.

That means we can’t trace what’s happened to this £780m line by line, as we could for SEND reform implementation money. But there are ways we can see what difference the £780m has made to funding levels at the front line.

Back To The Bands

When local authorities dole out SEND funding to schools and colleges from the High Needs Block, the vast majority of them use some form of home-grown banding system, loosely based on pupil need. We’ve covered banding before on SNJ – if you want a guide to how banding works, read this article from a few years ago.

A few weeks ago, I asked local authorities what changes they’d made to their banding systems since the £780m arrived – in particular, whether they’d changed the value of the individual bands they use to reflect the extra money they were now getting. Remember, the High Needs Block is now 12% bigger than it was last year – so have LAs boosted the value of their bands, passing the extra revenue on directly at an individual place level?

In most cases, the answer is no.

Just a quarter of the LAs who answered had increased the values of their high needs bands in 2020-21. 

• About a dozen LAs – councils like Bedford, Cornwall, Coventry and Plymouth – have made big increases to their band values, passing on most of the extra money they received at an individual place level.
• But most of the councils that did increase band values did so only by a couple of percent. Once you factor inflation in, this will not have made much – if any - positive difference at place level.

In all, roughly two-thirds of the LAs who answered made no changes at all to their banding values, despite having somewhere between 8% and 16% more high needs money to play with this year. 

• Worse still, most LAs in this category haven’t increased their band values at all for at least three years – and in many cases, for at least five years.
• It’s important to remember that keeping band values static is effectively a cut. The costs to schools and colleges of making provision at the front line don’t stay still. Inflation means that costs rise, and COVID-19 has made costs rise further still.

In theory, none of this should matter at all if your child or young person has an EHCP. Section 42(2) of the Children & Families Act clearly states that the local authority “must secure the specified special educational provision for the child or young person” in the EHCP. It’s the LA’s duty to make sure the provision is adequately funded.

In practice, things are very different. EHCPs don’t often contain tightly specified provision. Some LAs tell schools that EHCPs don’t automatically come with funding, and others push funding shortfalls down to school level. So what happens with these band values makes a big difference. 

What does this mean for children?

What does this mean practically, for individual children? Here are a couple of examples. Let’s say your child is in mainstream in an LA in the East of England. Their needs are stable and predictable, and they need full-time 1:1 support from a teaching assistant. This provision’s written into their EHCP, and provision is delivered as written in the EHCP (yes, I know). 

• If you live in an LA that made big increases to its band values this year, then the funding that the school gets from the LA to put the TA support in place for the individual child will have gone up by a lot – somewhere in the region of £1,500. That’s after years of no increases at all, mind – but it makes a difference.
• If you live in an LA that received millions in extra High Needs Block funding but made no increases at all to its band values, then your school will get no extra top-up funding at all for your kid. Nada. If the school have had funding for this support at a particular band, and that band hasn’t changed in value for five years, then inflation means that this band buys far less support now than it did in 2015.

Let’s say you’ve got a child who goes to a state special school for the deaf. Where you live already matters a lot. There aren’t many of these schools around the country - and thanks to the magic of the postcode lottery, the funding levels for near-identical specialist provision already vary hugely from LA to LA. 

Add the banding into the mix, and the postcode lottery effects widen further:

• If your child goes to a special school for the deaf in one of the West Midlands local authorities, and has a typical need profile for that school, then the school will probably have got roughly £2,000 extra funding to make your child’s education work this year.
• If your child goes to a near-identical special school for the deaf in a local authority in the South West, their school will receive nothing extra this year per pupil – it’ll still be funded using banding levels that were set years ago, and weren’t adequate even then.

Put simply, what the LA banding data tells us is this: if you’ve already got a child with high-needs SEND in the state sector, then in most cases, the additional £780m that the government has pumped into high-needs SEND this year will have made no difference at all to the amount of high needs money the school gets to educate your child. 

And at worst, your child will be getting less help. Take Tower Hamlets, which got a whopping 14% increase to its High Needs Block allocation this year – and is planning to slash specialist support for deaf children by half.

Where on earth is the cash going?

At this point, it’s tempting to go thermonuclear. If most LAs aren’t passing the extra £780m on at place level – if some of them are still cutting support, despite double-digit percentage increases – then what the hell are they doing with the extra money? Are they just blowing it on luxury conferences and emotional support barristers? Why is the high needs SEND funding pipeline functioning about as effectively as a fatberg-clogged sewer?

While it may be tempting to go thermonuclear, I don’t think it’s right to go thermonuclear. I’ve done 18 years in the SEND system. Every single year, I’ve been told that there’s no money. For most of that time, the people telling me that were lying. 

But right now, there really is a financial crisis in SEND. The additional £780m isn’t enough to stem the crisis, and it’s probably arrived too late to turn things around.

Deficit thinking

Local authorities get a bit of choice in how to spread high needs money around. But they get no real choice in how much high needs money they get, and the way high needs funding levels are calculated by Whitehall complicates things further. 

Over the last few years, and through gritted teeth, many LAs have ended up spending more money on high needs SEND than government gave them. 

I spent a bit of time in lockdown looking at financial data. In the financial year that’s just gone (2019-2020), 95% of local authorities I looked at spent more on high needs SEND than they were given by central government. Collectively, in 2019-2020 this difference came to around £650m.

Parents know well that local authorities aren’t short of tools, and LAs have had a well-equipped toolbox to apply to problems like this. They’ve been able to shift money around within the education funding blocks. They’ve been able to draw on education funding reserves – or at a pinch, the council’s own reserves. 

And of course, there are nastier tools in the LA toolbox – policies, processes, and organisational behaviours that fall well short of lawful conduct. We’ve covered these at length on SNJ, so I won’t dwell on them further here. Using these tools, councils were able to narrow the difference between high needs budgets and high needs spending last year – but only by a bit. In the bloodless, dehumanised terminology of council finance, their collective in-year high needs ‘overspend’ for 2019-2020 ended up at around £540m.

However, councils can’t use some of these tools any longer. Central government has limited councils’ ability to shift money around – and in most LAs, their financial reserves are now exhausted. From the financial data, it looks like 70% of local authorities are now running a deficit on their Designated Schools Grant – almost entirely down to funding shortages in the High Needs Block. And under the terms of the grant, local authorities have to pay their deficits back.

At the same time, more and more children and young people with SEND need sustained high needs support than ever before. That’s happening for a lot of reasons, too many to go into here. You’ll find this repeatedly described and demeaned as ‘parent-led demand’, like it’s a pair of Balenciaga shoes, rather than something a child or young person needs and depends on to avoid permanent and severe damage to their life chances. 

But it’s undeniable that this additional need exists, that it’s becoming more expensive to meet some of this need, and that the financial costs of meeting this need currently fall mostly on the High Needs Block.

At a broad level, this is where most of the £780m in extra funding has gone. It’s been used to pay back deficits, to avoid going into deficit, to spread financial jam a bit wider than before, and a bit thinner than before. A very small number of LAs have been able to expand the quality as well as the quantity of what they offer, thanks to this extra funding – but that’s all.

Ultimately, it looks like this record increase in funding hasn’t been enough. 

• Although the extra funds have allowed most LAs to improve their in-year High Needs Block financial position, over 80% of them are forecasting that they’ll spend more money on high needs SEND this year than they get from government. 
• The forecast numbers are very volatile, but the predicted in-year shortfall for the 2020-21 High Needs Block looks like it’ll be in the region of £350m-£450m. 

So what happens next?

Local and central government are currently in a delicate dance about how to handle these deficits. As things stand, LAs have to pay the deficits back in full – typically over three years. Central government has hinted that they might be willing to show a bit of flexibility over payment terms, but the dance is happening out of sight of parents, carers, schools and colleges. 

The High Needs Block will increase in size again in April 2021, by around £700m. Again, that’s a big increase – but funding allocation at local level will probably still be in catch-up mode at that point.

What’s left in the local government toolbox? Some councils have been able to secure extra capital funding to expand specialist placements – and longer-term, there’s more to come. There’s the banding system – this is why so many bands have stayed unchanged this year, despite so much more money coming in.

And then, of course, there’s the dodgy policies, processes, and organisational behaviours. Unless accountability improves, these aren’t going away any time soon, and they’ll become increasingly important as the toolbox empties.

More ominously, as the remaining tools in the local authority toolbox can’t do the job, then pressure is building to make the job easier. The Department for Education has been lobbied heavily by the dimmer, low-wattage end of local government to relax some of their SEND duties permanently, so that they can balance their books. 

The Department for Education itself has a SEND review underway that will apparently address funding allocation. Details are almost non-existent, but the DfE hasn’t ruled out changes to SEND law.

Does any of this matter?

This is dry, desiccated stuff. But it matters. Finance shapes the way that players in this system think about and consider risk. The way that these players frame and assess risk is genuinely depressing, and is genuinely part of the problem.

In researching this article, I read several hundred local and central government papers on education finance. All of these papers flagged serious funding shortfalls with the High Needs Block. Almost all of them flagged up the financial risk that high needs SEND spending posed to organisations – to school budgets, to wider council funding, to the financial reputational credibility of the council.

A tiny handful of papers flagged up the risk that the local authority might – might - end up failing to meet its statutory obligations to children and young people with SEND. Yes, I know.

But I didn’t find a single paper that considered the risk that this financial crisis posed to children and young people with SEND themselves. The likelihood of failure to meet their needs on a large scale. The impact on those children and young people if their needs weren’t met on a large scale. What difference such failure makes to their current lives, their prospects for the future, and in a few cases, their very survival.

The way humans with power chose to frame risk matters. It’s why the SEND funding increase arrived too late. It’s why the SEND funding increase can’t be deployed effectively. It’s why so much of public sector discourse around SEND is abstract and dehumanised. 

And very few people with power and influence want to tackle this. Because it would be themselves they’d have to change, not the people they are supposed to be serving.

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Also read:

• What does ‘£700 million for SEND’ actually mean in reality?
• Battle of The Bands: The rise of ‘banding’ for funding SEND
• SEND funding “completely inadequate,​” says Education Select Committee report
• The DfE wants to stop LAs filling SEND funding gaps
• Are Early Years funding changes destroying nursery SEND provision?
• The Government’s proposals for SEND funding could be disastrous for vulnerable children

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Matt Keer

Matt (he/him) has two deaf children. He has over 20 years of experience grappling with the SEND system as a parent, and he’s seen the best and the worst that the SEND system offers.
Matt specialises in SEND stats, data analysis, and in-depth investigations of policies. He has given evidence to several Parliamentary Select Committee inquiries, and his articles for SNJ on SEND funding, local government policy, and the SENDIST Tribunal have been quoted in Select Committee inquiry reports and national media.

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