Dear Rt Hon Damian Hinds MP,
Unprecedented pressures in High Needs Funding in Hounslow
We are writing to ask you to urgently review the level of funding the Government currently allocates to support children and young people with SEND. The recent announcement of additional funding for SEND is welcomed but it is far from sufficient to address the funding crisis we are now facing across our two constituencies in the London Borough of Hounslow. If this issue is not addressed then we fear that we will not be able to continue to support some of the most vulnerable children, young people and their families in Hounslow.
We welcomed the SEND reforms in the Children and Families Act 2014 but there has been insufficient funding from the Government to support the implementation of these reforms. These reforms and demographic increase means that the numbers of children and young people with Education Health and Care Plans (EHCPs) in Hounslow has doubled from 1089 statements of SEN and EHCPs in 2014 to 2250 as of March 2019.
The new requirement to support young people up to the age of 25 is also welcomed but has added unprecedented pressure on affected services. This will become more pronounced as more children and young people are eligible for support until 25 without resources from the Government to deliver this extended duty. Hounslow has not yet experienced the full impact of the reforms and we both fear the consequences if the funding of High Needs support is not urgently addressed by the Government.
The situation is stark in Hounslow, but this is a London-wide problem. A report by London Councils released late last year on Children’s Services funding found that there was a £77.6m shortfall in High Needs funding across London Councils by the end of the 2017/18 financial year. It also found that seven boroughs have a shortfall of over 10%, including one with a 44% shortfall, and that three quarters of boroughs are overspending on SEND transport. Research from London Councils also found that thirty-one of the thirty-two London Councils are overspending on the High Needs block.
To address the increasing SEND funding pressures in Hounslow, the Council has invested £95m of capital to expand all our existing Special schools, the Pupil referral unit and added additional places in our SEN centres in mainstream schools, providing 440 more places for children and young people with SEND.
Educational outcomes for children and young people with SEND in Hounslow are very good. Currently children and young people with SEND are performing well above the national average and educational outcomes for children and young people with SEND, both with and without an Education Health and Care Plan (EHCP), are high against almost all national benchmarks from foundation stage to key stage 4. We are proud that all our special schools in Hounslow are judged good or better and almost all our primary and secondary schools are judged good or better meaning that all children, particularly those with SEND, have access to good quality education.
However, the stresses on the system, due to inadequate funding levels, have reached a point where the high-quality education is now at significant risk. For the last financial year, Hounslow had a £2.6m shortfall in the High Needs Project which was met by utilising all the residual DSG reserve to set a balanced budget. However, we are projecting a shortfall of around £6.1m in the High Needs Block for 2019/20. The increase in the projected shortfall for 2019/20 includes a £2.7m increase due to an additional 321 pupils aged 18 and below with a Statement/EHCP and a £0.8m increase due to an additional 44 pupils aged 19 and over with a Statement/EHCP.
If the ring-fenced High Needs Block of the DSG is insufficiently funded to meet the Council’s statutory duty to provide SEND services then local Councils face the dilemma of addressing the projected shortfall from other areas of the budget or failing their statutory duty and potentially being challenged through Tribunals and/or SEND Local Area inspections. In addition, the increase in demand affects other local budgets including the Home to School Transport budget with more children and young people than ever being eligible for free transport provided by the Local Authority.
The current situation of inadequate funding for SEND services cannot continue. If it is not addressed now the situation will get worse and the cost that will be needed to redress the lack of funding could exceed the cost of providing the required resources to adequately support SEND services now. More importantly, children and young people and their families may suffer from negative outcomes by not getting the support which they need which they may not recover from. Therefore, we would encourage the Government to undertake a post-implementation review of the 2015 changes to the Children Act, not only in terms of funding but in terms of outcomes.
The existing DfE mechanisms to address budget pressures in the High Needs block are simply not effective. The disapplication is unwieldy and a 0.5% transfer to support SEND shortfalls is so negligible that it renders the process pointless. Disapplication not address the High Needs shortfall that Hounslow and many other LAs are facing and it creates issues and pressures elsewhere. The current DfE guidance on accounting for DSG deficits is not transparent and a review and update of this guidance would be welcomed by Hounslow Council and Councils across the country.
In addition, Councils who have an end of year DSG deficit budget in excess of 1% of their total DSG allocation are now required to produce and submit a 3-year financial recovery plan to the Government. This could mean that 32 of the 33 London Boroughs will be submitting a plan along with many others from across the Country. We question whether the DfE will use these plans in any meaningful way. It concerns us that these may simply provide an opportunity for the Government to claim that they are managing the situation.
We are worried that this situation risks echoing the national crisis in adult social care. This could be avoided if the Government tackles the funding shortfall for SEND and we ask that you urgently work with HM Treasury to address this by improving the proposed funding for the 2019/20 High Needs Block and propose a longer-term solution in the Fairer Funding review. We also ask for better collaboration between your department, the MCHCLG and the Treasury. This is currently very fragmented, causing this issue to be even more complicated for Councils to navigate.
We are very proud of our schools and early years provision in Hounslow and the standard of education provided. We would be delighted to meet with you along with relevant local Councillors and officers to show you some of Hounslow’s excellent provision and the risks to it should the Government not urgently address the funding crisis for SEND.
Seema Malhotra MP
Ruth Cadbury MP
C.c Councillor Tom Bruce, Lead Member for Education, Children’s and Youth Services, Hounslow Council