Funding schools by formula has been applied across a number of countries for at least the past 50 years. A National Funding Formula (NFF) in England was introduced in 2018 and aims to provide a platform for fair funding. Northern Ireland, Scotland and Wales have all held successful referendums on devolution in the late 1990s and now have devolved powers for education and special education. The English NFF has four funding blocks: schools, high needs, early years and central services. This blog post follows our recent article which  explores variations in the National Funding Formula high needs block (HNB) to local authorities and also examine the use of specialist provision for pupils with special educational needs and disability (SEND) (Marsh et al., 2024).

Our research builds on a previous study commissioned by the SEN Policy Research Forum (SENPRF, 2019). Introduced in 2018/19 with the complementary aim to gradually reduce the differences in per-pupil funding between similar local authorities (LAs), the NFF aims to address the imbalance in funding levels in different parts of the country. However, LAs and voluntary organisations have expressed widespread concerns about the funding levels available for provision and services for children with SEND, despite a £3.5 billion (75 per cent) increase in real terms since 2013 (Marsh et al., 2024, p. 3). The government’s SEND and alternative provision improvement plan (DfE, 2023) fails to acknowledge ongoing inequities in funding received by comparable LAs.

According to National Audit Office data, 122 local authorities (81 per cent) overspent their high needs budgets in 2017/18 (NAO, 2019), a figure which has reportedly risen to 131 LAs (87 per cent) (see Jayanetti, 2021). The government has now agreed to target authorities with the largest HNB deficits by inviting them to take part in the Safety Valve or Delivering Better Value (DBV) programmes, which aim to bring the overspending under control (Schools Week, 2023). As at July 2023, there were 34 signed Safety Valve agreements between the DfE and LAs, with a further five LAs taking part in 2023/24 (TES, 2024) and another 55 LAs participating in the DBV initiative.

Our research shows that some of these overspending LAs are already relatively well funded compared to their statistical neighbours. There is limited incentive for other authorities to manage their deficits, given that overspending LAs are being bailed out. Our findings indicate that, despite extra money coming into the system, funding is still largely determined by history, that is by the amount of money local authorities were spending on high needs when the Dedicated Schools Grant was first created more than a decade ago.

‘There is limited incentive for other authorities to manage their deficits, given that overspending LAs are being bailed out.’

The seventh version of the National Funding Formula has now been published and the HNB funding for 2024/25 now varies by up to £49 million in comparator LAs (Marsh et al., 2024, table 5). The differences continue to be related to the use of a historical factor and the implementation of a funding floor and gains cap. Importantly, our study also identifies a link between the amount of funding going to a local area and the amount of specialist provision being allocated to pupils in those areas.

In conclusion, SEND in England is at a crossroads. There is an ongoing dialogue about the level of funding for SEND provision, as witnessed in the recent UK House of Commons debate on 11 January 2024. The next UK government will have to re-examine the SEND landscape and seriously consider whether the present Children and Families Act 2014 (part 3) is fit for purpose within the context of inclusion, equity and budget sustainability.

This blog post is based on the article ‘Fair funding for pupils with special educational needs and disability in England?’ by Alan Marsh, Peter Gray and Brahm Norwich, published in the British Educational Research Journal.

References

Department for Education [DfE]. (2023). Special educational needs and disabilities (SEND) and alternative provision (AP) improvement plan.

https://www.gov.uk/government/publications/send-and-alternative-provision-improvement-plan

Jayanetti, C. (2021, May 15). Councils in England facing funding gaps plan to cut special needs support. Guardian. https://www.theguardian.com/education/2021/may/15/councils-in-england-facing-funding-gaps-plan-to-cut-special-needs-support

Marsh, A.J., Gray, P. & Norwich, B. (2024). Fair funding for pupils with special educational needs and disability in England? British Educational Research Journal. Advance online publication. https://doi.org/10.1002/berj.3954

National Audit Office [NAO]. (2019). Support for pupils with special educational needs and disabilities in England. https://www.nao.org.uk/reports/support-for-pupils-with-special-educational-needs-and-disabilities/ 

Schools Week. (2023, March 16). Council SEND deficit bailouts hit £1bn as 20 more issued. https://schoolsweek.co.uk/council-send-deficit-bailouts-hit-1bn-as-20-more-issued/  

SEN Policy Research Forum [SENPRF]. (2019). Variation in High Needs Block allocation to English LAs. https://senpolicyresearchforum.co.uk/wp-content/uploads/High-Needs-research-summary-website-pdf-nw-20-July-21.pdf

TES. (2024, January 5). DfE in bid to sign 5 new SEND bailout deals. https://www.tes.com/magazine/news/general/dfe-5-new-send-funding-council-bailout-deals