Meaningful reform to the Special Educational Needs and Disabilities (SEND) system is likely to require a “significant expansion” of the core SEND provision available in mainstream schools, an expansion of state-funded special school places, a geographic redistribution of funding, and maybe reducing the statutory obligations currently attached to EHCPs, the Institute for Fiscal Studies (IFS) has said.
In a report published yesterday (10 December), the IFS warned that spending on special educational needs is becoming “unsustainable” due to the rise in high needs, and outlined a number of solutions for reform.
The report made the following key findings:
- The number of school pupils with EHCPs has risen by 180,000 or 71% between 2018 and 2024. As a result, nearly 5% of pupils now have Education, Health and Care Plans (EHCPs).
- Central government funding for high needs currently totals nearly £11 billion and has increased substantially.
- High needs spending has been consistently higher than funding by £200-800 million per year between 2018 and 2022.
- Nearly two-thirds of the increase in spending has been driven by increased spending on pupils in special schools, with a £900 million increase in top-ups for state-funded special schools and a £900 million rise in spending on fees for pupils in independent special schools between 2015-16 and 2022-23.
Weighing up policy options for future reform, the IFS observed the ‘right’ option will depend on how much of the rise in EHCPs is due to “an objective rise” in very high needs among young people, as opposed to financial and legal incentives for less severe needs to be met by the costly statutory system of EHCPs.
It noted: “Both effects are likely to be at play”.
The report stated: “If one thinks that most of the rise has been driven by increased needs or better identification of needs that were always there, then the best approach is likely to involve expanding current provision to meet that need and finding the best ways to assess how to meet those needs (i.e. specialist versus mainstream provision).
“Alternatively, one might think that numbers and costs have been driven by financial incentives to seek EHCPs for less severe needs, the statutory obligations attached to EHCPs, poor practice, and seemingly artificial separations between high-needs and mainstream education budgets. In this case, the best response is likely to be cost-saving measures and legal/funding reforms.”
The think tank noted the government has already set out a “clear preference” for increasing core provision in mainstream schools, and has announced £740 million in capital funding to help schools make adjustments.
However, it warned that sufficiently expanding core provision to accommodate rising need is likely to require “much more” than this.
The report highlighted the following six options for reform in this area – weighing up the benefits and drawbacks:
- Continue with the current system of pupil-led top-up funding for EHCPs. This is not an easy option. On current forecasts, the number of pupils with EHCPs is expected to rise significantly and annual spending is forecast to increase by at least £2–3 billion between now and 2027. Much of this extra spending flows directly from statutory obligations and, without extra funding, would likely increase local authorities’ high-needs deficit to over £8 billion. If accounted for in the normal way, this would lead to widespread local authority bankruptcies.
- Seek to deliver provision in a more cost-effective way, without affecting overall quality. This is, in essence, the approach of the so-called Safety Valve programme, which provides extra grants to local authorities with the largest high-needs deficits on the condition that they reduce costs. This programme has seen some financial success, with 22 of the 33 local authorities with the highest deficits on course to deliver expected savings. […] However, the vast majority of the deficits will not be closed until between 2026 and 2032. Furthermore, this programme has been highly controversial, with concerns about cuts to provision and ongoing legal cases.
- Reform the system such that EHCPs no longer created statutory obligations. Instead, schools and local authorities would need to make best endeavours to deliver such provision and ration scarce resources. […] This would clearly be attractive from a purely financial point of view, but it could be incredibly challenging from a political perspective given parents’ lack of trust in the current system to meet their children’s needs.
- Provide further specific services to support children, including earlier interventions before problems become more severe and costly. This could include mental health services, speech and language therapy, and educational psychology. The current government has already committed to providing mental health support in all secondary schools, which may well ease some of the severe problems young people currently face in accessing mental health services. However, it is uncertain exactly how much of the increase in numbers could be avoided, or reduced in cost, by earlier intervention services.
- Increase capacity in the state-funded specialist sector. This is almost certainly needed given that many special schools are at or over capacity, which has compelled many local authorities to fund more expensive provision in the independent sector.
- Deliver more support within mainstream schools. In many ways, this seems like the most natural option, but this is not simple either. It would be a massive change in what schools do and how they are funded. Schools would need to be able to offer core provision for pupils with a range of different types of SEND, and do so without affecting existing provision. Many pupils with SEND can present with challenging behaviour, which can be disruptive and take up staff time. Schools would need extra staff with the required skills, teachers would need to have further good-quality training, and extra physical space would be needed.
Concluding the report, the IFS said: “In the end, one must confront powerful arguments and constraints working in opposite directions. On the one hand, the system is clearly in need of urgent, radical change and will push annual spending up by at least £2–3 billion in three years’ time without reform. On the other hand, the public finances are incredibly tight and the likely set of reforms represent controversial, massive changes to the school system.
“With this in mind, the most important thing the government can do is set out a clear long-term vision. The state of the public finances and an accumulation of evidence on the best approaches to delivery will then determine the pace of transition.”
A Department for Education spokesperson said: “This is the latest addition to the mountain of evidence on the failings of the SEND system which we inherited.
“Work has already begun to rebuild families’ confidence. The Budget invested £1 billion in day-to-day services and last week £740 million was directed to support local authorities create more specialist places in mainstream schools.
“Every child should have the best start in life and through our Plan for Change we will deliver this priority for the British people.”
Lottie Winson
