This report recommends actions for 2018/19 and 2019/20 to ensure high needs expenditure remains within budget for the next two financial years whilst a fundamental review of high needs services and costs is undertaken.

The item began with a presentation by the head of additional needs. The key points noted were:

·         the high needs budget for 2016/17 had not yet overspent and although warnings had been issued about a possible overspend based on forecasts it was hoped that spend for this year would come in on budget;

·         longer term forecasts projected difficulties if current level of demand continued;

·         there were a number of areas of growth in demand plus additional responsibilities which had been given to local authorities without significant increase in funding;

·         other authorities were reporting similar difficulties and many were already overspending on their high needs budget, Herefordshire was in a relatively good position but could not be complacent;

·         efforts were being made to ensure the point of entry to the system was robust - a headteacher and other senior school staff members had been added to the SEN referral panel, the principal education psychologist would be double checking referrals in addition to the caseworker and the SEN Team Manager, evidence requirements would be strictly applied and a period before reapplications could be made was being considered;

·         the descriptors in the matrix would be reviewed and made clearer over the summer term;

·         the service would consider trading some services, for example for hearing and visual impairment, but this would need to be carefully considered against the risks of pupils being overlooked if schools did not buy back services;

·         any changes to central services needed to be carefully considered - once removed they could be difficult to reinstate as specialist staff would move on and care needed to be taken to understand the interrelations between services to avoid unintended consequences for schools and pupils;

·         partnership working would be an important part of the way forward, options to be considered could include devolving some finance to partnerships of schools to manage on the basis that once funds were exhausted the partnership would need to make up any shortfall;

·         the vast majority of the high needs budget (approx. £8.5m out of £12.3m) was currently spent on commissioned places and top ups for mainstream, post-16 special schools and the PRU, if the budget was overspending on top ups it was unlikely that savings on the smaller items of spend would be sufficient to compensate.

The presentation was discussed and the following points made:

·         there was ongoing dialogue with headteachers both individually and through phase groups;

·         a recent conference on emotional wellbeing had discussed whole school approaches to social, emotional and mental health; any other forums to discuss this would be welcomed;

·         this was a national issue and efforts were being made to identify good practice and possible solutions from other authorities, however not all solutions would necessarily transfer easily to Herefordshire;

·         support from the health sector for pupils with medical needs was not always forthcoming - Health Care Plans should be made available to a school and some schools had reported difficulty getting advice – work was continuing to improve links;

·         the clinical support that had been long heralded was now being recruited to and would work predominently but not exclusively with special schools;

·         the reasons for the increase in the number of EHCPs produced annually were complex but partly due to the new requirement to have EHCPs for post 16 students potentially through to age 25.

The schools finance manager explained the recommendations in the report. He noted the trend of growth in the payment of top ups. Payments to mainstream schools had increased from around £60k a month to over £160k a month since 2014. Funding for the high needs block had not kept pace with the increase in demand. The issues had been discussed in great detail at the budget working group. The recommendations reflected those discussions and were intended as a short term fix while a fundamental review of the high needs service was carried out.

Consultation with schools had shown there was limited support for a future top slice of school budgets to support the high needs block. Most secondary schools were against this approach while primary schools were more mixed in their views. DfE regulations required support from the schools forum in order to implement transfer between the funding blocks and without a high level of support it was unlikely this could be progressed. The proposal for a top slice had therefore been withdrawn.

An additional proposal to introduce an economies of scale factor to top ups had also been put on hold following discussion with the working group. It was noted that the proposal would only have delivered a modest saving in the first year of operation.

The proposed budget for 2018/19 was as set out in the agenda papers. The budget balanced if the one off transfer of the surplus from the schools block was included and it was recommended that this be approved by the forum. The budget for 2019/20 would need to find additional savings as the surplus transfer of £324k was a one off figure.

Changes to the tariff scheme were explained. It was noted that special schools would be protected by the minimum funding guarantee and the SFM would provide them with further information on this in due course. Tariffs for the PRU would be reviewed at the end of the current contract.

The final decision on the high needs budget would be taken by the cabinet member for children and young people. Historically the cabinet member had generally followed the recommendations of the forum.

In the debate of the issues that followed it was noted that:

·         the response rate to the consultation with schools was disappointing, particularly from primary schools, and forum members were asked to encourage more responses from their groups in future;

·         projections of future overspends were based on the trends shown in the past few years, there was no evidence yet of any plateau in the numbers of ECHPs being issued although it was anticipated that the measures proposed would have some impact;

·         procedures and thresholds were guided by the SEN code of practice and while the matrix would be reviewed to ensure that the interpretation was correct it was believed that Herefordshire was applying the thresholds consistently with national practice;

·         early intervention was important to prevent or reduce the impact of needs and therefore costs from escalating;

·         not all measures to support pupils incurred cost and these alternatives should be encouraged where appropriate;

·         increased capacity at special schools would be considered, particularly for areas where there were gaps in provision, but this required ongoing revenue support as well as capital investment;

·         schools had noticed a lack of support for families in the wider community;

·         an increase in survival rates for very premature babies had led to an increase in children with very complex needs from birth, also increased diagnoses for conditions that might not have been picked up in the past;

·         increases in survival rates only accounted for a proportion of the growth in EHCPs, there were other factors involved;

·         monitoring would be required to check if the measures implemented were effective;

·         the proposal to divide the tariff bands would more closely align funding with the level of need, previously there was a large jump in funding from band to band even when the needs of the pupil may have only just moved across the boundary;

·         annual review should show evidence of the level of need, what provision was in place and how effective this had been;

·         the budget working group would continue to discuss the high needs budget at regular intervals;

·         use of central staff to monitor and moderate school support for SEN pupils was expensive to run and the HAN felt that this was not the best use of resources, some work would take place on improving annual reviews as a time-limited project using residual funding from the SEN reform grant;

·         it was suggested that a system of moderation of annual reviews could be set up using SENCOs from all schools;

·         many pupils already had a point value and could therefore be migrated accurately to the new tariff bands, those pupils who did not have a point value on record would be placed in the lowest equivalent to their current band to begin with, reviews would be carried out with schools to identify the correct points value for these pupils and funding would be backdated to April as necessary;

·         clarity in the system was recognised as important and it was confirmed that a clear list of charges for services for schools would be published.

Resolved that:

Following the advice of the Budget Working Group, the high needs budget and savings plan, as set out in the schools consultation document and below, be approved for recommendation to the cabinet member for young people and children’s wellbeing as follows:

(a)   the High needs tariffs to mainstream and special schools be revised to a five point range (Option B) from 1st April 2018 (Post-16 providers from 1st September 2018) to save approx. £300k as follows

(b)       Tariffs for the pupil referral service remain fixed until the end of the current contract with the Herefordshire Integrated Behaviour Outreach Service (HIBOS) at which point the tariff allocations are revised with the purpose of reducing the current cost of the service by £50k pa;

(c)       Charges to schools be increased for Pupil Referral Unit services as follows

(i)            Key Stage 4 placement one-off charge increased to £7k from September 2018

(ii)          Increased charges for Key Stage 3 and primary intervention be agreed with HIBOS for implementation from April 2018 to save £25k pa;

(d)       Budget reductions for the SEN Support services of £50k pa for SEN support and £15k pa for the equalities team be approved from April 2018;

(e)       The cost of a place at the resource units at Hampton Dene and Bishop’s schools be decreased to £6k pa as required by the operational guidance received from the DfE for 2018/19 to save £160k pa;

(f)        The surplus funding of £324k retained in the schools block be transferred to the high needs block for 2018/19;

(g)       Further work to review the high needs services and costs be commissioned in conjunction with the School Forum’s  Budget Working Group (BWG) and secondary and primary Headteachers to ensure that high needs expenditure is within the available funding from April 2020 onwards and the working group reports progress regularly to schools forum

(h)        Following feedback from schools the short term action plan set out in the schools consultation paper be amended as follows

i)             the proposal that the SEN protection scheme be funded from a top-slice in school budgets from April 2019 be withdrawn; and

ii)            the cap on the SEN protection scheme be gradually raised from £120 x number on roll in 2017/18 to £130 x number on roll in 2018/19 and £140 x number on roll in 2019/20 and potentially subject to further consultation £150 x number on roll in 2020/21

iii)           theSEN protection scheme be restricted to primary schools only

iv)           that an economies of scale reduction to  all new and amended tariff payments to mainstream schools be withdrawn for 2018/19 and the Budget Working Group consider alternative options for inclusion in the autumn 2018 consultation as necessary

(i)        Further consultation with schools be agreed for the autumn term 2018 setting out further proposals for the high needs services for 2019/20

(j)    The high needs budget including the savings as above be approved as set out in Appendix 2.