1. High needs funding changes: a threat or opportunity? Russell Ewens Funding Policy Unit

2. The context for changes to high needs funding Special educational needs (SEN) and disability  The Children and Families Act 2014  The SEN and disability Code of Practice  Local authorities’ implementation of the SEN and disability reforms Alternative provision  A mixed landscape of provision  White Paper indicated future changes to make schools more responsible for AP

3. Rationale for reform  Current high needs spending levels have evolved partly as a result of the variation in commissioning and funding which the local authority has developed with the schools, colleges and early years settings in its area  Isos Partnership undertook research and reported with proposals published in July 2015  Building on that research, we concluded that in order to support the improvement of outcomes for children and young people with SEN and those in alternative provision, further changes to high needs funding distribution should be made

4. Distribution of funding Directly to institutions  National post-16 funding formula – can reflect programme costs and address some students’ additional needs, but not all  National funding formula for mainstream schools in future – as above  Early years – to be decided To local authorities  Funding to enable local authorities to discharge remaining statutory responsibilities  Key functions retained for vulnerable children and young people – children in care and those with SEN and disabilities  Commissioning linked to funding

5. Question for consultation: Do you agree that the majority of high needs funding should be distributed to local authorities, rather than directly to schools and other institutions?  Funding covers a wide range of needs which require different kinds of support, best decided locally  Spending decisions should be taken at the level at which statutory assessment and planning is taken Yes  Central funding system would be fairer, and would not rely on variable local authority capacity and expertise  Spending decisions should be separate from statutory assessment and planning, and commissioning to avoid conflicts of interest No

6. High needs funding formula design

7. Transition In order to ensure a smooth transition we proposed:  to include an element of 2016-17 planned spending on high needs in the national formula for at least the next 5 years to give local authorities time to plan and implement changes, and so they don’t have to disrupt current placements and provision. We have just collected information from local authorities on their 2016-17 high needs budgets to use for this formula factor  to set an overall minimum funding guarantee that would not reduce local authorities’ high needs funding by more than a specified percentage in each year (paid for as necessary by capping/damping gains

8. Other consultation feedback received  No local authority should lose funding because of the potential impact on actual provision for young people, and the sustainability of that provision  Formula for distributing high needs funding to local authorities does not take sufficient account of 19-25 year olds  Concern about the impact on specialist provision if a “presumption towards mainstream” is taken too far, and that young people’s choice of where they study could be undermined  Keen on proposal for a flat rate for place funding in specialist post-16 institutions, but would want to consider a £11,000 per place rate, rather than £10,000

9. Threat or opportunity? When written in Chinese, the word “crisis” is composed of two characters. One represents danger and the other represents opportunity.John F Kennedy  Greater conflict and disconnect between local authorities and institutions  Young people’s needs and choices are overlooked in the drive to save money  Valuable specialist provision is lost because some local authorities can no longer afford it Threat  More partnership working between local authorities and institutions  Funding is more closely matched to the needs of young people  Specialist providers adapt to new funding distribution and offer improvements to local authorities that have more high needs funding to spend Opportunity

10. Sharing of financial health information  Financial health is an EFA measure of an institution’s status in terms of its financial performance and ability to meet financial commitments  EFA undertakes an annual assessment which categorises an institution’s financial health as: outstanding, good, satisfactory or inadequate  informed by the most recent accounts submitted to Companies House/Charity Commission  EFA will share with each special post-16 institution its financial health category  sent to the principal and chair  during late April and annually thereafter