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1 School funding reform: Next steps towards a fairer system Improving arrangements for funding pupils and students with high needs: Additional illustrative.

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Presentation on theme: "1 School funding reform: Next steps towards a fairer system Improving arrangements for funding pupils and students with high needs: Additional illustrative."— Presentation transcript:

1 1 School funding reform: Next steps towards a fairer system Improving arrangements for funding pupils and students with high needs: Additional illustrative information

2 2 Introduction The case for reforming high needs funding

3 3 Introduction On 26 March, we published School funding reform: Next steps towards a fairer system. The school funding document set out a range of reforms that will improve current education funding arrangements, including for pupils and students with high needs aged from birth to 25 in the school, AP and FE sectors. This set of slides provides additional illustrations of the high needs funding reforms announced in School funding reform: Next steps towards a fairer system in diagrammatic form. Full explanation of the high needs funding reforms can be found in Chapter 3 and Annexes 5A-5C of the school funding document. Where appropriate, cross-references have been provided.

4 4 The current funding system LA 2 YPLA LA 1 DfE PRU INMSS Special school Special Academy Mainst. school Mainstr. Academy FE collegeISP DSG – paid to LAs Pre-16 funding Post-16 funding – paid to YPLA Post-16 funding Post-16 national funding formula Post-16 high-level additional learner support Post-16 LLDD placement budget SEN 16-18 Block Grant Academy funding Different types of providers are funded in entirely different ways. This means that local authorities face different levels of additional costs when placing a pupil or student. Post-16 provision is funded differently according to whether a young person remains in a school or enters FE at 16. There are also three different high needs funding systems post-16 (the 16-18 SEN Block Grant, high- level ALS, and the LLDD placement budget), each with their own rules and regulations. Current arrangements for funding high needs provision in Academies are complex, error-prone and bureaucratic. As the number of Academies grows, these arrangements will become unsustainable. The current process of inter-authority recoupment is bureaucratic and costly. It does not foster dialogue about a pupils needs, provision and progress between commissioners and providers. Three different funding systems post-16 PRUs do not have delegated budgets Complex Academy funding arrangements Place-led funding Paid through fees Formula funding Inter-authority recoupment

5 5 The case for reform Funding arrangements in which all providers are funded on an equivalent basis – education provision for a high needs pupil is funded in a comparable way whatever the form of institution they attend. Remove the awkward divide at 16 according to whether a young person stays in a school or enters FE Create a sustainable long-term basis for funding high needs pupils in Academies and Free Schools Remove potential perverse financial incentives inherent in the current funding system Avoid bureaucratic processes getting in the way of focus on a pupils needs and progress High needs education funding pre-16 and post-16 is brought together so as to support the development of an integrated approach to assessment and planning from birth to 25. Funding is genuinely responsive to individual pupils and students needs – there is greater flexibility with regard to the use of funding, and clear, non-bureaucratic processes that support commissioning focused on the needs of the young person. There is clear and transparent information about available provision so as to improve choice for young people and their families.

6 6 Overview of the high needs funding reforms This section includes Figure 1 from School Funding Reform: Next steps towards a fairer system, and uses this to provide a brief overview of the key reforms in the pre-16 mainstream, pre-16 specialist SEN, AP and post-16 sectors.

7 7 Overview: Reform of high needs funding Element 1: Core education funding Element 2: Additional support funding Element 3: Top-up funding Mainstream settings Pre-16 SEN and AP Specialist settingsAll settings Post-16 SEN and LDD Top-up funding from the commissioner to meet the needs of each pupil or student placed in the institution Mainstream per-pupil funding (AWPU) Contribution of £6,000 to additional support required by a pupil with high needs, from the notional SEN budget Base funding of £10,000 for SEN and £8,000 for AP placements, which is roughly equivalent to the level up to which a mainstream provider would have contributed to the additional support provision of a high needs pupil. Base funding is provided on the basis of planned places. Mainstream per-student funding (as calculated by the national 16-19 funding system) Contribution of £6,000 to additional support required by a student with high needs This diagram appeared as Figure 1 (p.43) of School funding reform: Next steps towards a fairer system.

8 8 Pre-16 mainstream settings Element 1: Core education funding Element 2: Additional support funding Element 3: Top-up funding Top-up funding from the commissioner to meet the needs of each pupil placed in the institution Mainstream per-pupil funding (AWPU) Contribution of £6,000 to additional support required by a pupil with high needs, from the notional SEN budget Providers will continue to receive a clearly-identified notional SEN budget as part of their delegated budget. This budget will be provided by the maintaining local authority (for maintained schools) or the EFA (for Academies). From this funding, mainstream providers will be expected to contribute the first £6,000 of the cost of additional educational support required by a high needs pupil. By additional education support, we mean the support a pupil requires above what would be funded by mainstream per-pupil funding. To illustrate, if a school received AWPU of £4,500, the contribution a mainstream setting would be expected to make would be £10,500 (AWPU+£6,000). If the AWPU was £5,500, the contribution would be £11,500 (again, AWPU+£6,000). Top-up funding will be: provided direct to the provider from the commissioning local authority; provided in or close to the pupils real-time movement; and be based on the pupils assessed needs. Mainstream placements for pre-16 high needs pupils refer to placements in mainstream schools and mainstream Academies – in settings where there is not a designated place set aside specifically for pupils with high needs (See section 3.5).

9 9 Pre-16 specialist SEN settings Element 1: Core education funding Element 2: Additional support funding Element 3: Top-up funding Top-up funding from the commissioner to meet the needs of each pupil placed in the institution Base funding of £10,000 for, which is roughly equivalent to the level up to which a mainstream provider would have contributed to the additional support provision of a high needs pupil. Base funding is provided on the basis of planned places. Providers will receive base funding of £10,000 for an agreed number of planned places. This will be the only factor that can be used in setting the place-led funding of a specialist setting. This will ensure that: there is broad equivalence of funding for high needs provision across mainstream and specialist settings; and all pre-16 specialist high needs provision is funded on an equivalent basis. This budget will be provided by the maintaining local authority (for maintained schools) or the EFA (for Academies). Prior to the implementation of these new funding arrangements, we will work with local authorities to ensure information about the number of planned places in each institution is accurate (see section 3.10). Thereafter, there will be simple process for ensuring that the number of funded places is reviewed at least every two years and, if necessary, adjusted (pp.68-70). Top-up funding will be: provided direct to the provider from the commissioning local authority; provided in or close to the pupils real-time movement; and based on the pupils assessed needs. Specialist placements for pre-16 high needs pupils refer to placements where there is a designated place set aside specifically for pupils with high needs. These include special schools, special Academies, special Free Schools, and special units / resourced provision in mainstream settings (see section 3.6). We are considering the route through which independent and non-maintained special schools will receive base funding within these funding arrangements (see p.61).

10 10 Pre-16 specialist AP settings Element 1: Core education funding Element 2: Additional support funding Element 3: Top-up funding Top-up funding from the commissioner to meet the needs of each pupil placed in the institution Base funding of £8,000. Base funding is provided on the basis of planned places. Providers will receive base funding of £8,000 for an agreed number of planned places. The reasons for setting the level of base funding for the AP sector at £8,000 are set out in Next steps towards a fairer system (paragraph 3.6.5, and pp.65-66). This budget will be provided by the maintaining local authority (for maintained schools) or the EFA (for Academies). Prior to the implementation of these new funding arrangements, we will work with local authorities to ensure the information about the number of planned places in each institution is accurate (see section 3.10). Thereafter, there will be simple process for ensuring that the number of funded places is reviewed at least every two years and, if necessary, adjusted (pp.68-70). Regulations to allow PRUs to hold delegated budgets should be in place by April 2013. State-funded specialist AP settings for pre-16 high needs pupils include maintained PRUs, other maintained AP, AP Academies and AP Free Schools. Where a pupil is placed in an independent AP setting, the commissioner would notify the EFA of this placement and would receive the base funding, which could then be passed on to the provider with the fees for the placement (see p.65). Top-up funding will be: provided direct to the provider from the commissioning local authority; provided in or close to the pupils real-time movement; and based on the pupils assessed needs.

11 11 Post-16 settings (mainstream and specialist) Element 1: Core education funding Element 2: Additional support funding Element 3: Top-up funding Top-up funding from the commissioner to meet the needs of each pupil or student placed in the institution Mainstream per- student funding (as calculated by the national 16-19 funding system) Contribution of £6,000 to additional support required by a pupil or student with high needs Post-16 high needs provision will be funded in an equivalent way across all provider types. This budget will be provided by the maintaining local authority (for maintained schools) or the EFA (for all non-maintained settings). All providers will receive an allocation of mainstream per-student funding calculated by the national 16-19 funding formula – this recognises the different programmes of learning that young people access. All providers will receive an allocation of additional support funding of £6,000 for each high needs student placed with them. The allocation will be calculated using student numbers from the last full academic year. As at present, specialist providers will be able to request that their allocations are reviewed if their current number of students is significantly higher than their lagged numbers. As such, for a student on a course costing £5,500 per year, the provider would contribute £11,500 (course cost plus £6,000), while for a student on a course costing £4,000, the providers contribution would be £10,000. The contribution to the cost of a students additional education support will be consistent, however, at £6,000. We will provide further information about element 1 (the national post-16 funding system) that will enable local authorities to re- model provider budgets in terms of elements 1, 2 and 3 shortly. Top-up funding will be: provided direct to the provider from the commissioning local authority; provided in or close to the pupils or students real-time movement; and based on the pupils or students assessed needs.

12 12 Funding flows for providers The diagrams in this section reflect the explanations of funding for different types of providers set out in Annex 5C of School Funding Reform: Next steps towards a fairer system.

13 13 Funding flow: Placement in a mainstream school / Academy EFA Maintaining local authority Schools Block Early Years Block High Needs Block Mainstream maintained school Element 1Element 2Element 3 EFA Local authority Schools Block Early Years Block High Needs Block Mainstream Academy Element 1Element 2Element 3 In the example of the maintained school above, the maintaining local authority is also the commissioning local authority. The funding for elements 1 and 2 received by mainstream maintained schools and Academies would include separate allocations for pre-16 pupils and post-16 pupils. For maintained schools, these would be passported through the maintaining local authority. For Academies, this would be received direct from the EFA – there is a misprint in the document and we apologise for any confusion (p.82). Top-up funding above this level would be provided from the commissioning local authority, using their High Needs Block.

14 14 Funding flow: Placement in a maintained special school (1) This diagram represents the funding flow for a maintained special school in instances where the maintaining local authority is also the commissioning local authority – for example, where a local authority is placing a high needs pupil in a special school that it maintains. For the special school, elements 1 and 2 of its funding (£10,000 per place pre-16, national 16-19 funding formula plus £6,000 post-16) would be passported through the maintaining local authority as part of a separate place-led allocation within the authoritys High Needs Block (see section 3.6.11). The school would then receive top-up funding from the commissioning local authority, from the authoritys High Needs Block. The diagram would also represent the funding flow for special units / resourced provision in mainstream maintained schools. EFA Local authority Schools Block Early Years Block High Needs Block Maintained special school Element 1Element 2Element 3 Place-led funding Pupil-led funding

15 15 Funding flow: Placement in a maintained special school (2) EFA Commissioning local authority (A) SBEYBHNB Maintained special school Element 1Element 2Element 3 Maintaining local authority (B) SBEYBHNB This diagram represents the funding flow for a maintained special school in instances where the commissioning local authority is not the maintaining authority – for example, where local authority A places a pupil in a special school maintained by local authority B. This diagram would also represent the funding flow for special units / resourced provision in mainstream maintained schools. For the special school, elements 1 and 2 of the schools funding would be passported through the maintaining local authority. The EFA will make an initial one-off adjustment to the High Needs Block of the commissioning local authority so that the commissioning authority was meeting the full cost (elements 1, 2 and 3) of the placement. The school would then deal directly with the commissioning local authority with regard to the top-up funding, and would receive this direct from the commissioning authority. These direct funding relationships will replace the current system of inter- authority recoupment. Place-led funding Pupil-led funding

16 16 Funding flow: Placement in a special Academy or special Free School EFA Commissioning local authority Schools Block Early Years Block High Needs Block Special Academy / Free School Element 1Element 2Element 3 This diagram represents the funding flow for a special Academy or special Free School. This diagram would also represent the funding flow for special units / resourced provision in mainstream Academies. For the special Academy (or Free School), elements 1 and 2 of the schools funding would be passported to the special Academy direct from the EFA. The EFA will make an initial one- off adjustment to the High Needs Block of the commissioning local authority so that the commissioning authority was meeting the full cost (elements 1, 2 and 3) of the placement. The special Academy would then deal directly with the commissioning local authority with regard to the top-up, and would receive this funding direct from the commissioning authority. Under the current system, the EFA would have to recoup the special Academys budget from the former maintaining local authority and then use this to pay the special Academy. The former maintaining authority would then recoup funding from other local authorities that placed pupils at the special Academy. Under the new place-plus approach, these complex and bureaucratic processes will be replaced by (a) base funding from the EFA and (b) direct funding relationships between the Academy and commissioning local authorities. Place-led funding Pupil-led funding

17 17 Funding flow: Placement in a PRU or other maintained AP Maintained AP settings will receive a base level of funding of £8,000 per planned place. For maintained providers, this funding will be passported to them through the maintaining local authority. Top-up funding above this level will be provided by the commissioning local authority (or mainstream school / Academy) from the commissioning local authoritys High Needs Block. The diagram on the left shows the funding flow where the maintaining authority is also the commissioning authority, while that on the right shows the funding flow where the commissioning authority is not the maintaining authority. Place-led funding Pupil-led funding EFA Commissioning local authority SBEYBHNB Maintained AP / PRU Element 1Element 2Element 3 Maintaining local authority SBEYBHNB EFA Local authority Schools Block Early Years Block High Needs Block Maintained AP / PRU Element 1Element 2Element 3

18 18 Funding flow: Placement in an AP Academy or AP Free School EFA Commissioning local authority Schools Block Early Years Block High Needs Block Special Academy / Free School Element 1Element 2Element 3 This diagram represents the funding flow for an AP Academy or AP Free School. For the AP Academy (or Free School), elements 1 and 2 of the schools funding would be passported to the AP Academy direct from the EFA. The EFA will make an initial one-off adjustment to the High Needs Block of the commissioning local authority so that the commissioning authority was meeting the full cost (elements 1, 2 and 3) of the placement. The AP Academy would then deal directly with the commissioning local authority (or mainstream school or Academy) with regard to the top-up, and would receive this funding direct from the commissioner. Under the current system and interim funding arrangements for AP Academies, the EFA would have to recoup the AP Academys budget from the former maintaining local authority and then use this to pay the AP Academy. The former maintaining authority would then recoup funding from other local authorities that placed pupils at the AP Academy. Under the new place-plus approach, these complex and bureaucratic processes will be replaced by (a) base funding from the EFA and (b) direct funding relationships with commissioners. Place-led funding Pupil-led funding

19 19 Funding flow: Placement in an AP Academy by a mainstream maintained school EFA Local authority SBEYBHNB AP Academy Element 1Element 2Element 3 This diagram represents the funding flow for an AP Academy where the commissioner is a mainstream maintained school. Under the current statutory framework, mainstream schools / Academies have commissioning responsibilities where pupils are (a) excluded for a fixed period or (b) placed in AP for the purpose of early intervention or off- site direction. The AP Academy would receive base funding of £8,000 per planned place from the EFA. It would then receive the top-up funding from the commissioning school. It would be a matter for local agreement as to whether and how the local authority delegated some of its High Needs Block to mainstream schools. We stated in the school funding document that the mainstream school would also repay the AWPU received for that pupil to the local authority in which it was based (see p.66). We are considering this carefully as we would not want to create a potential perverse financial incentive to exclude a pupil permanently. Place-led funding Pupil-led funding Mainstream school

20 20 Funding flow: Placement in a FE college or ISP EFA Commissioning local authority Schools Block Early Years Block High Needs Block ISP Element 1Element 2Element 3 FE colleges and ISPs would receive an allocation of (a) mainstream per-student funding calculated by the national 16-19 funding formula and (b) an allocation of additional support funding of £6,000 per high needs student. These allocations would be based on the data from the last full academic year. This funding would be received by providers direct from the EFA. Top-up funding above this level would be provided from the commissioning local authority, using their High Needs Block. Place-led funding Pupil-led funding EFA Commissioning local authority Schools Block Early Years Block High Needs Block FE College Element 1Element 2Element 3

21 21 Illustrative examples The diagrams in this section provide diagrammatic representations of some of the illustrative examples set out in Annex 5B of School funding reform: Next steps towards a fairer system. Each slide has the same title as the example in the document to which it refers.

22 22 Example A: Placement of a pupil in a mainstream maintained school EFA Local authority Schools Block Early Years Block High Needs Block Mainstream maintained school Element 1Element 2Element 3 Pupil A is 4½ years old and has complex SEN. Pupil A has been assessed as requiring provision that will cost £16,000. The mainstream school has received £3,000 for each pupil on roll (element 1). The school will contribute £6,000 from its notional SEN budget (element 2). The school therefore makes a contribution of £9,000 towards the cost of provision for Pupil A (elements 1 and 2). The local authority therefore pays a top-up of £7,000. It funds this from its notional High Needs Block. Top-up funding is paid direct to the provider in or close to the real-time movement of the pupil. In this example, the maintaining local authority is also the authority commissioning provision for the pupil.

23 23 Example B: Placement of a pupil in a special Free School Pupil B is 6 years old and has complex SEN. Pupil B has been assessed as requiring provision that will cost £22,000. The special Free School has received base funding of £10,000 for each planned place at the Free School. It has received this funding direct from the EFA. This base funding is broadly equivalent to the level up to which a mainstream provider would be expected to contribute towards the cost of education provision for a high needs pupil. The local authority therefore pays a top-up of £12,000. It funds this from its notional High Needs Block. Top-up funding is paid direct to the provider in or close to the real-time movement of the pupil. EFA Local authority Schools Block Early Years Block High Needs Block Special Free School Element 1Element 2Element 3

24 24 Example C: Placement of a pupil in a special Academy in a neighbouring local authority Pupil C is 9 years old and has high-level SEN. Pupil C lives in local authority X, which maintains their Education, Health and Care Plan. Local authority X has assessed pupil C as needing provision costing £15,000. Pupil C is placed in a special Academy in local authority Y. The special Academy has received base funding of £10,000 for each planned place at the special Academy. It has received this funding direct from the EFA. The commissioning local authority (LA X) pays a top-up of £5,000. It funds this from its notional High Needs Block. Top-up funding is paid direct to the provider, having discussed funding as part of a full dialogue about the pupils needs, provision, and expected progress. EFA LA X School s Block Early Years Block High Needs Block Special Academy Element 1Element 2Element 3 LA Y Under the existing system, funding would have been provided initially through LA Y (the former maintaining authority). This would have been recouped by the EFA, and then paid to the special Academy. When LA X placed a pupil in the Academy, LA Y would then recoup funding on the Academys behalf from LA X. LA Y may also charge a administration fee to LA X for carrying out the recoupment. There may be limited or no dialogue about the pupils needs, provision and expected progress.

25 25 Example G: Placement of a pupil in a mainstream early years setting EFA Local authority Schools Block Early Years Block High Needs Block Mainstream early years setting Element 1Element 2Element 3 Pupil G is 4 years old and has high needs above what is normally available in the mainstream nursery that she attends. Pupil G has been assessed as requiring education support that will cost £5,000 above what is normally available in the nursery. The nursery has received funding for 15 hours of early education, as calculated by the Early Years Single Funding Formula. This funding would come from the local authoritys Early Years Block. The local authority therefore pays a top-up of £5,000 from its High Needs Block. Top-up funding is paid direct to the provider in or close to the real-time movement of the pupil. In this example, the maintaining local authority is also the authority commissioning provision for the pupil. Mainstream early years settings do not receive the equivalent of a notional SEN budget. Local authorities will need to ensure that there is clarity, through their local offer, about what mainstream early years settings will provide for high needs pupils using funding for the 15 hours of early education.

26 26 Example H: Placement of a student in a mainstream FE college Student H is 17 years old and has high needs. Student H has been assessed as requiring education provision that will cost £18,000. The course that student H wishes to study costs £4,000. The college will be expected to meet the costs of this course from its allocation through the national 16-19 funding formula. The college receives this from the EFA. The commissioning local authority therefore pays a top-up of £8,000. It funds this from its notional High Needs Block. Top-up funding is paid direct to the provider in or close to the real-time movement of the student. EFA Commissioning local authority Schools Block Early Years Block High Needs Block FE College Element 1Element 2Element 3 The college has also received an allocation of additional support funding from the EFA. This is based on the numbers of high needs students attending the college in the last full academic year. From this allocation, the college is expected to contribute £6,000 towards student Hs educational support costs. The college would therefore be expected to contribute £10,000 towards students H provision. This is made up of (i) the cost of student Hs course (£4,000) and (ii) a contribution of £6,000 towards the cost of student Hs additional education support.

27 27 Example I: Placement of a student in an ISP Student I is 18 years old and has high needs. Student I has been assessed as requiring education provision that will cost £40,000. The course that student I wishes to study costs £7,000. The ISP will be expected to meet the costs of this course from its allocation through the national 16-19 funding formula. The ISP receives this from the EFA. The commissioning local authority therefore pays a top-up of £27,000. It funds this from its notional High Needs Block. Top-up funding is paid direct to the provider in or close to the real-time movement of the student. EFA Commissioning local authority Schools Block Early Years Block High Needs Block FE College Element 1Element 2Element 3 The ISP has also received an allocation of additional support funding from the EFA. This is based on the numbers of high needs students attending the ISP in the last full academic year. From this allocation, the ISP is expected to contribute £6,000 towards student Is educational support costs. The ISP would therefore be expected to contribute £13,000 towards student Is provision. This is made up of (i) the cost of student Is course (£7,000) and (ii) a contribution of £6,000 towards the cost of student Is additional education support.

28 28 Example J: A mainstream school places a pupil in an AP Free School EFA Local authority SBEYBHNB AP Free School Element 1Element 2Element 3 Mainstream school Pupil J is 12 years old. The mainstream school that pupil J attends wishes to place the pupil in an AP Free School for the purposes of early intervention. The mainstream school and the AP Free School have agreed that the pupil will require provision that would cost £12,000 per annum. The mainstream school has received AWPU of £4,500 for each pupil on roll from the maintaining local authority. The AP Free School has received base funding of £8,000 for each planned place in the Free School from the EFA. The mainstream school would therefore pay a top-up of £4,000 to the AP Free School. This figure represents the difference between the total cost of the placement (£12,000) and the level of base funding that AP Free School has already received (£8,000). Top-up funding would be paid directly by the mainstream school to the AP Free School, and in or close to the real time movement of pupil J. As mentioned in an earlier slide, we are considering carefully whether the mainstream school would repay AWPU in this instance. We would not want to create a potential perverse financial incentive to exclude a pupil permanently. If the placement was for less than one school year, the amount paid by the mainstream school would be pro rated.

29 29 Example K: A pupil is excluded permanently EFA Local authority SBEYBHNB AP Free School Element 1Element 2Element 3 Mainstream school Pupil K is 14 years old and has been excluded permanently from a mainstream school. Under the current statutory framework, the local authority is responsible for arranging and funding suitable full-time provision for pupil K. The local authority wishes to place pupil K is an AP Free School. The placement will cost £12,000. As in Example J, the mainstream school has received per-pupil AWPU of £4,500, and the AP Free School has received base funding of £8,000 for each planned place. The commissioning local authority would pay a top-up of £4,000 to the AP Free School. This figure represents the difference between the total cost of the placement (£12,000) and the level of base funding that AP Free School has already received (£8,000). Top-up funding would be paid directly by the local authority to the AP Free School, and in or close to the real time movement of pupil K. The mainstream school would repay the AWPU it had received for pupil K to the local authority in which it was located. This happens at present under the current School Finance Regulations. When pupil K is readmitted to a mainstream school, the school would receive AWPU for that pupil for the remainder of the financial year, pro rated, as occurs at present. If the placement was for less than one school year, the amount paid by the commissioning local authority would be pro rated.

30 30 Additional illustrative examples The diagrams in this section provide diagrammatic explanations of some of the additional examples that we have developed or responses to questions that we have been asked since the publication of School funding reform: Next steps towards a fairer system.

31 31 Reworking the budget of a maintained special school EFA Local authority Schools Block Early Years Block High Needs Block Maintained special school Element 1Element 2Element 3 DfE Local authority Maintained special school At present, the special school is funded for 100 places. In 2012-13, it is funded through a formula including place funding, premises funding, deprivation funding and a lump sum. The total delegated budget is £1.5m. Current systemNew funding arrangements To rework the special schools budget into base funding and top- up funding, the maintaining local authority would calculate the current place value. This is £15,000 per place (total budget of £1.5m divided by the number of places of 100). Each of the 100 planned places would attract base funding of £10,000. The final step is to calculate the amount of top-up funding for the pupils placed there. If the authority uses a flat-rate top-up, the top-up funding per-pupil would be £5,000 (the previous place value of £15,000 minus the base funding of £10,000 per place). If the authority funded the school at different values in 2012-13, say £13,000 and £17,000, it would provide top- ups of £3,000 and £7,000. This would add back up the schools 2012-13 total budget.

32 32 Additional transitional protection for a special school in year one EFA Local authority Schools Block Early Years Block High Needs Block Maintained special school Element 1Element 2Element 3 The example on the preceding slide is based on the assumption that the budget of the special school in 2013-14 would be the same as the budget in 2012-13. If, however, the local was reducing funding for the special school in 2013-14, they would need to do this in line with the additional transitional protection arrangements we set out in the school funding document (see paragraph 1.5.9). This stated that we would set, as a condition-of-grant, that the level of top-up funding provided to a special school by the maintaining local authority (or former maintaining local authority for special Academies) would be such that, were all high needs pupils in that setting placed by that local authority, the schools total funding for 2013-14 would not be more than 1.5% below the funding that the school had received in 2012-13. If there was a single level of place funding in 2012-13, the top-up in 2013-14 would be £4,775. If, as in the preceding slide, there were two levels of provision, and thus two different levels of place funding in 2012-13, in 2013-14 the value of each would be reduced by £4,775/£5,000 = 0.955. The value of the two top-ups would then be £2,865 (rather than £3,000) and £6,685 (rather than £7,000). The target for the budget is therefore £1.5m x 0.985 = £1,477,500. The base funding – of 100 places at £10,000 = £1m – is fixed, so the top-up funding has to add up to £477,500. It is important to note that this additional protection applies to pupils placed by the maintaining or former maintaining local authority. When funding the placement of a pupil in schools that an authority maintains or used to maintain, the level of per-pupil top-up funding in 2013-14 must be such that the sum of base and top-up funding would not be more than 1.5% less than the place value (total budget divided by the total number of places) in 2012-13.

33 33 A small mainstream primary school receives a significantly higher number of pupils with SEN that is not reflected in the local formula EFA Local authority Schools Block Early Years Block High Needs Block Mainstream primary school Element 1Element 2Element 3 In this example, a small primary school has 50 pupils on roll (see p.60). Over time, they develop a reputation for providing excellent provision for pupils with high-level SEN. As a result, more parents wish for their children to attend this school. In 2015-16, the school admits a significantly higher number of pupils with high-level SEN than they have in the past. They are concerned that this is not adequately reflected in their formula funding. The school has received an allocation of funding, calculated by their local formula. This includes a notional SEN budget. This has been calculated using a combination of prior attainment, deprivation, and basic entitlement. As set out in the local offer, the school is expected to contribute the first £6,000, in addition to AWPU, to the costs of provision for high needs pupils. The local authority and local schools and Academies have agreed a set of circumstances in which extra funding could be provided by the local authority in situations like this one. In this instance, the local authority agrees that the school does need funding in addition to that which they have received through their formula allocation. As such, they are able to use their notional High Needs Block flexibly in order to meet local need most effectively.

34 34 Greater consistency in levels of delegation of SEN funding to mainstream schools Current positionFuture position The diagram above shows two local authorities aligning their current approaches to delegating SEN funding. For the purposes of this example, we have assumed that the level of AWPU in both local authorities is £4,000. EFA Expected to contribute up to £12,000 from delegated budget IARs above £12,000 Local authority A SBEYBHNB Local authority B SBEYBHNB Expected to contribute up to £8,000 from delegated budget IARs above £8,000 EFA Expected to contribute up to £10,000 from delegated budget Top-up funding above £10,000 Local authority A SBEYBHNB Local authority B SBEYBHNB Expected to contribute up to £10,000 from delegated budget Top-up funding above £10,000 At present, levels of delegation of SEN funding to mainstream schools vary across different local authorities. We have recommended that local authorities bring such approaches into line. Our strong recommendation is that local authorities construct their mainstream formula so that mainstream settings are expected to contribute the first £6,000 of additional support for high needs pupils (see p.60). This is £6,000 above AWPU.


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