Councils are unhappy about the Government's message that they cannot rely on schools block funding to address rocketing special needs and disabilities (SEND) deficits. Dan Peters reports

Pressures on the high needs budget have led to more and larger overspends in recent years. Latest figures from the Department for Education (DfE) show that there are now 354,000 children with an education, health and care plan (EHCP) in England, an increase of 11% in 2018 alone.

In Torbay, one in 20 school-aged children are in receipt of an EHCP – the highest proportion in the country.

But Torbay is not alone. The number of new EHCPs has increased each year since their introduction in 2014 and the Local Government Association can find no reason to suggest that this rise in demand will be reversed.

Faced with this challenge, the DfE last year asked 32 councils to submit a plan outlining how they would recover their special educational needs and disabilities (SEND) deficits within three years. A number of these councils relied on ‘substantial' transfers from their schools block to their high needs block in an attempt to recover their deficits.

But the Government has reiterated that there will be a limit on how much councils will be able to move out of the dedicated schools grant (DSG).

The edict comes as the Government changes the rules to ban councils from funding any part of their SEND deficits from sources other than the DSG without the authorisation of the education secretary.

But ESFA has told Stoke-on-Trent – as well as Cambridgeshire CC, Southwark, Hillingdon, Kensington & Chelsea and Kingston upon Thames LBCs, Slough and Wokingham councils – that, due to the additional £780m high needs funding it found last year, it expects there will be no need to transfer funding and to reconsider.

Councils are not happy. Wokingham's executive member for children's services, Cllr UllaKarin Clark, said: ‘Like many local authorities across England, we responded to changes in legislation and have appropriately increased the levels of services that we provide for children with SEND, but have not received the additional funding from central government in order to underpin these changes.

‘Recent announcements of additional funding have been welcomed, but do not go far enough to bridge the gap between the demand for services and the resources available.'

Kingston's portfolio holder for children's services, Cllr Diane White, added: ‘The current funding committed by the Government does not meet the increasing demand.' Cambridgeshire, which is forecasting a cumulative deficit on its high needs education budget of up to £17m by the end of this financial year, has written to all its MPs in an effort to lobby the Government for more funding.

Chair of the council's children and young people committee, Conservative Simon Bywater, said: ‘There's more money coming into the system, but when you look at the system in place there's not enough.'

Deputy mayor of Salford City Council, John Merry, added: ‘Salford has lost 51% of its core Government funding since 2010 while seeing demand for SEND services and support soar in that time, so this funding – while welcome – is a mere drop in the ocean.'

In a letter to Hillingdon LBC, ESFA's Owen Jenkins said the council's DSG deficit recovery plan ‘appears unrealistic' and wrote: ‘Due to the additional funding in high needs we expect that the need to transfer funding from the schools block to the high needs block will need to be reconsidered. If, after careful modelling of the additional funding you still believe that there is a requirement to make a reduced transfer from the schools block and need to apply to the secretary of state for a disapplication, your recovery plan will be taken into consideration.

‘Any request will need strong evidence that will be reviewed in line with the published criteria, with decisions made on a case-by-case basis.'

A recent DfE consultation response read: ‘The department expects that most of those local authorities with a DSG deficit will be able to bring their high needs budget into in-year balance and go on to recover the deficit by managing their expenditure within the larger DSG total.

‘The department recognises that this process will be difficult for some local authorities. We recognise also that there may well be some local authorities that, even if they can stabilise their in-year expenditure on high needs, will still not be able to pay off their historic deficit within a reasonable time. The department will remain in contact with those local authorities that have significant DSG deficits in order to offer advice and help on their future handling.'

Councils that were eyeing up their schools block may need to think again.