Schools for excluded children compete with special schools for funding from the government’s high needs budget. The National Audit Office has previously described this situation as financially unsustainable.
What’s more, there is huge variation in per-pupil spend across the country with no standardised service delivery model and no guaranteed outreach budget to work with mainstream schooks.
And, in some areas, there are financial incentives for schools to exclude rather than to support children at risk of exclusion.
The government is set to publish a white paper on special educational needs in the Autumn. In doing so, it should work with mainstream, alternative provision and special schools and local authorities to develop a national funding formula that guarantees equitable treatment for all excluded pupils and those at risk of exclusion, is sufficient to cover all the services required, and is consistent across England.
Every area of the country needs funding to support children at risk of exclusion to stay in school and thrive. Early intervention is better for pupils and more cost-effective in the long-term.
Alternative provision schools should be funded equitably and adequately to provide high quality education. Funding per pupil varies significantly across the country but a lack of transparency makes it impossible for researchers to analyse how funding correlates with quality of education.
There is no statutory duty on local authorities to continue alternative provision after the age of 16, yet half of excluded children drop out of education immediately after their GCSEs. Funding is needed to support these young people to continue in education, employment or training.
“Pressures are making the system less, rather than more, sustainable.”
A report published by the National Audit Office in 2019 found that the system for funding alternative provision and specialist provision was “not, on current trends, financially sustainable.” They revealed that many local authorities are failing to live within their high needs budgets and meet the demand for support.
The National Audit Office estimates the gap between the High Needs Budget and what was spent was about £1.4 billion in 2024–25.
Half of local authorities have said they would become insolvent if the current measures that allow for the high needs budget to be taken off their balance sheets are removed.
It is predicated that the recent £1bn announcement for SEN in the 2024 Budget will only go some way towards filling this deficit.
Pupils in receipt of SEN support are five times more likely to be permanently excluded than a child with no identified SEN. Pupils with an EHCP are three times more likely.
In most parts of the country, it is cheaper for a school to permanently exclude a pupil than it is to fund preventative support in their education setting. The funding system should be redesigned to ensure that decisions are driven by pupils’ best interests, not funding pressures.
Funding arrangements sometimes incentivise alternative provision schools to hold onto pupils when reintegration might be in their best interests. Research suggests work remains to be done to redress this balance, and the Timpson review echoed these findings.
Special free schools are funded centrally whereas local authorities must pay for places in alternative provision free schools. This process creates financial incentives for local authorities to bid for special free schools over alternative free schools, regardless of local need.
