‘Financial blackmail’: Council to charge schools £21k ‘exclusion levy’

A cash-strapped council plans to charge schools £21,000 for the exclusion of pupils, using a new “levy” it says will “incentivise” inclusion.

But outraged heads say Devon’s plans are “financial blackmail”, while lawyers say the proposals could be illegal.

Devon says rising exclusion rates are no longer affordable, but a planned “exclusion levy” could raise £5.1 million.

However, headteacher Steve Hitchcock, the regional secretary for the NAHT leaders’ union, said such a levy could deter schools “from taking necessary steps to protect the learning environment, ultimately putting vulnerable pupils and staff at greater risk”.

It would place more financial pressure on schools “already dealing with constrained budgets, risking both the wellbeing of staff and students”.

“Such a punitive measure is likely to create a combative and target-based relationship between school leaders and the local authority.”

‘Incentivise inclusivity’

In a wider consultation on school funding, Devon said the charge would help “accelerate our approach” to developing “inclusive learning communities”.

It would “incentivise schools with high exclusion rates to explore every possible avenue” to keep pupils in school, “rather than to pass the financial burden on to the local authority”.

The exclusion rate in Devon in 2022-23 was 0.17 per cent (17 exclusions for every 10,000 pupils), above the national rate of 0.11. Its rate is up from 0.06 per cent pre-pandemic.

Devon said if exclusions continued to rise, “the proposal will generate the funds necessary to meet the resultant need”. It needed to move away from “low impact proposals to something that will address long-standing issues”.

The council used the average cost of delivering an education, health and care plan, management costs and funding potential alternative provision to calculate the £21,000 figure.

It plans to introduce the levy from 2026-27. If it were in place this year, the council would raise £5.1 million from the roughly 250 projected permanent exclusions.

The council forecast a £163 million deficit in its high-needs budget earlier this year. It has since been given a £95 million government bailout through the “safety valve” programme that helps councils tackle deficits while making cuts to provision.

‘Financial blackmail’

One headteacher, who wished to remain anonymous, said: “While we all would prefer the rate of exclusions to be lower, what feels like financially blackmailing schools into not excluding is not the way to go about it.

“Schools face a real Hobson’s choice if they reach the point of exclusion: suffer a budget-crippling levy and the potential ramifications of that, or persist with a situation that could well be to the detriment of pupil and staff wellbeing.

“It will simply incentivise schools to be less inclusive for fear of financial penalties should accepting a child not work out.”

Tom Bennett, the government’s behaviour tsar, said it was “horrific” for a council to consider “penalising schools for doing what they need to do to protect children’s safety”.

Any strategy that “seeks to artificially reduce exclusions by penalising schools … is placing children in harm’s way, exposing them to continued violence and disruption, and probably breaking the law”.

Levy ‘would be illegal’

Devon would not say how it intends to implement the levy.

But Graham Shaw, a consultant at Wrigleys Solicitors in Leeds, said councils were not permitted to levy a charge where a pupil was permanently excluded.

Guidance from the Department for Education states councils cannot require a school “to make any additional payments following a permanent exclusion”. The excluded child’s funding follows them to their new school.

In 2018, Gloucestershire council wanted to charge schools £5,000 for permanently excluding a child. But it did not go ahead with the plans. 

Barrister Russell Holland said if all schools wished to voluntarily enter into an agreement, they could. But “any individual school would need to be able to justify a payment as representing value for money”.

In an email to Devon, Hitchcock warned there “may be significant legal challenges to the implementation of such a policy, which we would be forced to explore if this is pushed through”.

“Schools must retain the right to exclude pupils who present a serious risk to the health, safety, and wellbeing of others in the school community,” he said.

Suggestions that schools were simply “passing responsibility” to the council was “inaccurate and dismissive of the challenges they face”, including “inadequate support” from specialist services.

A Devon spokesperson stressed the plans were “just proposals” and encouraged schools to respond to a consultation that closes next week.