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England: SPED deficits put back on the books would be "FINANCIAL HAVOC"

 Oct 24, 2024, Special Needs Jungle: NAO: The Government has no clear SEND plan and should consider “whole-system reform” to incentivise mainstream inclusion

Another day, another report detailing failings in the system that’s supposed to support children and young people with SEND. Today it’s the National Audit Office laying out the problems and having a go at proposing solutions.


It’s not pretty, but then it never is. The last time the NAO took a detailed look at SEND provision was in September 2019. The conclusion then was that children and young people weren’t being supported effectively and the system wasn’t financially sustainable.


Since then, of course, we’ve had a global pandemic, a SEND green paper, the SEND Improvement Plan, the SEND Change Programme and a change of government. And five years on, the same problems persist. No, that’s not quite fair: they’ve got worse.

 

What is the National Audit Office?

The NAO is the UK’s independent public spending watchdog. It produces reports for Parliament on government expenditure and assesses whether value for money has been achieved. It also makes recommendations to public bodies on how to improve public services. The purpose of the NAO’s value for money reports, like today’s one on SEND, is to “provide independent and rigorous analysis on the way public money has been spent to achieve government objectives”. . . .


What has the NAO found?


No real improvement: The NAO concludes that there has been no consistent improvement in outcomes for children and young people since 2019. It measures outcomes in terms of academic attainment and post-education employment, but this is hopelessly narrow for the full range of children and young people the SEND system is supposed to support.. . .



Over-full special schools: The NAO highlights the extent to which state special schools are over capacity, which it says “may lead to poor value for money”. Not to mention the risk of children being placed in schools that aren’t right for them and can’t meet their needs.


Design challenges: It observes that “the system design creates challenges”. For example, local authorities are held to account (somewhat) for special educational provision but they have very limited levers to make changes happen in schools and health services. Another example: “Schools can be incentivised to seek EHC plans to access additional high-needs funding, or exclude pupils with SEN, which conflicts with local authorities’ duties to find children school places and ensure value for money.”


The conclusion is that, “if unreformed, the SEN system is financially unsustainable”, a statement that sounds alarming without clarifying what is meant by “reform”. The NAO says that the Government should “explicitly consider whole-system reform” – but what would this look like? Improving integration across services, giving local authorities more levers to make things happen, improving data and making better use of existing resources are all important: but the existing framework of children’s and young people’s rights should remain at the centre of it all.


Safety valve agreements are not the answer


The NAO notes that the Safety Valve programme and the Delivering Better Value programme are not the solution to creating a sustainable SEND system. It also reveals that DfE has undertaken no assessment of the impact of the conditions set out in safety valve agreements on children and young people in the areas affected. . . .


What does NAO say about DfE?

By far the most interesting aspect of the report is the insight it gives into what’s happening—or, it turns out, not happening—at the Department for Education. It is utterly damning about the DfE’s failure to plan, evaluate evidence, assess risk, or even know what’s going on.

“DfE does not know with confidence how much [school] capacity should be planned, and where, to meet future needs.” 

But this is the job—the actual job—of the DfE and local authorities. If no-one is on top of this, what is the point of public bodies at all? . . .


Matt Keer’s assessment of the financial messages

The NAO has doubled down on its message that the system for supporting children and young people with SEND is not, on current trends, financially sustainable.


Sustainability can be a slippery concept – and it’s worth remembering that nobody seems to be seriously considering whether the harm inflicted on children, young people and their families is sustainable for them.


But this is an auditors’ report, so the NAO situates “sustainability” firmly in the context of whether local authorities can remain financially solvent or not. They note the following:

“If unreformed, the SEN system is financially unsustainable”: this is due to the education funding deficits that local authorities are continuing to build up, mostly because they spend more than they get from Whitehall on high-needs SEND. We’ve covered these deficits extensively on SNJ—for background, try here, and keep going. . . .


Government still doesn’t know how much it spends on SEND: That might sound mental, and it is. But it’s because SEND spending happens across several departments, and each of them delegates SEND funding differently. If you’re at the top of the tree, it’s really hard to find out what schools and hospitals spend in total on SEND provision.

The DfE is proposing a qualitative evaluation on the impact of Safety Valve: That sounds wonderful, but it does beg the question of why it hasn’t happened already, three and a half years into the scheme. . . .


But the main thrust of the NAO report is on deficit finance. The NAO report lays out, in loving detail, what local authority education funding deficits are likely to look like over the next few years. . . .


Depending on which DfE dataset you trust, the National Audit Office report says that the combined DSG deficit will have grown to either £2.9 billion [$3.8B] or £3.3 billion [$4.3B] by the end of March 2025. From our own research, we’re plumping for the latter figure. . . .


The end of the accounting override

This accounting override has been in place since 2020, and it currently keeps these DSG deficits in a “limbo” state. If or when that override stops, the deficits fall back directly onto council balance sheets, where they are likely to create financial havoc.
According to the NAO, the DfE expects combined councils’ DSG deficits to be somewhere around £4.4 [$5.7B] - £4.9 billion [$6.4B] at the end of March 2026. . .

What might the new government do?

We don’t know what—if anything—the new government is going to do differently, but one of the purposes of the NAO’s report is to give them some information to help make decisions.

So what does the NAO recommend on the financial side?

They’re calling on government to “explicitly consider whole-system reform, to improve outcomes for children with SEN and put SEN provision on a financially sustainable footing;”

“As a matter of urgency, work with the Ministry of Housing, Communities and Local Government and HM Treasury, to share with local authorities its plans for ensuring each local authority can achieve a sustainable financial position once the statutory override ends in 2025-26, including how cumulative deficits will be treated and any wider financial impact managed;” . . .


“1 in 5 children in the UK currently have speech and language challenges, many of which are preventable. Without changes to the system, they will be far more likely to fail basic school tests, develop mental health problems and end up unemployed, all of which costs the Exchequer. With some minor upfront investment in teacher training, school-based group programmes and specialist support for some, they can go on to be productive and happy members of our society. Government needs to provide a strong and secure foundation for these children’s futures.” 

Jane Harris, CEO, Speech & Language UK

What is the Department for Education’s response?

“The NAO’s report exposes a system that has been neglected to the point of crisis, with children and families with SEND quite simply being failed on every measure.

“Every child and young person deserves the best life chances and the opportunity to achieve and thrive. But at the moment far too few are being given that chance in a system that is too skewed towards specialist provision and over-reliant on EHC plans – often only to the benefit of families who have the resources to fight for support. 

“I am determined to rebuild families’ confidence in a system so many rely on – so, there will be no more sticking plaster politics and short-termism when it comes to the life chances of some of our most vulnerable children.  The reform families are crying out for will take time, but with a greater focus on mainstream provision and more early intervention, we will deliver the change that is so desperately needed.”

Brudget Philllipson, Secretary of State for Education



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