Ministers investigating 'perverse incentives' in high needs funding

The government is investigating “perverse incentives” created by the high needs funding system, a minister has said.

Anne Milton, the skills minister, told a debate in the House of Commons that ministers are “looking at” problems with the way schools receive money for pupils with special educational needs and disabilities, including a requirement than schools fund the first £6,000 of additional provision themselves.

The education minister also admitted it was a “bugbear” of hers that education did not have long-term certainty over its finances, but stopped short of backing calls for a 10-year funding plan for the sector.

We are looking at some of the perverse incentives that exist, especially considering the first £6,000 that schools are asked to pay

Ministers are under mounting pressure to act to address significant issues with a new system of high needs funding. Since last September, councils have been heavily restricted on the amount they can take from their core budgets to fund SEND provision. At the same time, schools are reporting a reduction in council support for SEND pupils.

The issue is further compounded by the fact that for every SEND pupil, schools have to foot £6,000 of the bill for their provision, which is then topped up by councils. This has in turn created a perverse incentive for some schools not to identify some children as SEND.

Caroline Lucas, the MP for Brighton Pavilion, added that school cuts were “quite often hurting the most vulnerable the most”, and said headteachers in her area were reporting “heartbreaking stories about schools having to lose their SEND teachers because they simply can’t afford them anymore”.

Milton, who responded on behalf of education secretary Damian Hinds, said her boss was aware of the problems.

“The secretary of state is extremely mindful of the problems with asking schools to do more and why he’s determined to make sure we can do what we can to help schools manage their budgets and their workload,” she said.

“She mentioned high needs. £250 million of additional money will go in in 2019-20 and we are looking at some of the perverse incentives that exist, especially considering the first £6,000 that schools are asked to pay.”

Schools Week has reported repeated warnings from council chiefs, charity bosses and headteachers that the high needs funding system is not working.

Just last month, one headteacher revealed how the funding gap was forcing her to cut SEND places in her school, while local authority directors warned MPs last November that the school funding system will “implode” if the forthcoming spending review does not address SEND budget pressures.

Closing the debate, Milton said the government recognised the cost pressures schools faced, but insisted it had “achieved a huge amount since 2010”.

However, she warned ministers “will not play party political games with education”.

“Party political rhetoric has no place in a debate like this. It is, as many members have raised, the outcomes for those who service, that matters,” she said.