Consultation on school funding reform: Next steps towards a fairer system A summary for the Special Educational Consortium Closing Date: Monday 21 May 2012 Full consultation: here 1) Creating a local funding formula DfE is proposing that local authorities have a continuing role in setting the local funding formula which allocates funding to schools in the local authority area. This local funding formula will determine the amount both maintained schools and academies receive. The factors local authorities can use to determine their funding formula is being reduced from 37. In future, there will only be 10 factors. The relevant factors are: A basic per-pupil entitlement; Deprivation measured by FSM and/or the Income Deprivation Affecting Children Index (IDACI); Looked after children; Low cost, high incidence SEN; English as an additional language (EAL) for 3 years only after the pupil enters the compulsory school system; A lump sum of up to £150,000. The factors only include reference to ‘low cost, high incidence SEN’. Is this likely to ensure schools are properly resourced to meet the reasonable needs of all children with SEN? DfE’s intention is that as much as possible of the total amount of school funding should be distributed through the basic per-pupil entitlement factor. This is in order that funding is clearly seen to follow the pupil. At the moment, the total amount of school funding distributed as the basic perpupil entitlement varies: DfE is proposing to set a minimum percentage of total school funding which much be distributed as the basic per-pupil entitlement. This would mean that all local authorities would need to distribute at least the specified percentage of their total funding through their basic entitlement. The greater percentage which must be distributed as part of the basic per-pupil entitlement factor, the smaller the percentage that can be distributed using the other factors. A threshold that is set too high could mean that too little funding can be made available for deprived pupils, children with SEN etc… The DfE puts forward three possible options: a) Setting a minimum threshold that relates to funding for the basic entitlement only. They think that 60% would represent a reasonable starting point for this threshold; b) Setting a minimum threshold which relates to funding for all of the pupil-led factors (so would include the basic entitlement, deprivation, looked after children, low cost SEN and EAL). They think that 80% would represent a reasonable amount for this threshold; and, c) Not setting a threshold at all at this point and accepting that there will continue to be variation across the country. Do any of these options have particular advantages or disadvantages for disabled children or children with SEN? 2) Distributing funding for low cost, high incidence SEN Local authorities will still be able to use SEN as a factor in their funding formula. Each school will therefore have a notional SEN budget that they can use to make additional support available for individual children where costly interventions are not required. This notional SEN budget will also be used to fund the first £6,000 of any child that needs more expensive educational support. At present, local authorities distribute funding to low-cost SEN pupils in a number of ways. For example, some use a complex combination of proxies such as FSM, pupil mobility and prior attainment. Others use a separate SEN lump sum to capture a wide range of SEN need in a particular school. Because SEN is sometimes hard to pin-point, the methods used are wideranging and variable. DfE is removing the ability of local authorities to use children at School Action or School Action Plus as a means of distributing funding as this gives perverse incentives to identify children as having SEN. DfE recognises that some low-cost SEN will be covered through deprivation funding, but that this will not be sufficient to properly target this group of children. DfE that argues that prior attainment, if used appropriately, can be used as a proxy to pick up those children not identified through the deprivation measure. Is a combination of deprivation measures and prior attainment suitable for identifying children for low cost, high incidence SEN? a) using achievement in the Early Years Foundation Stage Profile to distribute funding in Primary schools Under the current EYFSP, a child is ‘developing well’ if he or she scores 78 points across all areas of learning and development. The 2011 data shows that 61% of pupils with SEN do not achieve 78 points and are therefore not ‘developing well’. DFE argues that this is not a perfect measure of SEN, but it does give us a reasonable threshold which captures most SEN pupils who are underachieving Is this a suitable way of identifying children with low cost, high incidence SEN in Primary schools? b) using achievement in Key Stage 2 results to distribute funding in secondary schools DfE states that if a pupil achieves Level 3 or below in both English and mathematics, then that pupil is likely to be in need of additional support. DfE’s analysis shows that 38% of pupils with SEN achieve Level 3 or below (with the other 62% of pupils achieving above that threshold). Is this a suitable way of identifying children with low cost, high incidence SEN in secondary schools? 3) Funding for children who require higher levels of support Funding for an individual child with SEN in a school will be made up of three parts: Core element (school): the basic unit of per-pupil funding distributed to all schools in a local area. This will be around £4,000 per pupil. Additional Support element (school): a clearly identified part of each school’s budget to provide additional support for pupils with additional needs. This will be distributed to individual schools, along with the basic unit of per-pupil funding, based on the local formula. DfE is recommending that this should be up to £6,000 per pupil with additional needs. High Needs element (local authority): if required, this is top-up funding held the by the local authority above the school level elements to meet the total cost of the provision required by an individual pupil. This will be provided from the High Needs Pupil Block DfE intends to set the amount schools will be expected to fund from their Additional Support element as anything up to £6,000. DfE will be ‘strongly recommending’ that local authorities use this £6,000 threshold but it will be up to local areas to decide. The £6,000 that schools would be expected to contribute from their additional support budget is on top of the core funding schools would spend on any individual pupil. Schools will therefore have to show they have spent roughly £10,000 (£6,000 + £4,000) on a child before the local authority would be expected to fund support from their High Needs budget. DfE envisages that top-up funding will be given to providers on a per-pupil or per-student basis and will flow directly between the commissioner and provider. If a school has a larger number of children who require higher levels of support, DfE is recommending that arrangements should be made for providing additional up-front funding to such mainstream schools or Academies from their High Needs Block. Is this a workable model for ensuring schools have the necessary resources to meet the first £6,000 for children who require higher levels of support? 4) Calculating the high needs block The Government’s intention is to bring together all education funding for high needs pupils and students from birth to 25. The High Needs Block will bring together funding for pupils with SEN pre-16 and learning difficulties and/or disabilities (LDD) post-16. It will also include funding for pupils placed in alternative provision (AP). DfE propose that the notional High Needs Block would use, as a baseline, the 2012-13 budgeted spend on high need pupils and students. This is drawn from the 2012-13 Section 251 Budget Statements, and the 2011/12 information on student numbers and spend on high needs students aged 1625 in further education (FE) providers and independent specialist providers held by the Young People’s Learning Agency/Education Funding Agency. Existing Section 251 Budget Statements will not include money delegated to schools. In areas where there are high levels of delegation, what further work needs to be done to ensure the High Needs Block accurately reflects local need? Are there any problems with the Young People’s Learning Agency/Education Funding Agency’s figures on Additional Learner Support? DfE are considering whether this block should be adjusted by population projections in future. DfE has also confirmed SEN transport will also be within the notional High Needs Block. What other factors should DfE take account of when calculating the high needs block in future? 5) The ‘place-plus’ model of funding specialist provision DfE are proposing a radical change to the model of funding specialist provision – by specialist provision we mean all types of special schools, specialist units attached to mainstream schools, post-16 independent specialist providers, and alternative provision. Currently, specialist provision maintained by local authorities is funded for a set number of places each year rather than for the number of children who actually attend. The reason for this is that it is assumed provision of this cost and complexity cannot readily be switched on and off, so it is necessary to pay for the place and staffing and then look to fill the places as far as possible. The DfE plans for all types specialist provision to be funded for a set number of places at £10,000 for each child. This sum is considerably less than the average cost of a special school place but mirrors the £10,000 mainstream schools will be expected to provide out of their own budgets before the local authority takes up the funding. Local authorities who then place children in the special school academy will have to top up the £10,000 to cover whatever the value of the placement is. The school would be responsible for recouping the money from local authorities. In order to prevent disagreement between the local authority and provider over the exact amount of the top-up, DfE sees an important role for banded funding. Are these proposals likely to impact on any particular type of specialist provider more than others? Is this approach more or less likely to help providers and local authorities focus on outcomes? 7) Establishing schools’ SEN budget and the links with the local offer Each local authority maintains a Schools Forum to represent its schools' views on matters relating to the schools' budgets. The Schools Forum is made up of head teachers, local authority representatives and others. Local authorities and Schools Forums agree the local funding formula that is used to distribute the funding between maintained schools in that authority. The Government is planning to reform Schools Forum as part of the wider funding changes. DfE is clear that School Forum arrangements for establishing what funding is held by schools for SEN are closely linked to the development of the local offer proposed in the Green Paper (i.e. what schools are expected to provide out of their delegated SEN budget). Maintained schools, Academies and post-16 providers will need to agree with the local authority what they will typically provide without additional funding and to communicate this to parents. DfE recognises that this discussion may need to go beyond schools, colleges and the Schools Forum to include representatives of parents and local charities and voluntary organisations. Are there any reforms to Schools Forums that are required to ensure they can fulfill their role in relation to developing the local offer? Matthew Dodd, April 2012