Support for children and young people with special educational needs

Without fully understanding why demand for support has increased, the Department’s ability to provide value for money is undermined. Over the last decade, demand for EHC plans has soared. In January 2024, there were 3 576,000 children with EHC plans, a 140% increase since 2015. A further 1.14 million were receiving SEN support in schools, up by 14% since 2015. This encompasses large increases in certain needs, including autistic spectrum disorders, but the Department could do more to better understand the reasons behind increasing demand. The Department considers that identifying and supporting SEN needs earlier could reduce demand and be more cost effective. It also plans to provide support to cohorts of pupils in the areas of fastest-rising demand, making funding less dependent on agreeing individual plans. The Department has not yet explained how it will evaluate the cost-effectiveness of special schools but has started to compare outcomes for children with similar needs in state special and mainstream schools. recommendation Within the next six months, the Department must work with the DHSC to better understand the reasons for increasing and changed demand for SEN support, and then set out how it will provide support more efficiently, such as through group support, identifying needs earlier and ensuring special schools reflect value for money.

The Department has not made clear what it means by inclusive education, a core strand of its approach, or how it will be achieved. A core aim of the Children and Families Act 2014 was supporting children with SEN in more inclusive mainstream schools, but the Department has made little discernible progress. It has not defined or set out what inclusive education should look like, or provided specific funding for inclusivity, despite this being at the heart of its approach. There are few incentives for schools to be inclusive, with performance data focussing only on academic attainment and no separate judgement by Ofsted on SEN. Schools can often feel that others are not accepting their share of children with SEN. Local authorities have limited influence over academies to affect these decisions. This is also an issue in regard to selective education settings (e.g. grammar schools) found in parts of England. The Department acknowledges that it has not looked hard enough at barriers to inclusivity. It suggests that the ongoing curriculum review and proposed changes to Ofsted inspections provide an opportunity. In June 2023, only 56% of teachers felt confident to support children with additional needs, and the Department has several initiatives underway to improve training. It is also funding training for additional educational psychologists to provide both more support within schools and undertake assessments for SEN. The 2014 Act was intended to identify needs earlier, but the Department does not have a defined process or specific funding to achieve this. 4 recommendation The Department should, within the next six months, set out the provision which children with SEN support should expect. Alongside this, they should set out what inclusive education means and looks like, and the level of resourcing both to ensure the support for children with SEN and the maintenance of educational provision for other children in the same setting. The Department should also set out how i

Accessing health expertise presents a significant barrier to identifying and supporting SEN needs. DHSC plays a critical role in the SEN system. It jointly published with DfE the Code of Practice and 2023 improvement plan and is responsible for overseeing local health service providers. Currently, only 2 out of 32 competing priorities for the National Health Service (NHS) relate to SEN. DHSC recognises it could improve Integrated Care Boards’ (ICBs) focus on SEN. Since 2023, it requires each ICB to appoint an executive lead for SEN and recent planning guidance asks ICBs to look at community health services. Despite increasing need, DHSC does not have data to understand current long waiting times for health support, with reports of children waiting years to access children’s and adolescents’ mental health support (CAMHS). DHSC is still working on a solution - it has committed more funding and aspires to provide more support for speech and language therapy and CAMHS. However, with staffing being considered as part of a wider 10-year plan for NHS recovery, it is unclear when there will be wider progress. recommendation Within six months, DHSC should set out how ICBs will consider SEN alongside wider priorities; how its longer-term workforce plans will address current and forecast SEN skill shortfalls; and its processes, plans and targets for reducing related waiting lists.

Departmental witnesses could not provide any potential solution to the critical and immediate financial challenges facing many local authorities due to persistent and significant SEN-related overspends. The impact of these are being deferred under the temporary “statutory override” scheme, which is due to expire in March 2026. This is currently expected to cause nearly half of all English local authorities to be at risk of effectively going bankrupt. With increasing demand for EHC plans, most local authorities have overspent their annual high-needs budget each year since 2016–17. This has contributed to growing cumulative deficits for many 5 local authorities within their dedicated schools grant budgets, with others using reserves to cover SEN costs. Since 2020, local authorities have been able to exclude these deficits from their main revenue budgets, so avoiding these overspends impacting their overall financial position. However, this only hides the deteriorating financial situation. When this arrangement ends in March 2026, 66 local authorities (43%) could be at risk of breaching their statutory duty to set a balanced budget, and so would be effectively bankrupt. Despite the obvious urgency, there is no solution in place to what will be an estimated £4.6 billion cumulative deficit. The Department is discussing the issue with the Ministry for Housing, Communities and Local Government (MHCLG) and HM Treasury, but says the issue is complicated given local authorities’ differing financial situations. There is a real risk of unfairness in the treatment of local authorities given some have accrued SEN-related deficits and others have avoided doing so. Left unresolved the issue risks undermining the whole of local government finance. recommendation Given the risks to local authorities’ finances, central government must urgently involve local authorities in conversations to develop a fair and appropriate solution for when the statutory override ends in March 2026, clear

In the longer term, the SEN system remains unviable with piecemeal interventions, such as Safety Valve, doing nothing to provide a financially sustainable system. Based on the Department’s current forecasts on the need for SEN support, the annual gap between funding and forecast costs across local authorities will grow to between £2.9 billion and £3.9 billion in 2027–28. Since 2021, the Department has introduced the ‘Safety Valve’ and ‘Delivering Better Value’ financial support programmes for those local authorities with the worst deficits. However, these do not include all local authorities and will not deliver enough savings, merely acting as a short-term sticking plaster. The Department argues that the situation would be worse without these programmes but also recognises that more needs to be done. Due to a state sector capacity being unable to meet rising demand, local authorities are spending more on costlier independent school placements for children with EHCs - £2 billion in 2022 (46% more than 2018–19) - although the Department wants to rely less on these settings. Home to school transport for children with SEN has seen a 77% real terms cost increase since 2015. The Department needs more granular data so it can work with local authorities to better manage these pressures. 6 recommendation Moving on from its ‘Safety Valve’ programme, the Department must provide specific support and guidance so all local authorities can effectively manage their SEN-related spending sustainably in the longer term. To ensure investment allocation decisions maximise value for money, demand forecasting is vital. This joint work by the Department and local authorities should include differentiating between the number of places to be provided in mainstream and specialist state settings. It should also ensure that any spending on independent schools and transport costs reflects value for money. The Department should work with local authorities to identify ways in which more accountab

The Department’s ability to reform the system is hindered by a lack of data, targets and a clear, costed plan. The Department accepts the need for major change, but lacks a clear, costed plan to push forward reforms and measure progress. Despite taking years to develop a plan to address recognised challenges, the Department recognises it needs to be much clearer on what it needs to achieve, how and when, through a costed plan with interdependencies and metrics for progress and benefits. In setting out metrics, the Department conceded it needs to further develop how it will look beyond educational attainment to understand if the system is working, such as by considering attendance which may indicate children feeling supported. The Department has a long way to go to build data across a range of areas, such as on SEN mainstream schools places, home to school transport and whole system costs. It continues to test dashboards across 32 local authorities, but it is unclear how these data will be used and when. recommendation The Department should urgently improve its data, and then use this information to develop a new fully costed plan for improving the SEN system, with concrete actions, and clear interdependencies, alongside metrics to measure outcomes. 7 1 Support for children and their families Introduction

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department), and the Department for Health and Social Care (DHSC) on support for children and young people with special educational needs in England.1

The Department acknowledged that the SEN system is not working well enough and said it wanted to change the system.10 There has been no consistent improvement in outcomes for children and young people since

The Department described how parental confidence provided a core indicator of an effective SEN system but that, with a third of parents having children with SEN in the state system feeling their child did not get necessary support, the system was “nowhere near good enough”.16 Families lack confidence in a system where it does not meet expectations. The proportion of EHC plans issued within the statutory 20-week target was 50% in 2023, down from around 60% in the period 2018 to 2021.17 The Department attributed lengthening waiting times to increasing demand for EHC plans, which it described as “rational” given that less support is available for those without a plan, creating a “vicious cycle” of demand. It aimed to reduce the waiting times before children received SEN support by ensuring that this support did not necessarily depend on children going through the assessment process to get an individualised EHC plan.18 10 Q 2 11 C&AG’s Report, paras 7 and 1.6, Figure 1 12 Q 8 13 Q 4 14 Q 3 15 Q 2 16 Qq 3, 62 17 C&AG’s Report, para 8, Figure 7 18 Q 10 10

Parents are also increasingly appealing EHC plan decisions with the proportion being taken to a tribunal, parents’ final recourse for complaints, increasing from 1.6% in 2018 to 2.5% in 2023. The number of decisions appealed increased from 6,000 in 2018 to 15,600 in 2023. Nearly all (98%) were decided in favour of families, which the Department explained by decisions being recorded in their favour should they win on any aspect.19 With one in 40 cases going to tribunal, the Department confirmed the SEN system was not operating sensibly and did not represent value for money.