Reforming High Needs Funding Implications for Providers Mark Dale-Emberton

Principal : Charlton Park Academy London Chair: Federation of Leaders of Special Education

February 2013

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The rationale for high needs funding reform

     Some perverse financial incentives are inherent in the current funding system An awkward divide at age 16 and totally different funding systems for a young person in a school or in FE An increasingly diverse range of providers, including Academies and Free Schools, for which equitable funding arrangements are needed A need to make sure that limited funding is distributed effectively and efficiently, and that scarce resources are not wasted A timetable for reform alongside mainstream funding reform (pre- and post-16) because of the interactions

Funding flow: Placement in a mainstream school / Academy

EFA EFA Maintaining local authority

Schools Block Early Years Block High Needs Block

Local authority

Schools Block Early Years Block High Needs Block Element 1 Element 2 Element 3 Element 1 Element 2 Element 3

Mainstream maintained school Mainstream Academy

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.

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The objectives of high needs funding reform

Funding arrangements in which all providers will be funded on a broadly equivalent basis High needs education funding pre-16 and post-16 will be brought closer together – supports the wider proposals for a coherent system serving children and young people aged 0-25 Greater clarity, consistency and transparency about school/college provision, responsibilities and funding Funding more responsive to individual pupil and student needs and their movement between education providers – balance between a base level of funding that gives stability and recognises providers’ fixed costs, and funding that follows the pupils and students

What the whole system looks like

Pre-16 SEN and AP Mainstream settings Specialist settings Post-16 SEN and LDD All settings Element 1: core education funding Element 2: additional support funding

Mainstream per-pupil funding (AWPU) Other formula funding in school/Academy budget, enabling contribution of £6,000 to additional support required by a pupil with high needs, from notional SEN budget Base funding of £10,000 per place for SEN and £8,000 for AP, roughly equivalent to the level up to which a mainstream provider will contribute 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 formula ) Additional funding of £6,000 per place enabling contribution to additional support required by a student with high needs

Element 3: top-up funding

“Top-up” funding from the local authority (or school, in the case of AP) commissioning the placement to meet the needs of each pupil or student placed in the institution 5

Top-up funding

How is top-up funding intended to work?

• A per-pupil/student amount • Based on pupil/student assessed needs and the setting • Flowing directly from the LA commissioner to the provider • Follows the pupil close to their real-time movement

Will top-up funding be specific to each individual pupil/ student, or can a flat rate be used?

Will this mean that providers receive different top-up rates from different local authorities?

Top-up funding arrangements are a matter for local determination. Flat rates can be used. Local authorities may also choose to work with local banding frameworks, to facilitate management of top-up funding. Top-up funding, however, must reflect a pupil’s/student’s needs and the cost of the provision they receive in a particular setting. This could happen, but we are encouraging local authorities to work together to plan and commission provision on a consistent basis, and to work with their providers, including colleges, schools and Academies, to agree top-up funding rates.

Will the school or college set the top up funding rate, or the local authority?

This has to be a matter for agreement between the provider and LA. The provider will know best what it can offer and what its costs are. The LA (or school in the case of AP) as commissioner decides what is best for the individual and what provision gives best value for money, and can specify that in an SEN statement. Simple funding agreements should be developed.

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Key issues for mainstream schools

Key principle is equal treatment of maintained schools and Academies, using the same simplified formula, devised by the local authority using limited number of factors, and agreed through the local schools forum Notional SEN budget nothing new This uses proxy indicators – it is not meant to be a fixed sum that can be “used up” Strong recommendation to converge on £6,000 as the additional support cost threshold beyond which top-up funding is applied: for some LAs this may mean delegating more funding to schools, for others less Flexibility for LAs to target additional funds from their high needs block to schools and Academies which have disproportionately large numbers of high needs pupils which the formula doesn’t recognise (eg beacons of excellence) – allocation principles need to be agreed locally Authorities can continue existing arrangements where AP budgets are delegated or devolved to mainstream schools and Academies 7

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Key issues for specialist providers

Important to agree with commissioning LAs a realistic estimate of places for high needs pupils/students needed next year. Non maintained special schools and independent specialist providers will have place-led base funding direct from the EFA.

Top-up funding – can be calculated with reference to the costs of both the child’s support and the provider (if a school has a hydrotherapy pool or residential accommodation then the costs will be higher for some or all of the pupils).

Minimum change options available for 2013-14.

Transitional arrangements for maintained special schools and special Academies – top-up funding rate must ensure no more than 1.5% reduction in total budget if all places filled by maintaining (or former maintaining) authority. Protection doesn’t apply cross-border.

Maintained special schools and special Academies will have to adapt to new approach to budget planning. Their budget share from the maintaining LA will only be place funding. The rest of their annual budget will come from top-up funding, and will depend on the take-up 8 and occupancy of the funded places.

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Key issues for post-16 providers

Calculation of base funding for post-16 places (elements 1 and 2) different from pre-16 place-led funding: all post-16 provider types treated the same and base funding will include allocation of per student funding calculated by the national post-16 formulae.

Because the funding year starts in August 2013, post-16 funding allocations will not be confirmed until March 2013.

Between April and July 2013 post-16 funding will remain as now. Special school 6 th forms (and special units with post-16 students) will get £10,000 per place funding from April for the agreed number of places. Adjustments to the per place amount from August will ensure no less than £10,000 per place for the agreed place number.

All providers will receive an allocation of additional support funding of £6,000 for each high needs student place. The starting point for this calculation has been student numbers from 2011/12.

EFA currently in the process of agreeing 2013/14 place numbers with LAs and providers: significant increase declared in some areas – not able to accommodate that within overall budget despite increase of 9 per cent.

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Feedback questions (1)

Mainstream providers (schools and colleges)

 From the information available so far, will your local funding formula (or the post-16 national formula) provide an adequate level of base funding so that the school/college can meet low level needs and a contribution to high needs amongst its pupil/student population?

 If not, what discussions have you had with the relevant LAs about how they will help with the costs?

 How will you describe the provision that parents and young people can expect from the school/college, without recourse to top-up funding, and ensure that it is part of the local authority’s local offer?

Feedback questions (2)

Specialist providers (special schools, colleges or units)

 What place planning issues are you facing, and how are you managing local discussions to make sure that estimates are soundly based?

 What are the reasons for any increase in places that has been reported?

 How are you planning to manage under- or over-occupancy of places?

Top-up funding

 How are discussions about top-up funding progressing? Have rates been proposed or agreed yet?

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Next steps for Providers

Review and be aware of the impact of the new funding arrangements will be on both your setting and that of others in your area.

 Ensure that local commissioners are clear about place planning about 2013/14 and 2014/15 and 2015/16 and have considered and modelled demographic and local factors.

 Ensure that commissioners have communicated these clearly with the Providers to ensure that financial risks can be managed well by both parties. Model the effects of getting the strategy wrong.

  Ensure that Heads, finance managers and governors are aware of the need for multi-year financial modelling and the implications for the organisational health of the provider over time. Consider how well you can currently do this and what if any aspect of your strategic financial management may require strengthening.

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Next steps for providers

Ensure that local decision making is transparent and democratic through strengthened School Forum arrangements- what decisions are being made and what do you know about them? How best can high needs be met efficiently and effectively locally over time.

 Consider setting up joint working parties to ensure that the LA and providers have strategic discussions to ensure that place planning and financial planning are in line with both parties expectations, including the introduction of the Single Plan framework.

 Consider the implications of meeting high need pupils when PCT may be reducing community based provision due to budgetary targets of their own. 13

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Next Steps (cont)

What provision does the school forum need to consider commissioning in addition in order to meet other needs of High Need pupils statements. E.g. Physiotherapy, Occupational Therapy, Speech and Language therapy?

Ensure that you model and consider the impact of both your staffing and curriculum activities.

Consider place planning and the local school forum decisions and that the LA and provider are clear about the strategic impact of those decisions over multi-year budget setting.

Ensure that the financial risks are carefully considered and align your financial strategy with sustainable structures and activities under a value for money review and framework Consider whether there are or could be any unintended consequences of these reforms and if so what may those be. Alert the regional EFA officers if you have concerns or your professional organisations to represent High Need provider and ultimately pupils interests.

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Next steps- cont

Ensure that your organisation is mindful of the economic climate and the continued pressures on ensuring that all providers become more efficient and effective over time whilst improving the outcomes for all young people.

Consider how well you know your costs of provision, how you can improve efficiency and ensure that new initiatives are sustainable and affordable.

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Consider how to manage changes to ensure that there is greater choice and stability for parents and pupil, particularly when parents become more active purchasers of a choice and range of services.

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Consider how you can raise awareness with other providers about the impact of any changes and how collectively you can best manage future changes.

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Next steps cont…

Consider what training, support and advice may be necessary for providers to effectively manage the steps towards a national funding formula for high need pupils. Let representatives and the EFA know.

Keep well informed by keeping all developments under careful review and read guidance from the EFA.

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Ensure that you develop multi-year funding forecasting models and carefully follow suggestions made by expert guidance from your professional organisations.

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Follow up…

 If you have any follow up questions or concerns please contact and discuss them with your professional representatives from ACSL or NAHT, or FLSE or NASS and [email protected]

All organisations have regular meetings with the EFA and the Department of Education over the proposed reforms and all parties are keen to ensure that a national funding formula is developed and implemented during the next spending review period in a prudent way.

FAQs A comprehensive list of frequently asked questions on funding reform is available at: www.education.gov.uk/schools/adminandfinance/financialmanagement/scho olsrevenuefunding/a00205567/school-funding-reform-and-arrangements for-2013-14 17

SEN Providers please contact re funding issues…..

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Mark Dale-Emberton: Principal Charlton Park Academy [email protected]

of Leaders of Special Education and London Rep of Federation

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School Funding Reform: Arrangements for 2013-14 The document ‘School Funding Reform: Arrangements for 2013-14’ is available to view on the DfE website via the following link:

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www.education.gov.uk/schools/adminandfinance/financialmanagement/school srevenuefunding/a00205567

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