Does the SEND Safety Valve scheme have a future under the Labour Government? And if so, who’s next?

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The new government has plenty in its in-tray. That in-tray includes SEND (below), and one of the things at the top of the teetering SEND pile will be funding.

That’s a wrap on my first week as Education Secretary.

Here’s what I’ve done in that time 👇 https://t.co/zGPHBz8C4u
— Bridget Phillipson (@bphillipsonMP) July 13, 2024

Most people agree there are huge problems with SEND funding in England. The Department for Education (DfE) currently has two SEND financial intervention schemes underway. The most significant of those is known as Safety Valve.

Safety Valve has been running for years – we reported on it as early as 2021, before any other media had picked up on it. There are 38 local authorities currently in the Safety Valve programme. You can find a list of them here, and an interactive version of the map below here.

Safety Valve LAs. Interactive version here

Safety Valve 101

We’ve covered Safety Valve extensively on SNJ already, but to summarise:

Many local authorities have run up deficits on their education funding. This is almost always because they have spent more on high-needs SEND than Whitehall has given them.
The Department for Education invites local authorities with the highest education funding deficits to join Safety Valve;
Each LA comes up with a plan showing how they can reduce and ultimately eliminate their deficits. If the DfE likes the plan, then the Safety Valve agreement proceeds. IPSEA has investigated these plans, and has the same, deep concerns as SNJ.
In a Safety Valve agreement, the DfE agrees to provide bailout funding payments to the LA over several years, sometimes supplemented by council cash too. In return, the LA agrees to meet DfE financial targets and conditions that change the way its SEND services are run—with an emphasis on cutting costs and constraining demand.
The LA reports back to DfE at least three times per year. If the LA fails to meet the terms of the SV agreement, the DfE bailout money either slows or stops, and, like Darth Vader on Bespin, the DfE can alter the deal.

Before the general election, the DfE appeared to be satisfied with the progress of Safety Valve. In May 2024, the DfE’s Permanent Secretary told the previous House of Commons Public Accounts Committee the department was “seeing some really good progress from councils” with Safety Valve and its lighter-touch financial intervention companion, Delivering Better Value in SEND.

Since 2022, the DfE has also tried to collect case studies from LAs showing the benefits that Safety Valve has brought. For some reason, the DfE has yet to publish any of those good news stories.

Parents and professionals on the front line do not share the same view as the DfE. As of July 2024, three separate legal challenges were being progressed against Safety Valve agreements.

Our own research tells us LAs are more likely to refuse EHC needs assessments (particularly from families) once they have joined Safety Valve, and that LAs in this scheme are more likely to have made sharp real-terms cuts to the high-needs funding that schools get at a per-pupil level.

What’s the future of Safety Valve?

At the time of writing, the new government hasn’t said anything about what it plans to do with the Safety Valve programme. Prior to the election though, the DfE was clearly planning to extend it for at least one more year. In December 2023, the last Minister for Local Government wrote to the chair of a parliamentary Select Committee, stating that “DfE is working with a further five councils through the [Safety Valve] programme at present and expect to do so again in 2024-25.”

In April this year, the DfE renewed the position of Chief Advisor to the Safety Valve Programme – a contract worth up to £50,000 that went to the consulting firm of Tony McArdle, an ex-LA leader who has been closely associated with the programme for years. Mr McArdle has clear views, and it’s safe to say we don’t share them.

The Chief Advisor contract specs were terse and partially redacted, but they included the following:

“The Supplier will be required to provide advice to the Department pertaining to the strategy, structure and management of negotiations conducted through the safety valve intervention programme… …In 2024-25, we expect this will cover work on <REDACTED> new negotiations with Local Authorities. Extensions in future financial years could cover a number of Local Authorities yet to be determined.”

So in the absence of a declared policy change, it’s probably wise to expect that more local authorities will be summoned to the Safety Valve walk of shame in the next few months. So who might those LAs be?

Who’s might be next? We follow the money…

Safety Valve is a financial intervention scheme. So to work out which LAs are next up, we ploughed through local authority financial reporting.

One of the key metrics for Safety Valve is the deficit that a council has on its Dedicated Schools Grant account. The DSG is the main financial vehicle for distributing education funding from central government to local government.

We looked at DSG financial out-turn data for the end of 2023-24. A lot of these figures are still provisional, and some are forecasts. Official figures won’t be available until January next year. But the ball-park figures showed us the following:

At the end of the 2022-23 financial year (March 2023), two-thirds of English local authorities had a deficit on their DSG. Their combined deficits stood at £1.6 billion.
In the 2023-24 financial year (April 2023 to March 2024), local authorities probably spent around £900 million more than the DSG funding they received.
Some of that in-year deficit was reduced by Safety Valve bailout payments from the DfE and individual councils – probably by around £230 million…
…but at the end of March 2024, over 70% of LAs had accumulated a deficit position on their DSG – and the combined total of those deficits probably stood at around £2.2-2.3 billion. That’s the biggest cumulative deficit ever, and – despite Safety Valve – the biggest in-year increase in that deficit ever.

Click to enlarge. Accessible version (MS PDF)

It’s hard to argue that Safety Valve is succeeding, even on its own desiccated terms. And no one should be ignoring the human impact of this policy. But even if you do ignore it, Safety Valve is not actually releasing much financial pressure and things are likely to get financially tighter for most LAs this year without a rapid and sharp policy shift. DSG budgets for 2024-25 are already set, and they’re not much bigger than last year’s. Meanwhile, most of the bailout money in the existing Safety Valve schemes has already been allocated – check the chart below.

Click to enlarge. Accessible PDF (MS PDF)

Promoted

Double down or scrap the Safety Valve?

So one question that the new government might end up grappling with is whether to double down on the Safety Valve policy, or whether to scrap it entirely.

Another question will be whether to keep these DSG deficits in their current legal state of financial limbo, whether to let them fall back onto council balance sheets in 2026 – something that will financially break a few councils – or whether to write the deficits off entirely. We have no idea what the new government will decide here.

With all that in mind, how can we work out which LAs might be lined up for a new Safety Valve invite this year?

Lining up the SEND Safety Valve suspects

English local authorities vary massively in size and population. So the main metric that the DfE uses when doling out Safety Valve invitations isn’t the absolute size of a council’s deficit, it’s how big the deficit is proportionately.

We don’t know how many LAs might be invited to join Safety Valve this year, but it’s unlikely to be more than a few. and not every LA invited will necessarily choose to join. If the new government decides that none will join, then none will join. And after 2024-25, any decisions made will follow a cross-government Spending Review.

But our numberwang gives us a reasonable idea of who might be in the frame for Safety Valve this year.

First up – there are two LAs –

Bournemouth, Christchurch & Poole (BCP) and
Cheshire East,

Both of these LAs were invited to join Safety Valve last year, but both ultimately failed to make the cut. Their DSG deficits have continued to grow, so it’s likely that all parties involved will double-drop some bureaucratic Viagra and try to consummate a deal this year. The other likely candidate LAs include:

Sefton
Hampshire
East Riding of Yorkshire
Dudley
West Sussex

These LAs are also outside bets:

Stockport
Worcestershire
Suffolk
Solihull

We wouldn’t normally flag up things like this without harder data. But it might take a while before national SEND policy becomes clearer, so past precedent suggests that invites might be coming out very soon, and the secrecy around Safety Valve negotiations is becoming increasingly tight.

In 2023-24, one local authority, Bristol, negotiated a Safety Valve agreement in complete secrecy. We think it’s important that families of children and young people, and the professionals that support them, get as much advance warning as possible.

If you’re interested in learning more about what local groups have done to learn about Safety Valve and make their views known, then this article is worth reading. There are parents who are trying to campaign against the programme: if you are interested in joining them, read this.

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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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