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Special Educational Needs: Finance

Question for Department for Education

UIN 73736, tabled on 12 November 2021

To ask the Secretary of State for Education, if he will remove the cap on gains under the High Needs Block within the National Funding Formula.

Answered on

22 November 2021

High needs funding is the money the department distributes, mainly to local authorities, for children and young people with the most complex needs. The department announced in summer 2021 that high needs funding will increase nationally by £780 million, or 9.6%, in 2022-23 compared to the 2021-22 financial year; this follows the increase of more than £1.5 billion over the previous two years. This will bring the total high needs funding we allocate to £8.9 billion, an increase of over a third since 2019-20.

On top of this, the 2021 Spending Review settlement includes an additional £1.6 billion for schools and high needs in the 2022-23 financial year, on top of the funding we previously announced. The department will confirm in due course how we will allocate this additional funding for 2022-23, and what local authorities’ high needs allocations for 2023-24 and 2024-25 will be.

The increase next year that we announced in the summer means that every local authority will attract an increase of at least 8% per head of 2-18 population, with some local authorities seeing increases of up to 11%. Leeds Council will be receiving a maximum increase of 11% per head on the amount of high needs funding allocated in the 2021-22 financial year. This amounts to a provisional high needs funding allocation of over £108 million in 2022-23, and that does not yet include an allocation of the additional funding the department has available from the 2021 Spending Review.

In setting the limit on gains, the department considers the distribution of funding across all local authorities, including how many are on the minimum percentage increase. This distribution balances improving fairness according to the high needs national funding formula (NFF), with ensuring that every local authority attracts a significant increase to help with the cost pressures they are facing. The table below shows the significant year-on-year increases that Leeds Council has been receiving since 2018-19 and the reducing impact of the limit on their NFF gains, as well as how the £20.8 million adds the differences each year between the provisional NFF allocations with and without the formula gains capped.

See note 1 below [1]

2018-19

2019-20

2020-21

2021-22

2022-23

A. Limit (cap) on per head gains (year-on-year)

6%

17%

12%

11%

B. NFF provisional allocation before gains cap

£73.4m

£75.0m

£90.0m

£101.3m

£110.4m

C. NFF provisional allocation after gains cap

£66.3m

£69.8m

£85.3m

£97.4m

£108.5m

D. Difference between allocations with and without gains capped [2] (B-C)

£7.1m

£5.1m

£4.7m

£3.9m

£1.9m

Total difference between allocations with and without gains capped 2018-19 to 2020-21

= £20.8m

Notes to table:

  1. The high needs NFF provisional allocations shown in the table are to provide the explanation of the £20.8 million requested in Question 73735. They do not include additional funding that was made available to all local authorities in 2018-19 and 2019-20, and do not include any of the deductions for academies and colleges’ place funding, or other adjustments that are made in the final allocations of high needs funding to authorities.
  2. All the numbers have been rounded so the differences may not add up precisely.

Finally, the department are unable to publish the high needs block funding per pupil for every local authority in England in each of the last five years. This is because the department does not collect information on the number of pupils who attract to their school the different types of high needs funding, or the level of funding that an individual pupil attracts. In addition, there is a wide range of practice in the proportion of children awarded an Education, Health and Care Plan, for example, across different local authorities, which make such comparisons difficult. It is possible to make a range of other local authority comparisons using the data in the department’s published high needs benchmarking tool. That tool is here: https://www.gov.uk/government/publications/high-needs-benchmarking-tool.