Guidance

High needs funding: 2022 to 2023 operational guidance

Updated 29 March 2023

This guidance was withdrawn on 28 December 2023

This has been withdrawn as it is out of date.

Find the latest guidance on high needs funding on GOV.UK.

Applies to England

Summary

1: This guide describes how the 2022 to 2023 financial and academic year high needs funding system will work for all types of provision. Unless the context relates specifically to the national funding formula (NFF) allocations and operational processes relating to 2022 to 2023, most of this guidance applies to the current financial year and should therefore be considered with immediate effect. It is primarily for local authorities, schools and colleges but will also be useful to anyone with an interest in high needs funding.

2: The definitions of terms used throughout this guide are as follows:

• provider local authority – this is usually the local authority where a school or college is located. The provider local authority funds the high needs places at a school or college from its dedicated schools grant (DSG). For centrally funded schools and colleges (non-maintained special schools (NMSS), special post-16 providers (SPIs), and a small number of other further education (FE)), Education and Skills Funding Agency (ESFA) is considered the provider local authority

• resident local authority – this is the local authority where a child or young person lives (wholly or their main residence), as identified in the school census or individualised learner record (ILR) using their postcode. This may differ to the responsible local authority, for example in relation to looked after children

• responsible local authority - this is the local authority responsible for commissioning and funding provision for a child or young person with an education, health and care (EHC) plan under the special educational needs and disabilities (SEND) Code of Practice

• commissioning local authority or school – this is the local authority or school placing a child or young person at a school or college. It is the same as the responsible local authority for those with EHC plans, although schools may also be commissioners for children placed in alternative provision (AP) settings

• schools and colleges – when the term ‘schools and colleges’ is used this refers to all education provider types, including: all mainstream schools (pre and post-16, maintained and academies, but excluding independent schools), maintained and non-maintained special schools, special academies, pupil referral units and AP academies, hospital schools, general FE colleges, sixth form colleges, independent learning providers (ILPs), and special post-16 institutions (SPIs) – unless specific references are made to particular types of school or college

• the term ‘academy’ or ‘academies’ should normally be taken to include free schools unless these are referred to separately

Next publication date

3: The 2023 to 2024 operational guide will be published in summer 2022.

Who is this publication for?

4: This guidance is for:

• local authorities
• all distinct types of schools and colleges, including:
  • early years providers, including maintained nursery schools
  • mainstream schools
  • special schools
  • NMSS
  • independent special schools
  • pupil referral units (PRU)
  • other AP
  • 16 to 19 maintained schools and academies
  • FE colleges
  • SPIs
  • ILPs
• those with an interest in how high needs funding operates across England

Main points

5: This guide explains how the high needs funding system operates for local authorities and different school and college types across England. It can be used to inform local budget planning and consultations over the autumn term and beyond, particularly in agreeing how high needs provision should be supported, commissioned and funded.

6: High needs funding supports provision for pupils and students with SEND, from their early years to age 25, and alternative provision for pre-16 pupils who, because of exclusion, illness, or other reasons, cannot receive their education in mainstream schools.

7: High needs funding is provided to local authorities through the high needs block of the DSG, enabling them to meet their statutory duties under the Children and Families Act 2014.

8: The financial allocations from the high needs funding block provides local authorities with resources for place funding and top-up funding for schools and colleges; funding for high needs services delivered directly by the local authority; or under a separate funding agreement with a school or college (including funding devolved to schools and colleges), as permitted by regulations. Local authorities must spend that funding in line with the associated conditions of grant, and Schools and Early Years Finance (England) Regulations 2022.

9: High needs funding is also provided directly to some schools and colleges by ESFA, and the respective conditions of grant and funding agreements apply. It is important to note that financial accountability will vary according to school or college type; for example, the governing body for a maintained school and the trust for an academy. Each of these operates with different levels of delegation according to their governance arrangements. In some cases, the relevant legislation. The Children and Families Act 2014, for example, refers to the proprietor (trust in the case of an academy) as the person responsible, and also specifies the headteacher or principal, as the person performing a particular role. In other cases, there are references only to the governing body/proprietor. Consequently, references to schools and colleges should be interpreted as applying to the headteacher, principal, governing body, trust or other proprietor according to the context.

10: Local authorities must ensure that children and young people and their parents/carers are involved in discussions and decisions about their individual support and local provision, in line with the SEND Code of Practice.

11: Funding arrangements for students with SEND who are aged 19 to 25, without an EHC plan, and students who are over the age of 25 are not included in this guide. Links to the funding arrangements for these students are in Annex 4.

Changes to the high needs funding operational guide for 2022 to 2023

12: This section sets out the main changes to the operational guidance on the high needs funding system.

The following updates in the guidance are in addition to the changes captured in the earlier August 2021 version listed below again. The national funding formula (NFF) and underpinning operational processes and principles remain largely unchanged from the 2021 to 2022 version of the guide:

March 2023 updates:

• 2022 to 2023 academic year in-year growth criteria (element 1 and element 2) for post-16 education

February 2022 changes:

• information about the dedicated schools grant (DSG): supplementary allocations, which were published in December 2021

• further supporting information about the teachers’ pay and pension funding

August 2021 changes:

• summary: clearer definition of terms used when referring to local authorities and types of educational providers

• teachers’ pay and pension funding: a new section providing guidance for local authorities and all types of educational provision

• top-up funding: clearer guidance on expectations and obligations at the local level, including information on extended periods of absences

• independent schools: additional information on unregistered independent provision

• annex 1: special schools minimum funding guarantee (MFG): updated guidance on requests to disapply the MFG

• annex 2: responsibility for children and young people who move between local authorities: further clarification

High needs funding allocations to local authorities for 2022 to 2023

13: High needs funding for children and young people with complex needs is increasing in the next financial year 2022 to 2023 by £1 billion to over £9.1 billion. This unprecedented increase of 13% comes on top of the £1.5 billion increase over the previous two years, and will continue to support local authorities and schools with the increasing costs they are facing. The provisional distribution of funding allocated through the high needs national funding formula (NFF), as announced in July 2021, has been updated in the allocations of the high needs block of the DSG, and supplemented by the allocation of an additional £325 million. You can view the 2022 to 2023 DSG additional allocations.

Supplementary funding for 2022 to 2023

14: The additional £325 million allocated following the autumn 2021 spending review is intended to reflect the cost to all employers of the Health and Social Care Levy and other cost increases that were not anticipated when the NFF allocations were published in July 2021. Further information about each local authority’s total allocation can be found in the first table in the dedicated schools grant (DSG): 2022 to 2023 section - 2022 to 2023 schools and high needs additional allocations document, and details of how the supplementary funding has been calculated are in the last table in that same section - High needs funding block of the dedicated schools grant (DSG) – additional allocations for financial year 2022 to 2023 document.

15: Year-on-year increases of this scale demonstrate the importance we place on helping local authorities secure their financial sustainability. Funding will increase further in the subsequent two years, but on a smaller scale. We have advised authorities in the ‘safety valve’ programme to use an assumption of a 5% increase in 2023 to 2024, and 3% beyond that, although actual funding for all authorities will be decided as part of the usual annual process of setting allocations. Other local authorities may similarly want to reflect on the appropriate future assumptions to use in planning ahead.

16: Extra funding allocated to the department because of the 2021 spending review is also being allocated in 2022 to 2023 as a supplementary grant to mainstream schools. This is a supplementary grant because it was not possible for the Department to decide on allocations, and for local authorities to include those within their local formulae in time. Special schools and academies, pupil referral units and alternative provision (AP) academies are all funded differently from mainstream schools and academies, with the majority of their funding coming from the high needs block of the DSG. The differences in funding, and costs, for these schools mean that centrally setting supplementary per-pupil funding rates, as has been applied for the supplementary grant for mainstream schools, was not appropriate. It is therefore for local authorities to decide how to allocate the additional funding to those schools, with the same flexibilities as they must deploy the rest of the DSG allocations of high needs funding.

17: Those special schools should discuss with their local authority any increases as part of the top-up funding paid from authorities’ high needs budgets. Nationally, the supplementary funding for high needs is an increase of 4% to the high needs’ allocations announced in July 2021, so local authorities should be able to afford some increase to their top-up funding, where that is required to meet the cost increases that schools and colleges are facing.

18: The supplementary high needs funding allocated to local authorities for 2022 to 2023 also includes funding to take into account that colleges offering extra hours of study to students with high needs may require additional funding. You can read further guidance on the additional hours requirement, which takes effect from the 2022 to 2023 academic year. To ensure students with high needs up to age 25, or those aged 19 to 25 with an education, health and care plan (EHCP) can benefit, colleges have flexibility in how they deliver additional hours for these students, subject to the relevant local authority agreeing to any necessary change to the education, health and care (EHC) plan and/or high needs funding required.

Delivering additional hours for these students could include (but is not limited to):

• more time where it is safe, effective, and viable

• enriched teaching time within the current day or more time with greater teacher ratios

• more access to specialist facilities such as sensory rooms and hydrotherapy

• evidence based literacy and numeracy interventions where relevant

19: We expect local authorities and colleges to work together in deciding what constitutes an equivalent of additional time for a student with high needs, and/or with an EHC plan, and – as explained in the top-up funding section of this guide – to discuss the level of top-up funding to ensure that it is sufficient.

National funding formula allocations for 2022 to 2023

20: The funding floor factor in the high needs NFF for 2022 to 2023 is 8% per head of 2 to 18 population, but this increase has been supplemented by the extra high needs funding announced on 16 December, which means that every local authority will receive at least 12% per head more than they received in 2021 to 2022.

21: The hospital education factor amount has been uplifted in line with the 8% funding floor factor. These increases are not calculated on elements of the formula that are subject to later updates and are in proportion to estimated population changes (so a projected decrease in population will result in a lower overall cash percentage increase). The hospital education funding amounts for 2021 to 2022 inform the basis of the amounts in the 2022 to 2023 provisional allocations. In a small number of cases some further adjustments are made to reflect changes notified by local authorities, including the full year increase for local authorities that were given a part year increase in 2021 to 2022 to reflect a change in hospital education provision. Further information can be found in Hospital education.

22: The limit on gains in the NFF is set at 11%, again calculated on the basis of per head of population and using the 2021 to 2022 funding baseline. The extra supplementary funding allocations announced in December 2021, however, mean that local authorities will actually see increases of up to 16%. Full details of the NFF for 2022 to 2023 and provisional allocations to local authorities were published in July 2021 and the DSG allocations, including the supplementary allocations, were published in December 2021.

23: The basic structure of the high needs NFF for 2022 to 2023 has not changed; however, there have been some more technical changes made, following responses to a consultation in early 2021:

• the historic spend factor has been updated for 2022 to 2023, to use 50% of local authorities’ actual spend in 2017 to 2018 rather than planned spend as previously used. The proportion of total funding going through the historic spend factor will reduce from 34% of the 2021 to 2022 formula allocations to 31% in 2022 to 2023 (including the supplementary high needs funding)

• due to the coronavirus (COVID-19) pandemic there is no appropriate 2020 attainment data to use for the 2 low attainment factors; therefore, 2019 data has been used in place of 2020 data for the 2022 to 2023 high needs allocations. This aligns with the approach taken in the schools NFF

24: For further information about support during the COVID-19 and education recovery, please refer to separate COVID-19 guidance on education, early years and children’s social care.

Important dates

25: The timeline below shows the implementation of the 2022 to 2023 high needs funding arrangements, including actions for local authorities and schools and colleges.

26: Schools and colleges must ensure the school census or individualised learner record (ILR) guidance is followed on all items that are, or will be, used for funding purposes, including elements of the national funding formula NFF. It is critical that all schools and colleges check the latest guidance to make sure that they understand what is required, including identifying those pupils or students for whom they receive high needs top-up funding.

October 2021

Department for Education:

• 2022 to 2023 guidance on the place change notification process will be published and a workbook issued to local authorities
• January 2021 school census data for special academies and free schools will be published
• 2020 to 2021 and 2021 to 2022 high needs place numbers will be updated (as of 1 October 2021)

Local authorities:

• continue discussions with all types of schools and colleges, and other local authorities, to ensure positive strategic supply and demand planning and agreement reached on 2022 to 2023 high needs place numbers, in preparation for completing the return to ESFA

Schools and colleges:

• continue discussions with local authorities and reach agreement on 2022 to 2023 high needs place numbers, in preparation for the local authority return to ESFA
• all maintained schools, academies, non-maintained special schools (NMSSs) and pupil referral units (PRUs), to complete the autumn school census
• further education (FE) colleges, sixth form colleges, independent learning providers (ILPs), 16 to 19 academies and special post-16 institutions (SPIs) are to submit 2021 to 2022 ILR R14

November 2021

Department for Education:

• the alternative provision (AP) free schools 2022 to 2023 place process is launched

Local authorities:

• deadline for local authority submission of 2022 to 2023 high needs place number changes and requests for local authority hospital education funding changes to ESFA
• deadline for requests to disapply conditions of grant relating to movement of funding from the schools block of the dedicated schools grant (DSG)

Schools and colleges:

• complete discussions with local authorities and reach agreement on 2022 to 2023 high needs place numbers, in preparation for the local authority return to ESFA
• AP free schools: discuss commissioning arrangements with local authorities and schools for the 2022 to 2023 academic year

December 2021

Department for Education

• 2022 to 2023 DSG schools, central school services and high needs block allocations published
• initial 2022 to 2023 DSG early years block allocations to be published

FE providers

• FE colleges, sixth form colleges, ILPs, 16 to 19 maintained schools and academies, and SPIs to submit 2021 to 2022 ILR R04

January 2022

Department for Education:

• 2022 to 2023 high needs place change notification outcomes to be published on GOV.UK
• publish 2020 to 2021 R14 individualised learner record (ILR) data returned by colleges
• 2-week ‘enquiry window’ for local authorities and relevant schools and colleges to raise place change related issues

Local authorities:

• check published outcomes and ensure queries are discussed with relevant schools and colleges and, if necessary, those raised during the 2-week enquiry window
• this should include checking the outcomes for schools and colleges located in other local authorities where a local authority places large numbers of students
• deadline for submitting the final 2022 to 2023 authority proforma tool (APT) to ESFA. This covers all mainstream maintained schools and academies: including pupil numbers on the October 2021 census in resourced provision (RP); and special educational needs (SEN) units to support the calculation of funding for occupied and unoccupied places

Schools and colleges:

• relevant schools and colleges to check 2022 to 2023 funded place numbers are correctly reflected in the published outcomes, ensure any queries are discussed with your local authority and, if necessary, those raised with ESFA during the 2-week enquiry window
• deadline for AP free schools 2022 to 2023 place number returns
• all maintained schools, academies, NMSS and PRUs to complete spring 2022 school census

February 2022

Local authorities

• 2-week enquiry window closed for raising queries with ESFA regarding 2022 to 2023 funded place numbers
• review of, and amendments to, education, health and care (EHC) plans must be completed by 15 February for pupils moving into, or between, schools in that calendar year
• 2022 to 2023 budgets issued to maintained mainstream schools, special schools and PRUs

Schools and colleges

• 2-week enquiry window closes for raising queries with ESFA regarding 2022 to 2023 funded place numbers
• FE colleges, sixth form colleges, ILPs, 16 to 19 maintained schools and academies and SPIs to submit 2021 to 2022 ILR R06

March 2022

Department for Education:

• publication of the 2022 to 2023 high needs place numbers for schools and colleges
• 2022 to 2023 academic year allocations to be issued to FE colleges, sixth form colleges, free schools, academies, NMSS, SPIs, ILPs and 16 to 19 academies
• local authorities’ DSG updated

Local authorities:

• review of, and amendments to EHC plans, including specifying the post-16 provision and naming the school or college, must be completed by 31 March for students moving from a secondary or special school to a college or apprenticeship in that calendar year
• complete EHC plan review process by 31 March for students moving between post-16 institutions, where a young person is expected to transfer to a new post-16 institution in the new academic year

Schools and colleges:

• check high needs allocation is received and correct

June 2022

Department for Education:

• issue to local authorities the NFF import/export adjustments data at school and college level and the special free school adjustments

Local authorities:

• review NFF import/export adjustment data

FE providers:

• FE colleges, sixth form colleges, ILPs, 16 to 19 academies and SPIs to submit 2021 to 2022 ILR R10

July 2022

Department for Education:

• publish 2022 to 2023 high needs place numbers updated (as of 1 July 2022)
• 2022 to 2023 DSG update to reflect final school and college level allocation decisions, NFF import/export adjustments and special free school adjustments

High needs funding and the dedicated schools grant (DSG)

27: The dedicated schools grant (DSG) is the main source of government funding for the provision of education by local authorities and schools and colleges in England. Its use is governed by the DSG: conditions of grant, one of which requires the grant to be spent in accordance with the School and Early Years Finance (England) Regulations 2022. The DSG is intended to meet the educational costs of pupils in primary and secondary education, as well as the educational costs of special educational provision for children and young people with special educational needs (SEN) in post-16 provision, including those aged over 19 and up to 25 who have an education, health and care (EHC) plan. The DSG cannot be used for purposes other than those specified in the conditions of grant and regulations.

28: The DSG is divided into four notional blocks - the schools block (for mainstream schools and academies), the high needs block, the central school services block and the early years block. Each of the four blocks of the DSG is determined by a separate national funding formula (NFF).

29: Transfers between blocks can be made from the high needs and the central schools services blocks. Movement from the early years block can be made in compliance with the early years pass through rate conditions, details of which can be found in the early years entitlements: local authority funding of providers operational guide (current published guidance is for 2022 to 2023). The schools forum must be consulted on all transfers between blocks. The schools block is ringfenced which means at least 99.5% of funding allocated through this block must be spent for the purposes specified in the conditions of grant. Local authorities retain the ability to transfer up to 0.5% of funding out of the schools block, with the agreement of the schools forum.

30: A disapplication will be required for transfers out of the schools block above 0.5%, or any amount without schools forum approval; this applies to any transfers even if approval has been given in previous years. Local authorities should consult with local maintained schools and academies; the schools forum should take these views into account before making their decision. The deadline for local authorities to submit a block movement disapplication request is 19 November 2021. Further details, including the schools block movement disapplication proforma and details of supporting documentation, can be found in the movements between blocks section of the schools revenue funding operational guide 2022 to 2023.

31: Most proposals by local authorities to move funding from their schools block arise as a result of pressures on their high needs budgets. In view of the £780 million increase in high needs funding in 2022 to 2023, which comes on top of the increases of more than £1.5 billion over the previous two years, we are expecting local authorities to carefully consider the impact of these increases when making decisions on block movements.

32: The local authority’s schools forum is one way through which partnership working can be strengthened, particularly with schools, to ensure their spending decisions are most effective. However, to fulfil local authorities’ statutory duties to keep the services and provision for children and young people with special educational needs and disabilities (SEND) under review, as required by the Children and Families Act 2014 and in planning to ensure good quality provision can be developed and sustained in line with available resources, local authorities should engage with all of those providing education in their area. This includes early years settings and colleges, as well as parents of children and young people with SEND, and young people themselves.

DSG management plans

33: An increasing number of local authorities have been incurring a deficit on their overall DSG account, largely because of overspends within their high needs block. The DSG: conditions of grant set out that any local authority with an overall deficit on its DSG account at the end of the financial year, or whose DSG surplus has substantially reduced during the year, must be able to present a plan to the department and cooperate in handling that situation by:

• providing information, as and when requested by the department about its plans for managing its DSG account in the 2021 to 2022 financial year and subsequently
• providing information, as and when requested by the department about pressures and potential savings on its high needs budget
• meeting with department officials, as and when they request to discuss the local authority’s plans and financial situation
• keeping the schools forum updated regularly about the local authority’s DSG account and plans for handling it, including high needs pressures and potential savings

34: We have developed a DSG deficit management plan template and accompanying guidance for local authorities to use to develop evidence-based and strategic plans covering the provision available for children and young people with SEND. In all cases, we expect local authorities’ management plans to focus on how they will bring in-year spending in line with in-year resources.

35: The high needs benchmarking tool helps to facilitate a better understanding of how a local authority’s high needs expenditure and use of provision compares with that of other authorities; and to prompt local discussion of how current spending patterns might need to change.

36: Further details on this process can be found within the DSG management plans section of the schools revenue funding operational guide 2022 to 2023.

How local authority high needs allocations are calculated

37: ESFA makes an allocation to local authorities for high needs as part of the dedicated schools grant (DSG). High needs block allocations are calculated through the high needs national funding formula (NFF).

38: Local authorities decide how much to set aside in their high needs budget for place and top-up funding given to schools and colleges, and for central high needs services (which may be devolved to schools or colleges and funded through a service level agreement). This should take account of the overall amount required to meet the continuing needs of children and young people with SEND, and those who need AP. Local authorities should account for aspects of provision related to SEND and AP, as permitted by the School and Early Years Finance (England) Regulations 2022. Schedule 2 to the regulations sets out the categories of central expenditure that local authorities are permitted to incur.

High needs national funding formula factors explained

39: There are 12 elements to the high needs NFF. These form the basis for local authority high needs block allocations. The following diagram shows the funding factors in the high needs NFF. See the high needs national funding formula: technical note for more information.

Image 1: Structure of the high needs national funding formula

Figure 1: the structure of the high needs national funding formula

40: The limit on gains under the formula is 11%, calculated on a per head of 2 to 18 population basis. It should be noted, however, that further high needs supplementary funding allocations were announced in December 2021, in addition to the NFF allocations, following the autumn 2021 spending review. These allocations provide some local authorities with increases of up to 16%.

41: Further adjustments outside the normal formula distribution and allocation arrangements may be made to reflect other changes, in particular for those local authorities with a special free school in their area or pupils resident in their area attending a special free school in another local authority. Information on how adjustments for special free schools have been calculated is available in the 2022 to 2023 local authority funding: special free schools adjustments guide. There are exceptions to the previous 2021 to 2022 arrangements in those situations where pre-existing provision is being transferred into a new free school.

35: Adjustments may also be made as a result of local changes, for example, if a non-maintained special school (NMSS) becomes a special academy, or a further education (FE) college merges with another college in a different local authority area, depending on the timing of the changes.

Basic entitlement factor

43: The basic entitlement factor allocates funding using data on the pupil and student numbers in specialist provision and performs the same role as its counterpart within the mainstream schools NFF and 16 to 19 NFF. The basic entitlement funding rate is £4,660 per pupil or student for 2022 to 2023 and is subject to an area cost adjustment.

44: As the formula also allocates high needs funding to ESFA for certain schools and colleges that it funds directly, ESFA is treated like a local authority, and it attracts £4,660 for each pupil in NMSS and each student in special post-16 institutions (SPIs).

Historic spend factor

45: The historic spend factor has been updated for 2022 to 2023, to provide every local authority with a set percentage (50%) of their 2017 to 2018 spending on high needs, and is now based on the local authority’s actual spend from 2017 to 2018 outturn data rather than planned spend as previously used.

Proxy factors

46: The remaining high needs funding, after deductions for the basic entitlement, hospital education and historic spend factors, is then available for the proxy factors listed below:

• population factor
• free school meals (FSM) factor
• income deprivation affecting children index (IDACI) factor (using the latest IDACI 2019 data)
• bad health factor
• disability factor
• key stage 2 low attainment factor
• key stage 4 low attainment factor

47: Due to the coronavirus (COVID-19) pandemic, there is no appropriate 2020 attainment data to use for the 2 low attainment factors. Following consultation, 2019 data has been used as a proxy for 2020 for the impact of the high needs NFF, 2022 to 2023.

48: Weightings are assigned to determine the amount allocated through each of the proxy factors. The weightings are applied separately for SEND (90% of funding) and AP (10% of funding), before being combined. The weightings remain the same in the 2022 to 2023 formula, as in previous years.

Funding floor factor

49: This ensures local authorities do not fall below a minimum level of funding. The factor is applied to the funding calculated through historic spend factor and proxy factors. The per head floor ensures relevant elements of the funding increase on a per head basis from the 2021 to 2022 funding baseline by at least 8% in 2022 to 2023, based on the Office for National Statistics (ONS) estimated population of 2 to 18-year-olds. It should be noted, however, that further high needs funding allocations were announced in December 2021, in addition to the NFF allocations, following the autumn 2021 spending review. The NFF funding floor plus these supplementary funding allocations provide all local authorities with increases of at least 12% per head.

Hospital education, AP, teachers’ pay/pension and supplementary funding factor

50: Local authorities pay for places in their maintained hospital schools and the equivalent academies, and for other hospital education placements and services.

51: The local authority hospital education allocations for 2022 to 2023 are calculated as the 2021 to 2022 hospital education funding, plus the full year equivalent of adjustments made during 2021 to 2022, plus an 8% uplift.

52: This factor also includes funding for AP and other historic pay and pensions costs that prior to April 2021 were paid as separate grants. The AP (including hospital education) teachers’ pay and pension funding, together with the pensions supplementary grant funding, is the same as for the final 2021 to 2022 allocations. These amounts are for historic costs and, therefore, have been held at the same level as in the 2021 to 2022 formula. The basic entitlement factor includes an uplift to reflect the remaining funding for historic teachers’ pay and pensions costs incorporated into the NFF from April 2021.

53: The factor funding is calculated as a sum of the hospital education funding, AP pay and pensions and pensions supplementary grant funding. Further information is available in the teachers’ pay and pensions funding section

Import/export adjustment

54: This is a net adjustment to local authorities’ DSG, implemented through the July DSG update, reflecting the difference between high needs pupils and students living in one local authority and attending a school or college in another. The timelines for making these adjustments are included in Important dates.

How the import/export adjustment works

55: The majority of the high needs NFF is designed to allocate funding to local authorities for the needs of the children and young people who live in the local authority’s area, regardless of where they are educated. Local authorities face higher costs if they attract more pupils and students with high needs who live outside the local authority area into their schools and colleges because they are expected to pay for the costs of high needs places in schools and colleges in their area. Conversely, local authorities that place fewer pupils and students with high needs in other local authority schools and colleges face lower costs. We have, therefore, included an adjustment in the funding formula to reflect where pupils or students live in one local authority and attend a school or college in another.

56: The calculation uses school census and ILR data and compares the number of high needs pupils and students. It is calculated as a net figure based on:

• the number of high needs pupils and students educated at a school or college in the local authority area minus
• the number of high needs pupils and students living in their area and
• the net number of pupils and students, either positive or negative, is then multiplied by £6,000

57: If the net import/export adjustment is positive, the local authority is considered a net importer. This is because the local authority provides education to more pupils or students than live in their area and so faces higher costs (for example, because they pay for more high needs places at a school or college in their area).

58: If the net import/export adjustment is negative, the local authority is considered a net exporter. This is because the local authority has more pupils or students living in their area attending schools or colleges in other areas and so faces lower costs (for example, because they do not pay for their high needs places at schools or colleges outside their area).

59: Where the number is nil, and imports and exports balance, the cost to the local authority is neutral and no adjustment is made.

Import/export data

60: The 2022 to 2023 import/export data will be made available to local authorities at school and college level in June 2022 and the total net adjustment reflected in the July DSG update. In the meantime, the 2021 to 2022 import/export data is used provisionally in the NFF and DSG allocations.

61: The pupils and students counted in the calculation of the adjustment are shown below. From the January school census (aged 4 to 18) for pupils and students:

• with top-up funding in mainstream schools and academies
• in special schools and academies (including special free schools)
• in NMSS

From ILR R06 for students aged 14 to 18 and those aged 19 to 24 with education, health and care (EHC) plans who receive top-up funding in:

• FE colleges
• sixth form colleges
• independent learning providers (ILPs)
• 16 to 19 academies
• SPIs

62: For all special schools and colleges, the data used for the import/export adjustments should be broadly consistent with the numbers of places funded in that academic year. It should be noted that places for post-16 students with high needs may be funded through a local arrangement with the provider local authority, not necessarily as places in the school’s or college’s allocation.

63: Schools and colleges must ensure that only those pupils and students with high needs are included on the relevant school census and individualised learner record (ILR). Pupils and students with high needs are those who have additional support assessed by the local authority as costing more than £6,000 per annum and for whom the local authority is paying top-up funding to the school or college. In their discussions with schools and colleges, it is also important that local authorities are aware of the number of pupils and students with high needs that are included on the school census and ILR and understand the impact on their budgets.

64: The import/export adjustment does not use any data relating to pupils in AP. This is because the school census data we would use for such an adjustment is not accurate enough. The pattern of admissions and placements in AP can vary significantly at different times and a school census snapshot does not necessarily capture pupil movement in the same way as for special schools.

65: The import/export data is based on where the child or young person lives and receives their education. Further information about the responsibility for pupils and students who move between local authorities is detailed in Annex 2.

High needs place deductions

66: For the following schools and colleges, place funding is included in local authorities’ initial DSG allocations and then deducted from the provider local authority’s DSG by ESFA to pay the funding direct:

• mainstream academies and free schools
• special academies and free schools
• AP academies
• 16 to 19 academies and free schools
• general FE colleges, sixth form colleges and ILPs

67: The number of high needs places deducted is based on the annual place change notification process. ESFA do not deduct for places at centrally funded NMSS, SPIs, and some FE colleges; these deductions are effectively made through the NFF import/export adjustment.

68: Deductions are made for some places at AP free schools based on census data. For the 2022 to 2023 academic year, deductions will be made for places at AP free schools that opened during or before the 2020 to 2021 academic year. The deduction is from the local authority where a pupil lives, based on the number of pupils aged 5 to 15 years, main or sole registered at that AP free school at the time of the October 2021 census.

69: The academic year place funding rates are shown in the school funding table, with further information in the section on type of school. The 2021 to 2022 and 2022 to 2023 academic year place amounts are prorated as follows, to calculate DSG deductions for the 2022 to 2023 financial year, by place and type of school or college.

Table 1: pre-16 DSG deductions by type of school

Type of school	AP: 2021 to 2022 A/Y (*5/12)	AP: 2022 to 2023 A/Y (*7/12)	SEN unit/resourced provision: 2021 to 2022 A/Y (*5/12)	SEN unit/resourced provision: 2022 to 2023 A/Y (*7/12)	Special schools: 2021 to 2022 A/Y (*5/12)	Special schools: 2022 to 2023 A/Y (*7/12)
Mainstream academies and free schools	N/A	N/A	£2,500 or £4,167	£3,500 or £5,833	N/A	N/A
Special academies and free schools	£4,167	£5,833	N/A	N/A	£4,167	£5,833
AP academies and AP free schools	£4,167	£5,833	£4,167	£5,833	N/A	N/A

Table 2: post-16 (SEN places) DSG deductions by school or college type

Type of school	Schools: 2021 to 2022 A/Y (*4/12)	Schools: 2022 to 2023 A/Y (*8/12)	Post-16 schools (16 to 18): 2021 to 2022 A/Y (*4/12)	Post-16 schools (16 to 18): 2022 to 2023 A/Y (*8/12)	Post-16 schools (19 to 24 with EHC plans): 2021 to 2022 A/Y (*4/12)	Post-16 schools (19 to 24 with EHC plans): 2022 to 2023 A/Y (*8/12)
Mainstream academies and free schools	£2,000	£4,000	N/A	N/A	N/A	N/A
Special academies and free schools	£3,333	£6,667	N/A	N/A	N/A	N/A
AP academies	£2,000	£4,000	N/A	N/A	N/A	N/A
16 to 19 academies/FE/ILPs	N/A	N/A	£2,000	£4,000	£2,000	£4,000

70: The above rates are multiplied by the number of places to calculate the total deduction amount.

How funding is allocated to schools and colleges

71: Schools and colleges receive high needs funding in different ways:

• core funding: the annual allocation a school or college receives either directly from the provider local authority (for maintained special schools and pupil referral units (PRUs), based on the financial year); or from Education and Skills Funding Agency (ESFA), (for special academies, colleges, non-maintained special schools (NMSS) and special post-16 institutions (SPIs), based on the academic year)
• top-up funding: the funding required, over and above the core funding, to enable a pupil or student with high needs to participate in education and training
• funding under a service level agreement: where a service relating to special educational needs and disabilities (SEND), or alternative provision (AP) has been commissioned by a local authority and is delivered by a school or college: the local authority can fund that service from its high needs budget, where permitted by the funding regulations. Local authorities also allocate high needs funding to independent schools to meet the cost of the placements they commission, rather than as place and top-up funding

72: Funding by type of education provider provides further information on how high needs provision is funded in different types of school or college for both pre and post-16 pupils and students.

High needs place funding

73: Place funding is allocated to all types of special schools, apart from independent special schools; to all types of mainstream school with a special educational needs (SEN) unit or resourced provision, and/or a sixth form that has pupils with high needs; and to all types of college that are eligible for funding from ESFA. The place funding is allocated as an annual amount of core high needs funding. Once place funding is allocated, it is not associated with or reserved for a specific local authority or individual pupil or student. It is for the school or college to decide how best to apportion their total allocated place funding across the actual number of places commissioned by local authorities, taking into account the provision and support that may be specified in the individual pupils’ or students’ education, health and care (EHC) plans.

74: Place funding is not withdrawn if an individual does not occupy a funded place. It provides all eligible schools and colleges with a guaranteed budget for the year and gives them a degree of financial stability. A local authority may not seek to recover funding for places which it perceives as being unused from the previous or current academic year. Similarly, local authorities should not automatically be charged an extra £6,000 or £10,000 per head top-up funding for a pupil or student with high needs if a school or college has filled all funded places (irrespective of which local authority has filled them). Further guidance, including an example, can be found in where pupil or student numbers exceed allocated places in a school or college.

75: Local authorities may, with the agreement of the relevant members of the schools forum, retain part of the place funding of maintained special schools and pupil referral units (PRUs), to fund specified central services relating to maintained schools only. Further information about place funding for alternative provision (AP), PRUs, AP academies and AP free schools can be found in Alternative provision (AP), including information on the different funding arrangements for pre and post-16 pupils.

How to determine funded place numbers

76: Place funding should broadly reflect both local authorities’ recent commissioning activity and strategic planning, to secure suitable special educational needs and disabilities (SEND) provision and AP, in line with their statutory responsibilities. In determining the number of funded places for individual schools and colleges, local authorities should consider all high needs provision available in their area and take into account not only their own commissioning decisions, but also the commissioning decisions of other local authorities. In the case of AP, local schools’ commissioning activity and plans should also be considered.

77: Dialogue between local authorities and all schools and colleges that offer high needs provision is important when preparing for the allocations of high needs place funding for the following academic year. Local authorities should consult with schools and colleges in their area and discuss both current numbers of places being taken up, which will be included on the school census and individualised learner record (ILR) returns, and the number of places required in future. Where a school or college believes it is not being funded for the correct number of places, it should raise this with the provider local authority. These discussions must take into account the total number of places required to meet the needs of all local authorities, not just those of the local authority in which the school or college is located. This is particularly important for colleges and special schools, as the import/export adjustment should ensure that funding in the local authority’s dedicated schools grant (DSG) reflects those pupils and students with high needs resident in one local authority area who attend a school or college in other areas.

78: Where a school or college is admitting pupils or students with high needs from multiple different local authorities, the provider local authority should first seek information from the school or college on the number of places currently being commissioned from each local authority and how those numbers are expected to change in the following academic year. Significant changes may be confirmed with the commissioning local authorities concerned, and they should also proactively contact the relevant provider local authority in such circumstances. When doing so, commissioning local authorities should provide clear and accurate information to the provider local authority in good time, to enable collation of this information in advance of the place change notification process deadline. We are aware of particular issues that may arise when further education (FE) colleges in different areas merge into a single college and we expect that the approach described is adopted in these circumstances.

Changes to place numbers

79: Guidance on the place change notification process will be published in October 2021. It will explain the process for notifying ESFA of changes to 2022 to 2023 high needs place numbers at:

• academies
• free schools (excluding AP free schools), FE colleges, sixth form colleges and independent learning providers (ILPs)
• SPIs not previously funded by ESFA

80: The outcomes from the high needs place change process, for academic year 2022 to 2023 (published in January 2022). A two-week enquiry window follows, allowing local authorities and schools and colleges to raise significant issues.

81: AP free schools will receive guidance on notifying ESFA of their proposed high needs place numbers for 2022 to 2023 in November 2021.

82: 2022 to 2023 place funding allocations for NMSS are based on the October school census and existing SPIs allocations are based on ILR R06 data.

83: Local authorities have local flexibility to change funded place numbers at maintained schools and PRUs, and these numbers should be included on each local authority’s section 251 (s251) budget return for 2022 to 2023.

84: If a local authority maintained school or PRU converts to an academy, place numbers must be agreed between the local authority and school. To ensure that the school is funded on the correct basis, the local authority should notify the department’s project lead of the agreed place number. This is recognised by completion of the department’s ‘notification of changes to funded high needs places’ form. This is supplied by the department’s project lead and must be returned before the school converts. If no notification is received, place numbers recorded in the 2021 to 2022 s251 (September to March) will be rolled forward.

85: A ‘notification of changes to funded high needs places’ form must be completed for all schools where post-16 places are required. This is because post-16 place data is not set out within the s251 and may even be included within the recorded pre-16 place numbers. In these cases, completion of the form will ensure clarity of the split between pre- and post-16 requirements.

Where pupil and student numbers differ from allocated places

86: ESFA is unlikely to revise annual allocations to schools and colleges where the number of commissioned places changes after the annual processes. We recognise that, often, there will be a difference between the number of funded high needs places and the actual number of pupils or students in attendance. However, as explained in High needs place funding, place funding is not reserved for individuals; it is for schools and colleges to apportion the total allocated place funding across the actual number of pupils and students with high needs. In most cases, the variance between place numbers and pupils or students is small with no, or marginal, impact on cost.

87: Place funding should not be withdrawn if an individual does not occupy a funded place and a local authority may not seek to recover funding for places it considers unused in the previous or current academic year.

88: A school or college should approach the provider local authority if the number of pupils or students agreed as having high needs by the relevant local authority exceeds the number of funded places. In practice, that could result in the school or college incurring additional costs in making special provision not met through the top-up funding amount normally paid. We expect the provider local authority to engage with the school or college to agree how the costs of the additional special provision required are to be met, and these conversations should take place as early as possible. Centrally funded non-maintained special schools (NMSSs), special post-16 institutions (SPIs) and a small number of ILPs and FE colleges should approach ESFA.

89: The provider local authority should not automatically be charged an additional £6,000 or £10,000 per pupil or student. The amount should reflect the actual costs of making additional special provision available, which may only be marginal. Importantly, the provider local authority and the school or college should seek to agree how those costs are to be met. Local authorities need to be mindful that the import/export adjustment should compensate the provider local authority for actual pupils or students living in other local authority areas who attend the school or college, albeit in the subsequent financial year. This will avoid the position where the commissioning local authority effectively funds twice – both through increased top-up funding direct to the school or college and through the £6,000 import/export adjustment in the national funding formula (NFF). In particular, these arrangements apply to colleges and special schools that are experiencing year-on-year growth in the number of pupils and students with high needs that they admit.

Example: where pupil or student numbers exceed allocated places in a school or college

90: The following is an example of how the high needs funding arrangements should operate when a school or college has more pupils or students with high needs than the number of places for which it has been funded. Although it is illustrated using a college located in a local authority area (the provider local authority) with several other local authorities also commissioning places, similar arrangements may also apply to other schools and colleges, including special academies.

91: The example demonstrates how the place funding for schools and colleges, and consequent deductions from local authorities’ high needs allocations work together with the import/export adjustment. This shows the flow of high needs funding between local authorities and schools and colleges when a school or college has to make additional special provision for a number of pupils or students that exceeds the funded place number, including where inter-authority collaboration is required.

Example:

• following discussion with a college and where there is a change from the previous academic year, the provider local authority submits the total high needs place numbers to ESFA in November, through the place change notification process, in advance of the start of the academic year
• in this example, the local authority and college have agreed on 100 places for the 2022 to 2023 academic year, which comprises the total number of places to be filled by high needs students from all local authorities
• the number of college places to be funded is published in January 2022 by ESFA and, during the subsequent enquiry window, the college and local authorities check the number, ensuring they are content that it reflects local discussions
• ESFA issues an allocation to the college in March 2022, in advance of the academic year. This reflects the 100 places, providing £600,000 of high needs funding, (100 places x £6,000 place funding)
• the provider local authority’s DSG will also be updated in March 2022 and 100 places deducted from their high needs allocation at £6,000 per place, prorated for the academic year, based on the 8 months from August to March (100 places x £4,000)

92: The commissioning local authority (the local authority in which the student is ordinarily resident) needs to have notified the college directly that the student has high needs and have agreed top-up funding. The provider local authority (if not commissioning the place) and ESFA do not need to be involved in these conversations. However, we would encourage neighbouring local authorities to collaborate on the special provision required for their students. This includes cooperation on associated commissioning arrangements and top-up funding levels.

93: Extending this example further:

• in the lead up to the academic year several local authorities have commissioned further high needs places in excess of the 100 places that the college has received place funding for. Therefore, the college has 120 high needs students at the start of the academic year 2022 to 2023
• this has resulted in additional costs for the special provision required by these extra 20 students that the college cannot meet through its existing funding streams. This includes the £600,000 high needs place funding in their allocation and standard top-up funding rates in respect of the 120 high needs students. The college should not seek to recover these costs through the top-up funding sought from the authorities commissioning places for the extra 20 students. This is because places funded at £6,000 per place are not reserved for individual pupils or specific local authorities
• therefore, the college discusses with the provider local authority, if possible before the start of the academic year, the scale of the additional special provision that it is being expected to make available and the costs involved. It is agreed that the provider local authority will allocate a further £50,000 of high needs funding to contribute to the additional costs incurred by the college. This is to help meet the additional costs of making the provision required by the additional students, on top of the normal funding streams
• it is important to note that within our ‘lagged’ funding system, we would normally expect the costs of in-year growth to be met by the college. At the same time, local authorities will have received an increase in high needs funding to recognise population and other factors that have contributed generally to the costs of growth. Where that growth is significant in a college, it is reasonable for the provider local authority to consider what extra funding might be needed by the college to maintain the required level of provision, on an exceptional basis. The college should not expect the provider local authority to pay an extra £6,000 for every extra student placed over and above the college’s 100 places. The provider local authority should be compensated for the costs of the high needs’ places filled by students resident in other local authorities, including 5 of the additional 20 students via the import/export adjustment in the 2023 to 2024 financial year. This includes the final term of the 2022 to 2023 academic year
• in this example, 50 students live in other local authorities. This is recorded on the college’s ILR in February 2023 and + £300,000 (50 x £6,000) will subsequently contribute to the provider local authority’s net import/export DSG adjustment for 2023 to 2024

94: It is important to note that this example is provided for a college and some details may vary depending on the school or college or place type.

95: Where ESFA acts as the provider local authority for NMSS, SPIs and a small number of centrally funded colleges, funding is also provided on a lagged basis. This means that the number of pupils or students who attend one of these schools or colleges in any given year is used to calculate their respective place funding allocation for the following year. The funding allocation will subsequently be deducted from the relevant commissioning local authorities through the NFF import/export adjustment.

96: Given these arrangements in place, centrally funded schools and colleges should not seek to secure any additional place funding from any local authority to avoid a situation where a local authority effectively funds a place twice. If an NMSS, SPI or centrally funded college has significant numbers of pupils or students over and above their allocated place numbers, which raises funding concerns as a result of the lagged approach, they should contact ESFA via the enquiry form.

Teachers’ pay and pensions funding

97: From the 2021 to 2022 financial year the majority of the historic teachers’ pay grant (TPG), teachers’ pensions employer contribution grant (TPECG) and pensions supplementary fund money has been incorporated into the high needs NFF allocations to local authorities, as follows:

• the basic entitlement factor value in the NFF was increased by £660 to reflect the TPG/TPECG previously paid to local authorities for their maintained special schools, special academies and independent special schools; and

• funding equivalent to the amounts previously paid to pupil referral units, AP academies and hospital schools was added into the hospital education factor. This factor now covers hospital education, the historic teachers’ pay/pensions funding for AP and supplementary pensions funding. To calculate the values for the teachers’ pay/pensions element, we multiplied the number of places by the September to April TPG rate plus the corresponding TPECG rate and then multiplied by 12/7 to get an annualised amount. These rates and places numbers were taken from the high needs providers tabs of the TPG allocations 2020 to 2021 and TPECG 2020 to 2021 allocations documents. Further detail explaining the calculation of this formula factor is provided in the NFF publication for schools and high needs: 2022 to 2023, published in July 2021

98: The pupil numbers on which the NFF basic entitlement factor is based, the fact that the NFF includes an area cost adjustment to those numbers, and the cash value of the teachers’ pay and pensions element of the AP factor, all mean that these elements of the NFF are unlikely to generate exactly the sum that local authorities are required to pass on, which is based on current place numbers, including the 40 place minimum. This may mean that local authorities have to subsidise this element of funding from the more general increases in high needs funding that they are receiving, or indeed may receive more funding through the NFF than they need to pass on.

99: The following provides further detail on how local authorities should pass this funding on to schools under the requirements outlined in the DSG: conditions of grant, including:

• the arrangements for non-maintained and independent special schools
• the arrangements for new and growing schools in receipt of high needs funding

Established special, AP and hospital maintained schools and academies

100: Local authorities must allocate this historic teachers’ pay and pensions employer contribution grant funding to maintained special schools, pupil referral units, special and AP academies and maintained and academy hospital schools, on a per place basis according to the agreed number of funded places in the financial year 2022 to 2023. The condition of grant requires that this additional high needs funding must not result in a reduction to the number of places, for which £10,000 per place is allocated to a school or hospital, or to the top-up funding in respect of individual pupils, and must be disregarded in applying the protection for special schools set out in Annex 1. This is a separate high needs funding stream (that is, neither place funding nor top-up funding), as follows:

• minimum of 40 places per school must be funded
• no recoupment for academies, so local authorities must fund academies directly
• this funding must be excluded from any special schools minimum funding guarantee (MFG) calculation

101: As for 2021 to 2022, the amounts of funding per place should be equivalent to the amounts of TPG, TPECG and pensions supplementary fund paid in the 2020 to 2021 academic year, prorated for the full year. The TPG and TPECG rates would have been decided locally, in accordance with the conditions of grant that applied to those grants, although local authorities may have used the same rates as used in calculating the grant allocations to them. The rate and place numbers for the TPG allocations 2020 to 2021 and TPECG 2020 to 2021 allocations are listed in the respective grant allocations documents, available on the “high needs providers” data tabs (provided above). Local authorities should, therefore, use the same per place annual amount used in 2021 to 2022 and apply that to any changes in place numbers after April 2022. High needs funding to replace the pensions supplementary fund should be paid as a full year equivalent of the same amount the school received before.

102: Local authorities will be expected to pay the equivalent of the TPG and TPECG per place, on the basis of the agreed number of funded places in the next academic year, even if there are increases or reductions in the number of places. As noted above, this may mean that local authorities have to subsidise this element of funding from the more general increases in high needs funding that they are receiving, or may receive more funding through the NFF than they need to pass on. No adjustments in funding should be made for actual over or under occupancy.

Growing schools (special, AP and hospital maintained schools and academies)

103: Funding through the NFF is on the basis of lagged data, so no additions to the 2022 to 2023 high needs NFF will be made in respect of growing schools beyond those made in December 2021 (that is, the adjustment using the latest special school census data, plus any adjustment for new AP free schools not previously included in the relevant factor amounts). Local authorities will be required to use their high needs funding allocations to pay growing schools, the equivalent of the TPG and TPECG per place on the basis of the number of funded places in the next academic year. This is irrespective of any increases or reductions in the number of places. No adjustments in funding should be made for actual over or under occupancy.

New special and AP free schools

104: For new special and AP free schools, open after September 2021, whose place numbers and pupil numbers were not available in time for the DSG high needs block update in December 2021, local authorities will receive the equivalent of the teachers’ pay grant, teachers’ pensions (employer contributions) grant and pensions supplementary fund for 2022 to 2023 via adjustments to the DSG in July 2022 or November 2022.

105: Authorities will continue to have the flexibility to disburse these payments in recognition of the specific costs of the free schools’ teaching workforce, following consultation. It should be understood that these grants continue to recognise legacy costs and are not being increased to reflect later pay or pensions increases. The minimum 40 place funding per school will apply to new schools. No adjustments in funding provided to the local authority or to schools should be made for actual over or under occupancy.

Non-maintained special schools (NMSS)

106: NMSSs will continue to receive funding directly from ESFA at a level equivalent to their previous TPG, TPECG and pensions supplementary fund payments, without any recoupment or deductions from local authorities’ high needs NFF allocations. These payments will be distinct from any payments of place funding, which will remain at £10,000 per place.

Independent special schools

107: The high needs NFF also includes additional TPG and TPECG funding, on the basis of data returned in the AP census on the number of children placed in independent special schools. There is no requirement on local authorities to pass this funding on to the schools, but the additional NFF funding enables local authorities to take account of any school’s legacy pension cost increase that may be included in the school’s request for funding for a pupil placement.

FE colleges and SPIs

108: FE colleges and some SPIs that contribute to the pension scheme receive the teachers’ pension scheme employer contribution grant, which is based on their audited contributions into the pension scheme.

109: These arrangements have been confirmed until the end of the 2021 to 2022 academic year.

Top-up funding

110: Top-up funding (sometimes referred to as element 3) is the funding required over and above the core funding (sometimes referred to as elements 1 and 2) a school or college receives to enable a pupil or student with high needs to participate in education and learning. This is paid by the commissioning local authority (or sometimes school in the case of alternative provision) and should reflect the costs of additional support to meet the individual pupil or student’s needs. Top-up funding can also reflect costs that relate to the facilities required to support a pupil or student’s education and training needs (either for individuals or on offer to all) and can take into account expected place occupancy levels and other factors.

111: Most of this section covers how top-up funding works for children and young people with special educational needs and disabilities (SEND). Further information about how top-up funding works for pupil referral units (PRUs), alternative provision (AP) academies and AP free schools is set out in Alternative provision (AP).

112: Although many of the pupils and students receiving high needs funding will have associated education, health and care (EHC) plans, local authorities have the flexibility to provide high needs funding outside the statutory assessment process for all children and young people with high needs up to the age of 19.

Organising top-up funding at local authority level

113: Local authorities play an essential statutory and strategic role in planning education services and places, and in supporting local schools and colleges, within a robust financial framework. They should work closely with institutions that have pupils or students with high needs. In doing so, they should ensure there are clear processes for identifying, determining, and allocating appropriate levels of top-up funding.

114: One of a local authority’s statutory responsibilities is to keep the special educational provision in their area under review, working with parents, young people, schools and colleges, as set out in chapter 4 of the SEND Code of Practice.

115: A wide range of educational providers are required to co-operate with local authorities in such reviews, including maintained schools; academies; further education (FE) and sixth form colleges; independent and non-maintained special schools (NMSS); special post-16 institutions (SPIs); and other providers of special educational provision, including relevant early education providers. The local offer must include information about the arrangements the local authority has for funding children and young people with SEND, including any agreements about how providers will use any funding that has been allocated to them.

116: We expect commissioning local authorities to work constructively with schools and colleges, with the aim of reaching agreement on the overall levels of top-up funding required. This should include agreeing what additional needs mainstream schools and colleges should meet from other elements of their funding (taking account of any additional support or funding provided centrally) and where top-up funding will be provided. This information should be published as part of the local offer of SEND services and provision.

117: Children and young people with high needs often access provision outside the local authority area in which they are resident. An authority’s local offer should reflect all the SEND provision which is available to support children and young people resident in its area. Therefore, we encourage neighbouring local authorities to collaborate when reviewing their local offer of provision and considering arrangements for top-up funding.

118: Many local authorities have systems which indicate the range of top-up funding that might be provided for children and young people with a particular complexity of need (sometimes referred to as ‘banded’ funding systems). These can be helpful in providing clear and transparent funding arrangements for many types of need, that may be met in a range of different schools and colleges. Where a local authority makes a large number of placements at a school or college or at a range of schools and colleges locally, a system of this kind (where the local authority, schools and colleges agree levels of top-up funding in advance) can be a very efficient way of allocating this funding. However, the local authority must be satisfied that the final allocation of funding (both the top-up funding and other elements of funding) is sufficient overall to secure the agreed provision (for example, that specified in an EHC plan), and should keep top-up funding levels under review at regular intervals.

119: A local authority’s banded top-up funding system generally helps to deliver fair and transparent funding in relation to placements in schools and colleges within that local authority. There can be issues, however, when a child or young person is placed in a school or college located in another local authority area since the latter’s top-up funding arrangements are likely to be based on different levels of normally available provision and costs. We therefore encourage neighbouring local authorities to collaborate when reviewing and developing their top-up funding systems, and in making individual top-up funding decisions for children and young people placed in schools and colleges in other authority areas. In all cases, where a local authority makes a placement in a school or college which would not be covered by an existing agreed framework (for example, where a different provider local authority has agreed a separate cost or banded funding framework), the commissioning local authority should consider which funding arrangements are appropriate for the provision being commissioned.

Conditions of dedicated schools grant (DSG) relevant to top-up funding

120: When developing area-wide approaches to using high needs funding, it is important to remember that local authorities’ expenditure from the dedicated schools grant (DSG) is subject to conditions of grant set by the department, which govern the way high needs funding is used, including the way top-up funding is organised. In particular:

• local authorities must treat those placed in maintained provision, academies and free schools, the FE sector, and non-maintained and independent provision on a fair and equivalent basis when making arrangements for funding young people with high needs
• local authorities must make payments of top-up funding to institutions in a timely fashion and on a basis agreed with the institution; and payments must be monthly unless otherwise agreed (such as termly in advance)

121: ESFA will examine cases and consider remedial action where there is clear evidence from a school or college that a local authority is not meeting the required conditions of grant.

Determining top-up funding for individuals

122: As described above, we expect commissioning local authorities and all types of schools and colleges to work constructively together so that agreement can be reached on the level of top-up funding required to enable suitable provision to be made for individual pupils and students. It is always better if principles are agreed in advance. This provides greater clarity about the different types of provision which are to be delivered, the needs of the children and young people who are likely to require them and the associated level of funding (for example, if funding bands are used). As noted above, these arrangements should be developed collaboratively, and clearly communicated so that parents, as well as staff in schools, colleges and the local authority, have a shared understanding.

123: Local authorities allocate top-up funding for the high needs placements they have commissioned, that is, for children and young people who require additional support or a specialist placement because they have complex SEND or require AP. When making such placements, the local authority will be acting under the relevant statutory framework (the Children and Families Act 2014 or the Education Act 1996). As the statutorily responsible body, the local authority is responsible for the final decision about the level of funding required to secure the necessary provision. However, in determining the funding level, the local authority should have consulted with the school or college and should ensure their decision is evidence-based and reasonable.

124: Even where provision is specified in an EHC plan, there is no statutory requirement that a local authority must pay top-up funding at a particular rate requested by a school or college. That is one reason why a clearly understood and consistently applied local framework is particularly important, as a means of avoiding protracted negotiations on funding after individual placements have been commissioned. In addition, the establishment of a local dispute resolution protocol can help to resolve disputes on funding in a timely manner.

125: Many local authorities use panels to provide advice on decisions relating to EHC plans, placements, and high needs funding (for example, when deciding whether to assess, to make a EHC plan, as well as advice in relation to placements, provision and resources). This can be an important way to ensure area-wide approaches (such as funding bands) are applied consistently and fairly in individual cases. Such bodies can only be advisory and decisions on these matters must remain with an officer of the local authority.

126: Disagreements about funding levels and commissioning arrangements for individual children and young people can arise and schools, colleges and local authorities need to work together to resolve these. In the case of children and young people with EHC plans, the EHC plan annual review process can be a particularly useful point for reviewing funding arrangements in the light of evidence about an individual’s needs, their progress, and any changes to the provision they require.

127: The local schools forum can be helpful in setting the wider context. As noted above, local dispute resolution processes might need to be developed and agreed to help those involved work through the issues, and to avoid recourse to legal action. Ultimately local authorities bear the responsibility for decisions on top-up funding, as they are accountable for spending from the high needs block allocation they receive from the department. That responsibility should, however, be discharged fairly, reasonably and after proper consultation, recognising that at every level, different types of school and college are also accountable for their spending.

Confirming top-up funding

128: All high needs placements for children and young people with an EHC plan must be formally commissioned by a local authority. The local authority should, therefore, confirm in writing the amount of top-up funding to be paid as soon as the placement is agreed. Where a local authority makes a number of placements, a single schedule of placements and payments may be sufficient. The details of payment arrangements should be agreed as soon as possible, bearing in mind the condition of the DSG that local authorities must make payments of top-up funding in a timely fashion and on a basis agreed with the institution, and that payments must be monthly unless otherwise agreed.

129: It is important that the local authority makes an assessment at the earliest opportunity, ideally before the pupil or student has been admitted to the school or college, so that a pupil or student’s placement is not disrupted. Where a pupil or student with an EHC plan is due to move between educational phases, the local authority must review, amend, and issue a revised EHC plan in the spring of the preceding academic year and by 31 March, as set out in Important dates. In no circumstances should an admission to, or the continuation of, a placement at a school or college be conditional on, and/or delayed by, receipt or agreement of top-up funding for the pupil or student.

130: Pupils and students should only be counted as having high needs for funding purposes (and be recorded on the school census or individualised learner record (ILR) as a pupil or student with high needs) if the local authority has agreed that top-up funding is payable for that pupil or student. This applies even where a school or college has assessed a pupil or student as requiring additional support, or where a pupil or student has been offered a place by that school or college. In such circumstances, the school or college should use its best endeavours to make the special provision for the pupil or student, seeking advice from the local authority, if necessary, as to what additional support the pupil’s EHC needs, or other assessment may have indicated was appropriate.

131: If a pupil or student’s placement is interrupted temporarily for public health reasons, for example, because an institution has had to partially close, the school or college should make contact with the commissioning local authority to discuss alternative arrangements for their continuing access to education and support, and for the continuation of top-up funding for the provision being made. If an absence is expected to be long-term, because a public or personal health issue affects the young person’s attendance and ability to engage in their education, the local authority should review the EHC plan and amend it if necessary, commissioning different provision as required, for example, an alternative suitable placement.

How top-up funding should be calculated

132: Top-up funding rates for individual placements should take into account both the costs to the school or college of offering overall provision for the pupils and students with high needs and the contribution made from other elements of funding. These include mainstream schools’ notional SEN budget (for the costs of additional support up to £6,000 per annum) and the overall high needs place funding of £6,000 or £10,000 per place in special schools and FE. This is particularly important for specialist providers (such as special schools, SPIs and AP), whose primary purpose is to offer high needs provision. We would encourage approaches to the calculation of top-up funding that both:

• create certainty for schools and colleges on the level of funding they can expect to receive for the provision
• are sufficiently responsive to changes in the number and needs of the pupils and students being placed in the provision, and the unavoidable costs of making that provision

133: When agreeing rates of top-up funding, a local authority and a school or college may wish to reflect economies and diseconomies of scale based on occupancy of places.

134: For example, a special school may have 100 high needs places for which it receives a total budget of £1,000,000 (100 x £10,000). In the event that the school fills 95 places, it may agree with the provider local authority to charge a lower rate of top-up funding. This would reflect the ‘surplus’ funding arising from its five unfilled places already funded by the provider local authority. The nature of pre-16 AP and SEND provision in some schools and colleges results in empty places arising at some points in the year, such as where diagnosis after the beginning of the academic year leads to later identification and placement.

135: Place funding should not be withdrawn for a place perceived as unused and/or adjusted by the local authority in determining the level of top-up funding. Similarly, an additional £6,000, or £10,000 per head should not automatically be charged if a school or college has filled all funded places.

136: Other factors that could impact on the way local authorities calculate the top-up funding for individual pupils and students include:

• the extent to which standardised rates, local banding arrangements and streamlined administration have been established to reduce the need for detailed costs and negotiation of different top-up funding amounts for each pupil or student
• the way schools and colleges set their budgets and break down their costs and overheads
• overheads affecting certain types of independent school and college which are otherwise funded for maintained schools and academies, such as VAT costs in NMSS and the costs of buildings for those schools and colleges not able to access capital funding

137: We do not expect top-up funding to contribute to or subsidise:

• overheads attributable to other budgets within the school or college, or that relate to costs that would have had to have been met even if it had no pupils or students with high needs, for example, the salary of the special educational needs coordinator (SENCO) required by all mainstream schools
• the costs of legal action against local authority decisions on assessment, provision, and top-up funding, including support for parents seeking SEN tribunal Judgments on such local authority decisions
• the cost of educational and other assessments, for example, by educational psychologists, unless the local authority agrees in advance to pay for or contribute to these costs because they are required for its own assessment or review purposes

138: Schools and colleges should be transparent with commissioning local authorities about their cost and willing to explain how the overall school or college finances are working to ensure their continuing financial viability and their ability to sustain appropriate levels of support for children and young people with SEND. Schools and colleges may need to adapt their approach to making special provision, focusing on the needs of the child or young person. For example, a school or college should not assume that an EHC needs assessment and plan will result in the provision of a full-time teaching assistant – this level of help is often not needed by the child or young person and can, at times, be counterproductive to their development. Colleges may need to reorganise their study programmes for young people with SEND and find different ways of supporting them over the week.

Impact of the Public Contracts Regulations

139: The department’s position is that the commissioning by local authorities of SEN and AP placements, funded from the high needs block of the DSG, is not regarded as a public service contract for the purposes of the Public Contracts Regulations 2015.

140: The Public Contracts Regulations (and related Concession Contracts Regulations 2016) are not intended to cover all expenditure of public funding, as made clear by EU law on which they were once based, and which our courts must still take into account. The Public Contracts Regulations apply only to contracts for the acquisition, or acquisition of the benefit, of public works, services or goods made for ‘consideration’ between an ‘economic operator’ and a contracting authority (whether at departmental, arm’s length body (ALB) or local level, such as a local authority, school or college), where such services are deemed to constitute an ‘economic’ activity or purpose. Other forms of public funding, such as funding for services provided through grants or other public subsidies or preferences, to specific enterprises engaged in economic activities, usually fall out of scope of procurement law, but are potentially in scope of subsidy. EU law has established a general principle (which will likely still be recognised by our courts) that publicly funded and supervised education organised within a national education system does not constitute economic activity, even in cases where tuition fees may be required to support placements, so long as the majority of funding is public. Anyone relying on this guidance should, however, seek their own legal advice in each individual case.

141: When a local authority fulfils its statutory duties to make provision specified in an EHC plan or to put in place alternative provision for children of compulsory school age, funded from their high needs budget, it is likely to be delivering public education organised within a national education system. Any disbursement of high needs funding between the local authority and a school or college in fulfilment of such duties will, therefore, not constitute ‘economic activity’, and any agreement between local authority and a school or college will not be regarded as a public service contract for the purposes of the Public Contracts Regulations.

142: We recognise that the wide range of different placement processes and documentation employed by local authorities, some intended to comply with the Public Contracts Regulations, is not always helpful to schools and colleges that attract placements from a number of local authorities. We will consider how best to engage with local authorities, schools and colleges, and their representative organisations to encourage shared arrangements for commissioning and quality management of their local schools and colleges which operate on a regional or national basis and to share existing good practice.

Local authority high needs services and support

143: While the majority of a local authority’s high needs budget is spent on place and top-up funding for schools and colleges, local authorities can also use high needs funding to provide additional or targeted support for children and young people with special educational needs and disabilities (SEND), as permitted under schedule 2 to the Schools and Early Years Finance (England) Regulations 2022. This can take the form of additional funding to schools and colleges, which may be paid on the basis of a service level agreement, or access to specialist services or expertise commissioned by the local authority.

144: Such support can play an important role in enabling mainstream schools and colleges to meet a wider range of special educational needs and supports the presumption in law that children and young people should be educated in mainstream provision, unless their special education needs (SEN) requires more specialist provision.

145: As in previous years, the amount that the local authority plans to spend on such services should be included on the local authority’s s251 budget statement. The actual expenditure should be reported on the same basis in the authority’s s251 outturn statement. The schools forum is expected to discuss the details, including funding and effectiveness of these services.

Additional funding for mainstream schools

146: One of the categories of high needs spending referred to above is targeted funding to mainstream schools. Local authorities can provide additional funding outside the main funding formula for mainstream schools and academies on a consistent and fair basis, especially where the number of their pupils with SEND and/or high needs cannot be reflected adequately in the funding they receive through the local funding formula. They should define the circumstances in which additional funding will be provided from their high needs budget. The criteria and budget should also be included in the authority proforma tool (APT) with the additional factors/commentary section, as well as line 1.2.4 ‘additional high needs targeted funding for mainstream schools and academies’ in the section 251 returns.

147: Additional funding may be provided where there is a disproportionate number of pupils with a particular type of SEND. For example, a primary school may have developed a reputation for meeting the needs of high achieving pupils with autistic spectrum disorder, or pupils with physical disabilities, and it is not possible to target additional funding to the school through factors in the school funding formula.

148: Local authorities should have a formula or other method, based on their experience of distributing additional funding to their schools and academies. This should be agreed with schools and described on the APT. In all cases, the distribution methodology should be simple and transparent, and devised so that additional funds are targeted only to a minority of schools which have particular challenges because of their disproportionate number of pupils with SEND or high needs, or their characteristics. Budget and expenditure should be included within the relevant section 251 statements.

149: Local authorities can also provide additional funding to mainstream colleges for supporting a disproportionate number of students with lower-level SEND, where their annual costs of additional support are less than £6,000 per student.

Specialist support services

150: If mainstream provision is to meet a wide range of additional needs, it is important that the provision enables access to high-quality specialist support, for example, to help children and young people with autism, speech and language needs, social, emotional and mental health needs, sensory impairment, or challenging behaviour. This typically involves specialist teachers with expertise in supporting pupils with complex needs who are available to advise, train and support other teachers and SEN co-ordinators in mainstream schools and colleges. For example, support could be provided through networking and targeted training or commissioned from a specialist provider.

151: It is important that such support is available to mainstream schools (maintained schools as well as academies and free schools), further education (FE) colleges, sixth form colleges and 16 to 19 academies. They are all statutorily required to identify the SEND of their children and young people and to use their best endeavours to make sure that a child or young person who has SEND gets the support they need.

152: Local authorities and mainstream schools and colleges should discuss how such specialist support should be delivered when considering how to spend the high needs funding available to them. Many local authorities employ specialist teachers, funded directly from their high needs budget. Others give special schools additional funding to provide specialist support to other schools and colleges. Such arrangements are frequently accompanied by a service level agreement confirming what will be delivered in return for the additional funding.

153: Specialist support for pupils at risk of suspension or permanent exclusion may be commissioned by the local authority or by schools (using funding devolved by the local authority). Further information on centrally commissioned alternative provision (AP) services can be found in Alternative provision (AP).

154: High needs funding cannot be used for local authorities’ costs in relation to SEND administration, assessment, co-ordination and monitoring, as per schedule 1 of the Schools and Early Years Finance (England) Regulations 2022. These include the identification of children and young people with SEND; the assessment of education, health and care (EHC) needs; and the preparation and review of EHC plans. Annex 3 provides further guidance on the funding of health and social care costs.

Alternative provision (AP)

155: Alternative provision (AP) provides targeted and specialist intervention and support to children at challenging moments in their lives and each placement has the potential to transform a child’s life chances.

156: When children of compulsory school age are not receiving suitable education, the local authority has a duty, under section 19 Education Act 1996, to arrange it.

157: When arranging AP, the commissioner should clearly define the nature of the intervention, its objectives, and the timeline to achieve these, accounting for any statutory special educational needs and disabilities (SEND) responsibilities, especially when an education, health and care (EHC) plan is in place.

158: Occasions where a child may be placed in an alternative setting for a period of time could be as a result of a suspension or permanent exclusion or where a child has health-related needs, that mean they are unable to attend a mainstream school full-time. Many schools make use of AP services, before the need for suspension or permanent exclusion arises. In the majority of cases the intention is for these children to return to their mainstream school and the length of the placement should be determined by the needs of the pupil.

159: When local authorities make arrangements for AP (including hospital education), this is normally funded from their high needs budget. There is flexibility for local authorities to devolve some decision-making and funding for AP to schools, and there is evidence to show that this can be effective in promoting inclusion and accountability. Where a pupil remains on-roll of a mainstream school, the school is effectively acting as a commissioner of AP and retains accountability for the child’s education. For example, where a pupil is suspended from a mainstream school for longer than 5 school days, the school is responsible for commissioning and funding AP from the sixth school day of the suspension.

Organising and funding AP

160: We acknowledge there are different ways local authorities and schools/academies can discharge their responsibilities and expect them to explore the most effective arrangements for AP commissioning and funding in their area. Local authorities should always take account of the needs of local schools in determining the demand for AP and how it is delivered and encourage schools to think collectively about their use of AP, and how the full cost of provision is to be met. Many local areas have developed strong partnership arrangements, which seek to share responsibilities across schools for AP commissioning, funding, and accountability. Such arrangements can include the local authority devolving some decision-making and funding to groups of schools.

161: Funding devolved to schools or partnerships of schools remains as a central budget under the local authority’s central control, and the terms of its use should be covered by a service level agreement or ‘memorandum of understanding’ with the schools and academies involved. As with other elements of high needs funding held centrally, under the conditions of grant associated with the dedicated schools grant (DSG), the local authority must treat maintained schools and academies on an equivalent basis and make sure that any distribution of such funds is fair and reasonable.

162: The local authority should make sure that there is consultation with the schools forum on the way AP funding is used and distributed. The schools forum regulations are intended to ensure that the arrangements for AP funding are properly discussed at local level – with engagement not only from the local authority, but also from the mainstream schools and academies, PRUs and AP academies and free schools. This is explained in the schools forums operational and good practice guide.

163: The regulations and scheme for financing schools do not permit local authorities to make a differential charge on schools’ and academies’ budget shares according to their use or intended use of AP. It is possible, however, to use funds relating to pupils leaving the school roll, which have been deducted from schools’ budget shares under regulation 27 of the Schools and Early Years Finance (England) Regulations 2022, or under the similar arrangements with academies to offset some of the cost of places. This is explained further in Permanent exclusions: funding adjustments.

How high needs funding is allocated to AP

164: AP can receive high needs funding in different ways through:

• core funding: the annual allocation of funding on the basis of an amount per place (place funding), which a school receives either directly from the provider local authority (for PRUs, based on the financial year), or from ESFA (for AP academies and AP free schools, based on the academic year)
• top-up funding: the funding required, over and above the core or place funding, to enable a pupil to participate in education is paid by the local authority or school that commissions each place
• locally negotiated funding for AP services, such as outreach, which are outside the place funding and top-up funding model
• funding for independent AP is also locally negotiated between commissioner and provider as it is outside the place funding and top-up funding system

165: It should be noted that post-16 students in pupil referral units (PRUs), AP academies and AP free schools are not funded in the same way as pre-16 students. A school will not receive AP place funding for post-16 students because this type of provision is, by definition, a school set up to educate children of compulsory school age. In the event that an AP school does have post-16 high needs students with SEND, usually with an EHC plan, these places can be funded on the same basis as post-16 students in mainstream schools.

166: Where the local authority commissions a place at a PRU, AP academy or AP free school, the top-up funding is allocated from the local authority’s high needs budget. Where a school commissions a place at a PRU, AP academy or AP free school, the top-up funding may come from centrally held high needs funding that has been devolved to that school or a local partnership of schools (for example, via a service level agreement), or from the school’s delegated budget share or (if an academy) general annual grant.

167: It is in the interests of the local authority and its schools offering AP to agree the referral process and process for resolving concerns about admissions. If the local authority is unable to place a particular pupil because they are not suited to the type of provision offered by a PRU, AP academy or AP free school, they would need to make other arrangements.

How to determine place numbers at AP

168: Each PRU, AP academy or AP free school usually has a number of places to offer pupils excluded by schools or who cannot get a school place for other reasons. In this case the commissioner would normally be the local authority. Many AP schools will also have places for pupils who are on part-time or shorter-term placements. In many cases local schools would be the commissioner for these places.

169: We have not defined a ‘place’ in the regulations, but we expect that a place will generally be available for occupation by a full-time equivalent (FTE) pupil. We accept that in AP, places may not be filled by the same individual throughout the year. Identification of places is not determined by pupils’ registration status. Where pupils are dual registered with a mainstream school, the time they spend attending a PRU, AP academy or AP free school should be accounted for in the number of places identified.

170: It is important that AP schools are not overfunded where places are not required, but there will be occasions when places remain unoccupied, for example, to accommodate unpredictable fluctuations in demand. There will also be places that are occupied by more than one individual attending on a part-time basis (for example, a place may be filled by a child who attends for 2 days a week from one school, and another child who attend for 2 days from another school, with no child present for one day a week).

171: It may not be appropriate to provide place funding for some AP services where children are receiving their education offsite, such as a home tuition service or an outreach service provided by teachers whose base is the PRU or AP academy/free school. These services should be funded through a service level agreement with the commissioning local authority or school.

172: As in previous years, pre-16 AP places will be funded at £10,000 per place in 2022 to 2023, regardless of whether the place will be commissioned directly by a school or by a local authority.

173: The local authority and the schools should agree the number of AP places to be funded in PRUs and AP academies, in consultation with those schools in the area which may need to commission places. This may require consultation with other local authorities and their schools if they are likely to commission places in the PRU or AP academy. As explained previously, post-16 students in AP settings are not funded in the same way as pre-16 students, but on the same basis as post-16 students in mainstream schools.

174: Local authorities have flexibility to change the number of places they fund in 2022 to 2023 at PRUs and should only notify ESFA of changes to the place numbers in AP academies, using the 2022 to 2023 place change notification process. ESFA will contact AP free schools directly (November 2021) detailing how their 2022 to 2023 high needs place numbers will be determined. Evidence to support changes in place numbers may be required, and we recommend that PRUs, AP academies and AP free schools engage early with local authorities and schools commissioning places.

175: As with special academies, 2022 to 2023 places funded at AP academies are deducted from the DSG of the local authority in whose area the academy is located.

176: For AP free schools, deductions for the 2022 to 2023 academic year are made from the DSG of the local authority where the pupil lives, based on October 2021 school census data. These deductions will be notified to local authorities in April 2022. No deduction is made for places in AP free schools opening during the 2021 to 2022 or 2022 to 2023 academic years. However, a deduction is made from the DSG for places in AP free schools open before or during the 2020 to 2021 academic year.

177: AP academies and AP free schools should receive notification of their 2022 to 2023 allocations of place funding from ESFA by the end of March 2022; and PRUs from their local authority by end of February 2022.

178: Place funding provides some certainty for schools, but a stable income and financial viability will continue to depend on:

• developing strong relationships with local authorities and schools that commission places
• working out with commissioners, top-up funding rates that reflect the costs, including (for example) the costs of under-occupancy when places are not filled. See Agreeing top-up funding for alternative provision
• where appropriate, developing commissioned services that can provide an income from local authorities and schools on a longer-term basis (for example, through a two or three-year contract)

Agreeing top-up funding for alternative provision

179: Top-up funding for AP is not usually related to an assessment of SEN. A standard top-up funding rate is often set for each PRU, AP academy or AP free school, which reflects the overall budget needed to deliver the provision for pupils and students attending. The principles of local authorities working constructively with schools and AP providers to co-produce transparent local arrangements for the provision offered and the expected cost rates (as set out in the Organising top-up funding at local authority level section above) are as important for AP as for any other form of high needs provision.

180: Cost transparency is an important feature of the high needs funding arrangements. Local authorities and schools should be aware of the full cost of AP in different schools and placement decisions made on the basis of the cost and quality of what is on offer. It is, therefore, important that the schools forum discussions about how AP is funded should include information about top-up funding rates for schools; and the organisation where the top-up funding and place funding for AP is sourced.

181: There is often a very fluid movement of pupils and students in and out of AP during the course of a year. The extent of this movement can create uncertainty and volatility in an AP school’s budget planning. Local authorities should recognise such fluctuations and trends to inform a more transparent and simplistic mechanism for administering the distribution of top-up funding.

182: One such example is where the AP school agrees an estimate of the uptake of places at the beginning of the year with its main commissioning local authorities and schools. Top-up funding could then be paid on account every month throughout the year; and a termly or year-end reconciliation could take place to reflect an actual uptake of places by individual pupils during the period (the difference between estimated and actual uptake). This would give the AP school more certainty over its in-year cash flow, enabling it to employ the staff needed (recognising that an increase or decrease in pupils may not necessarily directly equate to shifting staff to pupil ratios) to provide a high quality service throughout the year, and to adjust the quality and nature of provision over time to meet local authorities’ and schools’ demand.

183: It is important that top-up funding relates to pupils actually occupying places. The aim of the system of place funding and top-up funding is to give a proper balance between sustainable income for the AP school, and flexibility to commission AP that meets the needs of individual pupils. Funding based solely on places, which may or may not be occupied, risks spending scarce resources on places that are needed neither by local authorities nor by schools and academies. It also ties up funding that would otherwise allow decisions to be taken about the most appropriate AP for an individual pupil.

184: We are not prescriptive about how the calculation of top-up funding reflects the period that a child or young person occupies a place. Some AP schools operate on the basis of a daily rate but, in many cases, it would be more beneficial to calculate the top-up funding using longer periods, for example weekly, monthly, or even termly rates.

185: Commissioning local authorities and schools will want to carefully consider the top-up funding arrangements to make sure that there are no perverse incentives; and that the funding achieves the intended outcomes.

186: It would also be possible to develop a top-up funding system that more closely reflects the achievement of desired outcomes, as a way of encouraging high quality AP.

187: The AP school could receive an enhanced rate of top-up funding after the end of the placement if the intended outcome for the pupil or student had been achieved.

188: For example, a mainstream school could be seeking a particular intervention for a year 11 student, which would enable him or her to successfully complete their GCSE exams; it could agree a short-term placement for the student at a local PRU and an additional amount of top-up funding that would be paid after the student’s exam results are known, and if the expected grades had been achieved. Similarly, a local authority may wish to agree that an additional amount of top-up funding is payable if a year 11 pupil is in education, training, or employment in the year after leaving AP.

189: Such arrangements are not mandatory, but could be used to secure better outcomes and improve the quality of AP.

Commissioned AP services

190: In many cases the services offered by a PRU, or AP academy or free school will not be appropriately funded through the combination of place and top-up funding. Teachers at the AP setting may be involved in outreach work with local schools and academies or may be employed by them on a consultancy basis, to advise on behaviour management. The local authority may use a PRU’s staff to provide home tuition to children with medical needs or to provide a service to pregnant teenagers or young mothers who cannot easily attend school. These are examples of services that would normally be funded by the commissioning local authority or school, or group of schools, under a service level agreement that specifies what is required and the funding to be paid.

191: Where the local authority commissions the service, the funding would come from its high needs budget.

192: Where a school or group of schools commissions the service, the funding would come either from those schools’ delegated budget share, or from centrally held high needs funding that has been devolved to schools. Any distribution of devolved AP funding should be fair and treat maintained schools and academies in the same way.

193: As with other centrally held AP budgets, the local authority should make sure that there is consultation with the schools forum on the amount retained and how it is used and distributed. For certain centrally held budgets, including for services relating to the education of children with behavioural difficulties; and other activities for the purpose of avoiding the permanent exclusion of pupils from schools, the regulations require schools forum agreement to the amount retained.

Permanent exclusions: funding adjustments

194: The previous AP sections highlight the importance of ensuring schools and local authorities explore the most effective arrangements for AP commissioning and funding in their area, including for children who have been permanently excluded.

195: Where pupils are excluded, under the Schools and Early Years Finance (England) Regulations 2022, funding should flow in-year from the school that has permanently excluded the pupil to the provision that takes responsibility for the pupil.

196: If a school subsequently admits a pupil who has been permanently excluded during that financial year, it should then receive additional funding.

197: The provisions also apply to pupils who leave a mainstream school for reasons other than permanent exclusions and are receiving education funded by the local authority, other than at a school.

198: The provisions also act independently of whether a particular pupil has been on the school census in the first place, and whether the school has, therefore, received funding for them.

199: Local authorities are responsible for adjusting the budget shares of mainstream maintained schools if a pupil is permanently excluded, so that funding follows the pupil. Further information on this, including calculating the amount to be deducted from the excluding school’s budget and admitting school’s budget (if appropriate), is available in the ‘Redetermination of budgets where pupils have been excluded’ section of the schools revenue funding operational guide 2022 to 2023.

200: Different funding arrangements apply in relation to pupils permanently excluded from PRUs, AP academies, maintained special schools, special academies and children in designated special units or resourced places at mainstream schools. These schools receive base funding for each place, which is not linked to individual pupils and so is not withdrawn following a permanent exclusion. Similarly, the calculation for an admitting school would not be used for a PRU, AP academy or AP free school. They also receive top-up funding that is linked to individual pupils. When commissioning places at one of these types of school, local authorities and schools should formally agree with the providing school what proportion of this top-up funding will be returned if a pupil leaves the school (for any reason). See paragraphs above for further information on how top-up funding works for PRUs, AP academies and AP free schools.

201: The only exception to this is where pupil premium is payable in respect of a pupil attending a PRU or special school maintained by the local authority. In this situation, local authorities must adjust the school’s budget in accordance with the same formula that applies to mainstream schools. In the case of AP and special academies, local authorities should claim from the academy an amount equivalent to the pupil premium (as calculated according to the formula in the regulations) or pay the academy the relevant amount when a previously permanently excluded pupil joins the academy.

202: Information about regulations covering the movement of funds in relation to permanently excluded pupils who are placed in provision in other local authorities can be found under the section ‘inter-authority funding transfers’ in the schools revenue funding operational guide 2022 to 2023. The regulations relate to situations where a pupil is permanently excluded from a maintained school in one local authority, and is either:

• subsequently provided with education in the same financial year at a maintained school, or otherwise than at school in a second local authority
• subsequently provided with education in the same financial year at a PRU, or otherwise than at school in a second local authority, and then at a maintained school or otherwise than at school in a third local authority

Funding by type of education provider

Early years providers

203: Children aged 0 to 5 with more complex needs and those in receipt of an education, health and care (EHC) plan are eligible to receive funding via the high needs block of the dedicated schools grant (DSG).

204: Local authorities can meet the costs of under 5s with high needs in different ways from their high needs budget. These may include special educational needs and disabilities (SEND) support provided directly as a central service for young children with high needs and early years providers. Place funding may also be used for early years provision, for example, at special schools, supplemented by top-up funding for individual children.

205: Additionally, local authorities are required to pass funding on to all early years providers delivering the free entitlements for eligible children aged between 2 and 4 through the early years block of the DSG. The early years entitlements: local authority funding of providers operational guide includes more information on how early years block funding is allocated and should be passed on to providers.

206: As set out in the early years operational guidance, there are additional early years funding streams to support children aged 3 and 4 with SEND to access their free entitlements.

207: The settings of 3 and 4-year-olds eligible for the disability access fund (DAF) (those in receipt of child disability living allowance and receiving free early education) will be entitled to receive a one-off payment of £615 per year.

208: All local authorities are required to establish an inclusion fund in their local funding systems for 3 and 4-year-olds with special educational needs (SEN) taking up the free entitlement, regardless of the number of hours taken. This fund supports local authorities to work with providers to address the needs of individual children with low level or emerging SEND. The structure also supports local authorities to undertake their responsibilities to strategically commission SEN services as required under the Children and Families Act 2014. Local authorities can establish their SEN inclusion funds using funding from either one or both of their early years block and high needs block of the DSG.

Mainstream schools, academies and free schools

209: Mainstream schools without SEN units or resourced provision are funded for pre-16 pupils with SEND as follows:

• core funding: included within the funding through the local schools funding formula
• top-up funding: agreed per pupil top-up paid by commissioning local authority

210: Maintained mainstream schools will receive notification of their core funding allocations of pre-16 funding for the financial year beginning in April, by the end of the prior February; and mainstream academies and free schools, by the end of March before the subsequent funding (academic) year starting in September. The core funding for mainstream schools includes funding for pupils with SEND, whose additional support costs are lower than £6,000. Schools and academies should have sufficient funding in their delegated budget to enable them to support pupils’ SEND where required up to the mandatory cost threshold of £6,000 per pupil per annum.

211: For pupils aged 5 to 15 years in mainstream schools, a notional SEN amount will be shown in the school’s budget; this is an indicative amount that schools may set aside for pupils with SEND. Where there is a disproportionate number of pupils with SEND, additional funding may be provided outside the main funding formula, as explained in Additional funding for mainstream schools.

212: High needs place funding is only available to those schools with SEN units or resource provision.

213: Where individual pupils require additional support that costs more than £6,000, the excess should be met by top-up funding associated with the individual pupil. Top-up funding rates are for local authorities to determine, in consultation with schools. Further information is provided in Top-up funding.

Sixth forms

214: Mainstream sixth forms are funded for their core funding on the basis of an amount per student based on the post-16 national funding formula (sometimes referred to as element 1), and £6,000 per high needs place (element 2). Funding for pupils whose additional support costs are lower than £6,000 is provided within the disadvantage funding element of the post-16 national funding formula. Local authorities should assume for element 1 a national average amount of £5,200 for the 2021 to 2022 academic year and £5,600 for the 2022 to 2023 academic year. These amounts comprise the base rate, which is increasing from £4,188 to £4,542, and additional funding allocated through the post-16 funding formula (such as for disadvantage).

215: High needs place funding (element 2) is available to schools for students with SEND requiring additional costs exceeding £6,000. Schools should have engaged with their local authority to agree place numbers. Local authorities have flexibility to agree alternative ways of calculating this element of high needs funding with schools, academies and free schools. Further information can be found in High needs place funding: local flexibility to allocate differently.

216: ESFA does not require information on changes to places funded in maintained schools as local authorities fund these institutions directly and have local flexibility to change the number of places as well as the method of calculating the allocation. Local authorities should, however, notify ESFA of changes to place numbers for academies and free schools, to ensure that they are funded on the correct basis.

217: As explained for pre-16 pupils, where individual pupils require additional support that costs more than £6,000, the excess should be met by top-up funding associated with the individual pupil.

Special units and resourced provision

218: Special, or SEN, units are special provision within a mainstream school where the children are taught mainly within separate classes. Resourced provision is where places are reserved at a mainstream school for pupils with a specific type of SEN, taught mainly within mainstream classes, but requiring a base and some specialist facilities around the school.

219: Mainstream schools are funded for SEN units and resourced provision through:

• pre-16 core funding: a combination of per-pupil funding through the local schools funding formula, plus £6,000 per place for those occupied by pupils on roll; and £10,000 per place for the remainder of places to be funded
• pre-16 top-up funding: agreed per pupil top-up paid by commissioning local authority
• post-16 core funding: element 1 (based on the 16 to 19 national funding formula (NFF)) plus element 2 (£6,000 per place) based on the number of places to be funded
• post-16 top-up funding for students with high needs: element 3 agreed per pupil top-up paid by the commissioning local authority

220: Mainstream schools may be funded for pre-16 high needs places if they have special units and/or resourced provision. Depending on the range and type of services on offer, it is also possible for such provision to be a centrally funded service commissioned by the local authority, normally under a service level agreement with the school or academy. Where there are changes to specialist provision, such as new special unit or resourced provision, at academies and free schools, this must first be approved through the significant change process. A signed deed of variation must be received from the trust so place funding can be reflected in the 2022 to 2023 academic year allocation from ESFA. There are some circumstances where local authorities have made different arrangements for funding high needs places at special units or resourced provision. This would be a local arrangement agreed with the school and funded direct by the local authority rather than via ESFA. More information will be included in the 2022 to 2023 place change technical note.

221: Pre-16 places at a special unit and resourced provision that are occupied by pupils recorded on the school census, as sole or dual (main) at a special unit or resourced provision are funded at £6,000 per place. Pupils in these places will also attract funding through the mainstream school formula.

222: Other places are funded at £10,000. This may apply where:

• the place is or will be occupied by a pupil registered on the roll of another school
• a place is not occupied at the time of the school census count, but is likely to be filled, and requires funding
• spare capacity is required for another reason

223: ESFA confirms the number of funded high needs places in mainstream academies and free schools following the annual place change notification process.

224: In the case of maintained schools, the provider local authority that maintains the school determines the total number of places to be funded, taking full account of places that may be commissioned by other local authorities.

225: For SEN special units and resourced provision, information collected via the authority proforma tool (APT) is used to determine the place funding rate.

226: For mainstream academies and free schools, ESFA determines the rate of place funding amount based on occupancy data provided in the APT, with the number of places confirmed as part of the place change notification process. The total number of places funded is based on the outcomes from the place change notification process, of these:

• the number of places funded at £6,000 per place is calculated based on the number of places occupied by pupils on the roll of the school or academy, as recorded in the APT, but would not exceed the total number of places to be funded. For example, if funding for 10 places was agreed through the place change process, and 12 places recorded as occupied in the APT, a total of 10 places would be funded at £6,000 per place. This is because we use the place change process to determine the place numbers, not the APT
• the number of unoccupied places, (funded at £10,000 per place), is calculated as the total number of places to be funded (via the place change), minus the number of occupied places recorded in the APT, this funding will not be below zero. So, in the example above, there are no unoccupied places as the total occupied places is the same as the number notified as part of the place change process

Maintained special schools, special academies and special free schools

227: Pre-16 and post-16 high needs places at maintained special schools, special academies and special free schools are funded at £10,000 per place. In addition, they receive per pupil top-up funding paid by the commissioning local authority.

228: Following publication of the place change notification outcomes there is a 2-week enquiry window for local authorities and schools to raise significant issues regarding the number of places to be funded. Schools receive allocations of place funding from ESFA by the end of March, in advance of the academic year; maintained special schools are notified of their place funding allocations (that is, their budget shares) by their local authority, by the end of February.

229: A special schools protection, otherwise known as minimum funding guarantee (MFG), will continue to apply to maintained special schools and special academies (including special free schools) in 2022 to 2023. The MFG for mainstream schools (at least +0.5% per pupil) covers their core budget but does not cover the high needs top-up funding they receive. That element is not protected, because it can change significantly when a single pupil with high needs leaves the school. However, for special schools the top-up funding they receive is a much higher proportion of their overall funding, and so it is covered by the equivalent of the MFG for special schools. Because it protects more of their total budget, we are continuing to set the level of that broader protection slightly lower – at 0% per pupil in 2022 to 2023.

230: This means that no special school will receive from their local authority less per pupil next year on a like-for-like comparison with their pupil cohort this year. The calculation is based on the assumption that the number and type of places remains the same between 2021 to 2022 and 2022 to 2023. It also assumes that all pupils in the school are placed by the provider local authority (usually, where the school is located) and that all top-up funding rates received by the school are those set by that local authority.

231: See Annex 1 for further information on the MFG protection, including a worked example.

Non-maintained special schools (NMSS)

232: All places in NMSS (pre and post-16) are funded at £10,000 per year. In addition, they receive per pupil top-up funding paid by the commissioning local authority.

233: ESFA bases NMSS place funding allocations on the pupil number data from the latest October school census, uplifted by the difference between the previous year’s October and January census pupil number data. If there is a reduction in the number of pupils between the October and January census, ESFA will not reduce funding, to ensure that no school is funded on numbers less than those recorded in their latest October census. If a school has a significant number of pupils, above their allocated place numbers, and they have concerns about how that will be funded through the lagged funding approach, they should contact ESFA.

Independent schools

234: Independent schools, including independent special schools and independent AP, sit outside the high needs place funding system. Where a local authority has commissioned a place in an independent school, the local authority is responsible for all the funding for that child or young person with SEND (that is, the local authority must provide the equivalent of both place and top-up funding from their high needs budget). The total expenditure on these placements should be included in the relevant high needs top-up funding line of each local authority’s section 251 returns.

235: More information about how local authorities should discharge their responsibilities for children and young people with SEND in independent schools is set out in the SEND Code of Practice, in particular paragraphs 9.131 to 9.136.

236: Where a local authority is considering placing a child or young person with an EHC plan on a full-time basis in provision they should ensure the setting is properly registered with the Department for Education before any placement is made. Further information on the process can be found at independent school registration.

237: It is an offence to conduct an unregistered independent school, and anyone who does so is liable on summary conviction to a fine and/or imprisonment. Local authorities making use of unregistered provision for the purpose of providing full-time education to children may prejudice future prosecutions of unlawfully operating settings.

Pupil referral units (PRUs), AP academies and AP free schools

238: Pupil referral units (PRUs), alternative provision (AP) academies and AP free schools are funded as follows:

• pre-16 core funding: £10,000 per place based on the number of places to be funded
• pre-16 top-up funding: agreed per pupil top-up paid by the commissioning school or local authority
• post-16 core funding: element 1 (based on 16 to 19 NFF) plus element 2 (£6,000 per SEND place)
• post-16 top-up funding: agreed per student top-up paid by the commissioning local authority

239: We encourage schools and local authorities to explore the most effective arrangements for AP commissioning and funding in their area. For instance, there is flexibility for local authorities to devolve some decision-making and funding for AP to schools: there is evidence to show that this can be effective in supporting mainstream schools’ work with their most challenging pupils. Local authorities should provide information locally and consult with the schools forum about such arrangements.

240: PRUs, AP academies and AP free schools will not receive AP place funding for post-16 students because these institutions are, by definition, schools set up to educate children of compulsory school age. In the event that an AP institution does have post-16 high needs students with SEND, usually with an EHC plan, these places are funded on the same basis as post-16 students in mainstream schools.

241: Further information is available in Alternative provision (AP).

General further education (FE) colleges, sixth form colleges, independent learner providers (ILPs) and 16 to 19 academies

242: General further education (FE) colleges, sixth form colleges, independent learning providers (ILPs) and 16 to 19 maintained schools and academies receive core funding on the basis of an amount per student calculated using the post-16 NFF (element 1) and, for their students with high needs, £6,000 per high needs place (element 2). Top-up funding for students with high needs (element 3) is paid directly by the local authority commissioning the place.

243: Element 1 funding, based on student numbers, is allocated directly by ESFA to colleges (or via the provider local authority for 16 to 19 maintained schools) for students aged 16 to 19 and those aged 19 to 25 with EHC plans. The number of students and amount of funding paid has no impact on local authorities’ high needs budgets. Funding is provided through the disadvantage factors of the mainstream 16 to 19 funding allocation for students with SEND, but whose additional support costs are lower than £6,000 and who therefore do not count as students with high needs.

244: For 2022 to 2023, local authorities should assume for element 1 a national average amount of £5,200 for the 2021 to 2022 academic year and £5,600 for the 2022 to 2023 academic year. These amounts comprise the base rate, which is increasing from £4,188 to £4,542, and additional funding allocated through the post-16 funding formula (such as for disadvantage).

245: The number of high needs places (element 2) that determines the high needs funding of £6,000 per place is based on the number of places funded for the 2021 to 2022 academic year, subject to any changes to those numbers as a result of the place change notification process. As indicated above, it is essential that FE colleges discuss with their provider local authority (that is, the one in which the main college or provider headquarters is located) how many places should be funded, as set out in the High needs place funding section above. Further information about how place funding works, including where students exceed place numbers, can be found in the High needs place funding section. Further information on high needs top-up funding (element 3) is set out in Top-up funding.

246: It is also open to FE colleges to agree with their provider local authority an alternative method of calculating this element of funding (that is, a calculation that is not necessarily a number of high needs places times £6,000), subject to the requirements outlined in high needs place funding: local flexibility to allocate differently.

247: There are a number of situations where a 14 to 16-year-old may be studying in a college:

• students who achieved a level 2 qualification early and are choosing to enrol on a full level 3 course, and home-educated students are counted as 16 to 19-year-olds; such students are funded alongside 16 to 19-year-olds via the 16 to 19 funding formula for element 1 and £6,000 per place for element 2
• students enrolled in a school or academy but studying part-time in college are not funded as 16 to 19-year-olds, as the school or academy will receive funding in respect of these students via the pre-16 process applicable to that school
• some colleges are eligible to be directly funded by ESFA for 14 to 16-year-olds:
• these students should be recorded in the individualised learner record (ILR) accordingly and will be funded for element 1 via the 16 to 19 formula using a separate process
• for element 2 these students are counted as 16 to 19-year-olds and funded at £6,000 per place using the same process as for 16 to 19-year-olds
• further details for FE colleges on funding for directly recruited 14 to 16-year-olds in colleges can be found in the enrolment of 14 to 16-year-olds in FE guidance

Special post-16 institutions (SPIs)

248: All SPIs in their second year onwards of direct ESFA funding are allocated place funding (element 1 and element 2) on the basis of their latest R06 ILR return. In addition, they receive top-up funding paid by the commissioning local authority. Further information can be found in High needs place funding and Top-up funding. If an SPI has a significant number of students over and above their allocated place numbers and they have concerns about how that will be funded through the lagged funding approach, there is an automated process for recognising such in-year growth, which is operated by ESFA early in the calendar year. ESFA has published guidance on the in-year growth criteria for the 2022 to 2023 academic year.

249: To be eligible to receive high needs place funding from ESFA for the first time, SPIs must successfully complete the high needs funding: due diligence process for special post-16 providers. Such SPIs must have been proposed to ESFA through the annual place change notification process. Their allocations are determined by the numbers returned by the local authority in which they are located, through the place change notification process.

Hospital education

250: Hospital education is defined as education provided at a community special school or foundation special school established in a hospital, or under any arrangements made by the local authority, under section 19 Education Act 1996 (exceptional provision of education), where the child is being provided with such education, by reason of a decision made by a medical practitioner.

251: Although we allocate funding to local authorities for hospital education without reference to the age of the young people receiving the education, local authorities’ duties differ for young people aged 16 and over. This may affect their decisions on funding education for young people in this age group, such as those in independent hospital schools.

252: Our long-term intention is to introduce a formulaic hospital education factor in the high needs national funding formula that takes into account both local authorities’ spending data and NHS data, thereby better responding to the number of patients needing education. Our work to progress this has been delayed because of the impact of the COVID-19 pandemic on the NHS, hospitals and hospital schools.

253: In the meantime, as in previous years, hospital education should continue to be funded by local authorities based on either an amount per place, or as a centrally funded local authority service. An example of the latter is where the local authority employs teachers directly to work in a hospital or offer home tuition to pupils who are confined to their home, because a medical practitioner has decided that is where they should be, to receive their education. Some local authorities commission such services through hospital schools or PRUs. In all cases, local authorities should ensure that there is clarity on how hospital education is provided and funded locally. Local authorities should report their planned and actual expenditure on such provision in maintained schools, or provision funded as a central service, in the relevant tables of the s251 budget and outturn statements.

254: Funded hospital education places can be found in maintained special schools (usually a particular type of special school known as a hospital school), maintained PRUs (sometimes known as medical PRUs), special and AP academies and free schools. Often these schools will have a combination of hospital education places and other high needs (AP and SEND) places.

255: The Schools and Early Years Finance (England) Regulations 2021 require that hospital education places in maintained schools and PRUs are funded at least at the same level per place as in the previous funding year. This requirement is also reflected in the funding arrangements for hospital education places in academies. DSG: conditions of grant require local authorities to treat academies the same as maintained schools in their funding arrangements. These requirements will remain in place and be incorporated in the regulations and conditions of grant for 2022 to 2023.

256: Local authorities are reminded that the high needs NFF provides them with an 8% increase in hospital education funding, compared with the 2021 to 2022 allocations of hospital education funding. Local authorities should consider carefully, following consultation with their maintained hospital schools, academies and other providers of hospital education, how much of this increase is passed on to them, taking into account any increase in their costs. If a local authority intends to pass on an increase to an academy funded for hospital education places, this must be notified to ESFA via the 2022 to 2023 place change notification process.

257: The hospital education funding guidance explains the process for those local authorities wishing to apply for additional funding due to new hospital education provision. We are aware that many hospital schools will have had to change their delivery of educational provision during 2020 and 2021, as a result of COVID-19, and that some of these changes may ultimately be more permanent. Local authorities should engage with their maintained hospital schools and academies, other hospital education providers, and the relevant NHS hospital trusts, to plan ahead for 2022 to 2023, including discussion of the funding implications of temporary or permanent changes in provision.

258: Medium secure adolescent psychiatric forensic units, which cater mainly for young people aged 16 and over, are funded in 2022 to 2023 using the same hospital education funding methodology of an amount per place no less than their funding per place in 2021 to 2022. Such education provision exists in a very small number of units, most of which are in maintained schools and academies where the funding is allocated, either from the local authority or ESFA respectively.

259: Local authorities’ duties may require them to commission hospital education from other independent providers, usually registered as independent schools and not in receipt of funding directly from ESFA.

260: In these circumstances, local authorities would be expected to pay the costs of this education from their high needs’ budgets. In discharging their duties, the law does not necessarily require local authorities to commission a particular education provider, although decisions about education provision should not unnecessarily disrupt a child or young person’s education or treatment.

261: Independent hospital education provision may be funded either as a single service by the local authority in whose area the provision is located, or on the basis of payments for individuals from those authorities where the child or young person normally resides. In both cases, the provider should confirm with the relevant local authority that they are content to commission and fund the education provision.

262: If funding is provided as payments for individual children and young people, the provider should receive such confirmation from the local authority in writing (if possible), before delivering the education provision to the child or young person, and certainly before requesting any funding.

High needs funding: post-16 special circumstances

High needs place funding: local flexibility to allocate differently

263: Mainstream academy and free school sixth forms, including alternative provision (AP) academy sixth forms, and all general further education (FE) colleges, sixth form colleges, independent learning providers (ILPs), and 16 to 19 maintained schools and academies are funded at £6,000 per high needs place (sometimes referred to as element 2). This funding is deducted from the local authority’s dedicated schools grant (DSG) and paid to the schools and colleges via ESFA, based on the published data on place numbers from the annual place change notification process. For maintained schools and pupil referral units (PRUs), this funding remains in local authorities’ DSG high needs allocations to fund schools direct and local authorities have flexibility to make changes to the place numbers.

264: There remains the flexibility introduced previously, whereby a local authority can reach agreement with any of the types of school or college referred to above, that this element of the institution’s funding can be calculated and paid in a different way directly by the local authority, subject to the following requirements:

• there should be agreement on the alternative funding approach between the local authority and the school or college involved, and this agreement should be reached by autumn 2021
• the alternative arrangement must ensure a continuation of the £6,000 cost threshold for top-up funding, and reflect high needs students attending from other local authorities to maintain consistency in the high needs funding system
• in other words, the funding methodology should continue to provide schools and colleges with funds to meet the additional costs of supporting students with special educational needs up to £6,000 per annum, with top-up funding meeting the costs in excess of that threshold
• local authorities should be aware that the import/export adjustment will continue to operate as explained above whatever alternative methodology is used

265: The schools and colleges involved must, therefore, continue to provide information about students with high needs through the school census and individualised learner record (ILR) according to the current definition, which means that such students must have been assessed by the local authority as having high needs, and the institution must be receiving top-up funding for their support costs in excess of £6,000. This school census and ILR information provides the data that allows the import/export adjustment to operate fairly for local authorities.

266: The local authority can make such alternative funding arrangements by agreement with its maintained secondary and 16 to 19 schools and PRUs without any formal notification to ESFA.

267: Where an alternative funding methodology is agreed with an academy or college, the local authority should notify ESFA through the place change notification process that the place number is to be reduced. The place number would be zero if the local authority has agreed with the academy or college that the alternative methodology covers the equivalent of all their place funding, including those places filled by students placed by other authorities.

268: In all cases, the deduction from the local authority’s high needs allocation would reflect the reduced place number, because the local authority has agreed the change with the academy or college involved and will pay the funding to the academy or college concerned directly.

269: It is important for local authorities to note that no changes will be made to the import/export adjustment in the national funding formula (NFF), because the provider local authority (the local authority area where the school or college is based), will still be expected to meet the costs of all the places in the school or college. This includes those places to be occupied by students for whom other commissioning local authorities are paying the top-up funding.

270: This flexibility encourages local authorities and their schools and colleges to collaborate in making special provision for their students. Examples of alternative approaches could be:

• an agreement to fund a college directly a lump sum per year over three years, to provide certainty to the local authority and college on the level of provision; and funding that will be made subject to specified tolerances relating to the actual number of students with high needs receiving support
• an agreement that a school sixth form will be funded for its students with special educational needs and disabilities (SEND) on the basis of similar proxy measures, as are in the local pre-16 funding formula

271: We may collect further information from local authorities about any alternative funding calculations they make.

Post-16 study programmes

272: The majority of young people with high needs attending a school, college or SPI will be subject to an education, health and care (EHC) plan. Local authorities must use the evidence from the EHC plan to make consistent, effective and robust assessments of the support the young person will need to move towards a positive outcome.

273: Local authorities and the schools and colleges offering places for students with high needs should collaborate to agree a suitable study programme for a young person, which must be tailored to their individual aspirations and support needs.

274: A full-time study programme has a minimum duration of 540 hours and there is no set maximum. Neither local authorities nor schools and colleges should set an arbitrary maximum number of hours for a study programme, but instead students should be provided with the number of hours they require to complete the programme. A funding requirement for all programmes is that they meet the condition of funding for maths and English.

275: A supported internship is a full-time study programme for young people aged 16 to 25 who have an EHC plan, and for whom a move into employment is the next step, but who need extra support to do so. The costs of additional support associated with providing an effective supported internship placement can include indirect costs (for example, engagement with an employer to ensure the suitability of a placement for the young person, or with their family to ensure they are supportive).

276: Access to work funding from the Department for Work and Pensions or other funding sources may contribute to some supported internship costs, subject to any limits imposed on what these funds can be used for. Access to Work is a discretionary grant scheme and more information about the support it can pay for can be found in the supported internships guidance. Local authorities should not assume that an application has been successful but, to avoid taking into account the same support costs, may wish to ensure that Access to Work funding has been sought in accordance with the guidance, in deciding on any high needs top-up funding requirement.

277: Where the costs, less any other available funding, are more than £6,000, these may be eligible to be funded from local authorities’ high needs budgets. Students on supported internships, whose support costs are less than £6,000, must not be regarded as students with high needs, even though they have an EHC plan.

Part-time or part year students: post-16

278: We also consider young people to be high needs students when they are part-time or part-year and their additional support funding would total more than £6,000 if provided over the full academic year, as agreed with the local authority in which the student is resident. See guidance regarding the funding rates and formula used in the funding arrangements for 16 to 19-year-olds for more information.

279: Where a school or college has enrolled, or is considering enrolling, a high needs student who will attend on a part-time or part-year basis, they should hold discussions with the relevant local authority as commissioners of high needs provision. The normal funding approach should then apply, in line with the principles outlined in this guide.

Students aged 19 to 25 with an education health and care (EHC) plan and funding restrictions in schools

280: Students aged 19 to 25 with an EHC plan who are continuing in education may have a range of options, including attending FE colleges, independent learning providers and SPIs. The school funding regulations require that a local authority may not use its high needs budget to fund places, or pay top-up funding, for 19 to 25-year-olds attending a school, for example, a maintained school, academy, a NMSS or an independent school. There is an exception for those 19-year-olds who are completing a secondary education course started before they were 18.

281: In the event that a school considers that it has the appropriate specialist expertise to prepare students aged 19 to 25 with an EHC plan for adult life, including independent living and employment, it will need to establish separate post-16 provision to do so. To receive high needs funding for such young people, a school would have to set up a legally and financially separate entity to provide the appropriate environment for young people of that age group. Such new post-19 specialist provision would normally be set up as a special post-16 institution (SPI). To be eligible to receive high needs place funding from ESFA for the first time, SPIs must have been included in ESFA’s annual place change notification process by a local authority and must successfully complete the High needs funding: due diligence process for special post-16 providers. The high needs funding due diligence process for new special post-16 providers guidance contains more information.

282: New SPIs funded high needs place numbers allocations from ESFA are based on those returned by the local authority through the place change notification process.

283: For information on learners aged 19 to 25 without an EHC plan see Annex 4.

Students aged over 25

284: A local authority must keep an EHC plan under review. For a student with an EHC plan when they are 24 years old, the plan normally ceases when the student turns 25, although local authorities have a power to extend an EHC plan until the end of the academic year in which the student turns 25.

285: If a local authority extends the EHC plan until the end of the academic year, the local authority must continue to provide top-up funding to the FE college until that time.

286: If the local authority makes an exceptional decision not to extend the EHC plan to the end of the academic year, it must discuss the transition arrangements for the young person with ESFA. Place funding is allocated to the FE college by ESFA for the full academic year and would not normally be clawed back if the EHC plan is not extended.

287: Local authorities are not responsible for commissioning provision for students with SEND who are 19 to 25 without an EHC plan or who are over the age of 25. Links to the funding arrangements for these students are at Annex 4.

Annex 1: special schools minimum funding guarantee

288: The MFG protection for maintained special schools and special academies in 2022 to 2023 will be set by a condition of grant that applies to local authorities’ dedicated schools grant (DSG) and protects schools from seeing a reduction in funding from year to year, assuming that the number and type of places remains the same between the 2021 to 2022 and 2022 to 2023 financial years.

289: In 2022 to 2023, the MFG for special schools/academies will remain at 0% of their core budget (place + top-up funding) on a per pupil basis, that is, the top-up funding must be set at a rate to ensure a school’s total budget is no less per pupil than in the previous year. The minimum funding guarantee (MFG) calculation must assume that all pupils in the school are placed by the provider local authority and that all top-up rates received by the school are those set by the provider local authority.

290: High needs funding that the school receives in place of the teachers’ pay grant (TPG), the teachers’ pensions employer contribution grant (TPECG), and the pensions supplementary fund, should be excluded from the MFG calculation. When calculating protection, local authorities should make sure that they are comparing like for like. Adjustments can be made for changes in the nature of the provision. For example, if previous top-up funding rates included an element for a commissioned service which is no longer provided by the school, the value of that element can be discounted when calculating the MFG protected level.

291: Once the MFG assessment confirms 2022 to 2023 top-up funding rates received by the school are in line with the guarantee, they can then be applied to reflect the actual number and type of places at the school.

292: Where a local reorganisation takes place and there are changes to bandings, for each special school the 2021 to 2022 pupils and their categories of need should be attributed as far as possible to the new bandings for 2022 to 2023, to assess whether any school loses more than the MFG.

293: Where the MFG is breached and the local authority intends to fund one or more schools below the guaranteed level, the authority must request that the relevant condition of grant is disapplied, using the disapplication request proforma accompanied by relevant supporting information/evidence. Local authorities are expected to produce a worked MFG calculation prior to considering a disapplication request – see table 3 below.

294: All disapplication requests from local authorities seeking exceptions to the MFG rule will be considered on a case-by-case basis, and on the basis that each request, will apply for one year only. No prior year approvals will be carried forward.

295: Local authorities submitting ‘continuation’ requests should ensure the disapplication request is comprehensive, as if a new request was being presented, comprising the necessary up to date supporting information and financial modelling, in line with the guidance considerations set out below.

296: It is important to stress that where a local authority has adjusted the top-up funding across a number of schools, for example, following a review of its top-up funding rates and as a result some schools are gaining funding and some are losing, a disapplication request is only relevant to the schools whose funding would fall below the guaranteed level. Any decision on such a request will relate directly to those schools, and not to the others that might be benefitting from such a reorganisation of the funding levels. Consequently, local authorities should not, through this process, seek endorsement of the entirety of a new top-up funding scheme that they are intending to implement across some or all of their special schools.

297: In devising a new scheme of top-up funding that may result in a breach of the MFG for one or more schools, local authorities should take particular care to ensure that:

• they have considered the financial impact on the schools affected
• the quality and sustainability of the provision they will need from those schools
• any transitional protection that would help with the changes

298: A detailed options appraisal, thorough consultation with the schools affected, particularly with those whose future funding levels might trigger the need for a disapplication request, are important. Information on this appraisal and consultation activity should be included in any subsequent disapplication request. There is also a requirement that high needs funding arrangements are discussed in the local schools forum, so consultation with a wider range of schools and colleges may be necessary.

299: When requesting a disapplication, it is essential that the local authority provides a comprehensive summary of this key information in the disapplication proforma. This should be accompanied with the following supporting information that can be annexed:

• financial modelling, in line with the examples provided in this annex – the financial impact on those schools affected by the MFG breach, including the year-on-year change in total funding and/or information about any previously agreed reductions in funding
• detailed information about the consultations that have been undertaken with the schools adversely affected, including relevant supporting local contextual information, such as the schools’ financial health and current reserves or deficits
• any proposals for continuing support to minimise any adverse impact on special schools, to monitor the financial impact and ongoing viability, and to review the implementation of the changes
• in line with the 2010 Equality Act, details of the full equality impact assessment undertaken

300: The worked modelling examples below provide two scenarios of how the MFG is calculated for a 100-place special school. The first (table 3) shows the funding in 2021 to 2022, when it was occupied by a total of 90 pupils, 30 in each of 3 different bands. This is considered a baseline and the same number of places, pupils and levels of need should be used for 2022 to 2023. The calculation then highlights the impact of any such changes on top-up amounts or other schools budget funding, whilst offering the same level of provision, the implications of which are summarised below.

Table 3: MFG calculation – a worked modelling baseline example

Special schools funding: 2020 to 2021	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£3,000	£4,000	£5,000	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£90,000	£120,000	£150,000	£360,000
Total funding	£390,000	£470,000	£500,000	£1,360,000

Table 4: MFG calculation – a worked modelling example where the funding remains above 0% MFG

2022 to 2023: MFG scenario 1	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£2,700	£4,100	£5,300	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£81,000	£123,000	£159,000	£363,000
Total funding	£381,000	£473,000	£509,000	£1,363,000
MFG % difference from 2021 to 2022	N/A	N/A	N/A	0.2%

Table 5: MFG calculation – a worked modelling example where the funding is below 0% MFG

2022 to 2023: MFG scenario 2	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£3,000	£3,800	£4,500	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£90,000	£114,000	£135,000	£339,000
Total funding	£390,000	£464,000	£485,000	£1,339,000
MFG % difference from 2021 to 2022	N/A	N/A	N/A	-1.8%

301: In the first modelling scenario (table 4), one of the three top-up funding rates has reduced. Overall, the funding for the school would remain above the 0% MFG level if the number and types of places remained the same. Therefore, 2022 to 2023 top-up funding rates are in line with the guarantee and funding to the special school should reflect these rates (for pupils placed by the provider local authority), the number of students in each band and the actual numbers of places.

302: In the second modelling scenario (table 5), two of the three top-up funding rates have reduced. However, in this case, the funding for the school is below the 0% MFG level; and so, the rates will need further adjustment in order to be compliant with the condition of grant, or a disapplication request would have to be made.

303: We’d advise those local authorities planning for a disapplication request to contact ESFA at the start of the process.

Annex 2: Responsibility for children and young people who move between local authorities

304: Local authorities are responsible for conducting the education, health and care (EHC) plan needs assessment and, where necessary, issuing EHC plans and securing the provision specified, for children and young people who are in the local authority’s area (Section 24(1) Children and Families Act 2014). Local authorities should fund any special educational provision for children and young people with EHC plans from the high needs block of the dedicated schools grant (DSG), which is allocated on a formulaic basis, including factors relating to the characteristics of the children and young people resident in their area (further information can be found in the high needs national funding formula: technical note). Therefore, responsibility for special educational needs (SEN) and high needs funding is normally based on where the child or young person lives.

305: Under the Children and Families Act 2014, local authorities are responsible for children and young people with SEN who are ‘wholly or mainly resident’ in their area. These duties are based on where the child or young person lives and not on where they are educated. Where a child or young person is educated outside the area of the local authority where they usually live, the local authority in whose area the child normally lives is responsible for conducting the EHC needs assessment and issuing an EHC plan, where necessary, and for securing and funding that provision. Some children and young people may require residential educational placements (particularly those with the most complex needs). In such cases, it is the department’s view that the child or young person continues to be considered as living in the area of the local authority that placed them in the residential provision (since a residential school or college placement, even for 52 weeks of the year, is educational provision and not a place where a child or young person lives, i.e. the child or young person will remain resident at their family home) and, therefore, they would continue to have the duty to maintain any EHC plan.

306: The high needs national funding formula (NFF), as well as using data relating to the children and young people resident in the local authority’s area, includes a basic entitlement factor and import/export adjustment that together ensure local authorities are appropriately compensated for the high needs place funding for schools and colleges. This funding allocation is paid directly to the schools and colleges either by the local authority that maintains the school or by ESFA in the case of academies, non-maintained special schools (NMSS) and colleges.

307: Where a child or young person moves from the area of one local authority into the area of another (for example, changes where they usually live), the ‘new’ local authority becomes responsible for meeting the statutory SEN duties (as detailed in the SEND Code of Practice, section 9.157 to 9.162). This may happen where a child’s family moves, or in the event that a young person decides to remain living where they have been educated. If the child or young person already has an EHC plan, the ‘old’ local authority is required to transfer the EHC plan to the ‘new’ local authority on the day of the move, or within 15 working days of becoming aware of the move. The ‘new’ local authority then becomes wholly responsible for maintaining the plan and funding the specified educational provision. The ‘new’ local authority must review the EHC plan within 12 months of the plan being made or being reviewed by the old authority, or within 3 months of the plan being transferred (whichever is later). The ‘new’ local authority may conduct a new EHC needs assessment, regardless of when the previous EHC needs assessment took place, since local variations may mean that arrangements in the original EHC plan are no longer appropriate.

Looked after children (LAC)

308: Looked after children (LAC) are those who have been taken into care or who are being provided with accommodation by a local authority in its statutory role under the Children Act 1989. More than half of LAC have some form of SEN, and it is likely that a significant proportion of them will have an EHC plan. A significant proportion of LAC live with foster parents or in a children’s home and attend schools in a different local authority to the local authority that looks after them. The Care Planning, Placement and Case Review Regulations 2010 distinguish between the “responsible authority” (the local authority that looks after the child) and the ‘area authority’ (the local authority in which the child is placed). Local authorities who place LAC in another local authority’s area (for example with foster parents) need to be aware of that authority’s SEN and disabilities local offer if the children have SEN. Where an assessment for an EHC plan has been started, the assessment must be carried out by the authority where the child lives (is wholly or mainly resident), which may not be the same as the authority that looks after the child, as set out in section 10.8 of the SEND Code of Practice. If a disagreement arises, the authority that looks after the child will act as the ‘corporate parent’ in any disagreement resolution.

309: When a local authority places a LAC with an EHC plan in another local authority’s area (for example with foster parents), the local authority where the LAC lives (is wholly or mainly resident) becomes responsible for maintaining their EHC plan (including paying any top-up funding), in the same way as any child or young person who moves from one local authority’s area to another.

310: The policy intention behind this is that the local authority where the child lives knows their local schools and educational provision better, so they are better able to assess whether the child needs special educational provision on top of what is ordinarily available.

311: The Inter-authority Recoupment (England) Regulations 2013 permit the local authority where a LAC with an EHC plan lives to recoup the cost of primary or secondary education, which includes additional special educational needs and disabilities (SEND) educational provision (for example, the costs of top-up funding), from the local authority responsible for looking after the child. Recoupment of education costs will not normally be appropriate, however, as from 2018 the high needs funding formula and associated arrangements have been designed to ensure that local authorities’ allocations of funding for SEND are based on the characteristics of the children and young people living in their area, including any LAC. In addition, there are adjustments to reflect the costs relating to the movement of pupils and students living in one local authority area who receive their education in another authority area.

312: Inter-authority recoupment may remain appropriate in some circumstances, however, following mutual understanding and agreement on how the costs of educating LAC are funded through the local authorities’ respective funding allocations. It should be noted that the recoupment regulations do not provide for recoupment of costs of further education (FE) provision and so costs of additional SEND provision for young people in FE cannot be recouped in this way.

Post-19 provision for young people accommodated under the Care Act 2014

313: For a young person aged 19 to 25, the local authority where they live is responsible for conducting any EHC needs assessment, issuing an EHC plan where necessary, and for securing and funding that provision.

314: Children cease to be ‘looked after’ when they are over the age of 18 (some children will cease to be looked after at 16 or 17 and others will continue to be looked after until their eighteenth birthday). The Inter-authority Recoupment (England) Regulations 2013 apply only to LAC (up to their eighteenth birthday), and so do not apply to those aged 19 or over. Once they are no longer looked after, the recoupment regulations no longer apply. This should not matter as the local authority where the young person lives will have been funded through the high needs funding formula to meet the costs, in the same way as for any other young person who lives in their area.

315: Some care leavers will remain living with their former foster parents past their eighteenth birthday in ‘staying put’ arrangements, but they are no longer ‘looked after’. The local authority which ‘looked after’ a child remains responsible for meeting their leaving care duties regardless of where the young person may now be living in England or Wales (section 23A(4) of the Children Act 1989).

316: This includes providing the young person with support for the expenses associated with living near where they are seeking work, working, or receiving education or training.

317: Decisions on adult social care placements may change the local authority responsible for making SEN provision. It is the department’s view that, where a young adult is accommodated under the Care Act 2014 in a residential adult social care placement (as opposed to residential education) made on a long-term basis (for example, with the intention that it is to be permanent for the foreseeable future), it is likely to be considered to be a change in the adult’s residence. Therefore, if a young person aged 19 to 25 has been accommodated under the Care Act 2014, in a permanent residential care placement in a different local authority area, it is likely they will have moved into the area of the ‘new’ local authority, unless there are factors indicating otherwise. Therefore, for the purposes of the Children and Families Act 2014, the ‘new’ local authority would be responsible for securing and maintaining any EHC plan.

Annex 3: Health and social care costs

318: Where a child or young person with special educational needs (SEN) has relevant health or social care needs, these should be addressed within an integrated education, health and care (EHC) plan. Responsibility for securing the provision specified in the plan sits with the relevant statutory bodies: the local authority for education and social care provision, and either the Clinical Commissioning Group (CCG) or (in some cases) NHS England for health provision.

319: The high needs block is intended to meet the educational costs of children and young people with SEN or who require alternative provision. The dedicated schools grant (DSG) may only be used for the purposes specified in the DSG: conditions of grant and Schools and Early Years Finance (England) Regulations 2021. This means that the high needs block may not be used to meet non-educational costs, except where specifically permitted. The costs of securing health provision (specified in section G of an EHC plan) should be met by either the CCG or NHS England. The costs of securing social care provision (specified in sections H1 and H2 of an EHC plan) should be met by the local authority from their social care budgets.

320: However, the Children and Families Act 2014 acknowledges that specific types of health or social care provision may be considered as education or training. The Children and Families Act 2014 requires that health or social care provision which educates or trains a child or young person must be treated as special educational provision (that is, ‘deemed’ educational provision). This particularly applies to therapies such as speech and language therapy, physiotherapy and occupational therapy. This means that it will be recorded in Section F of an EHC plan and will be treated as special educational provision and, therefore, in scope of the high needs budget. However, all decisions about whether health care provision or social care provision should be treated as special educational provision must be made on an individual basis, as set out in section 9.74 of the SEND Code of Practice.

321: While independent and non-maintained provision frequently offers integrated education, health and social care provision, only educational costs (including ‘deemed’ educational costs) should be funded by the DSG. In some cases, the integrated package of support will be costed and charged through a single fee. In such cases, the local authority should charge non-educational costs to the responsible partners. We would expect the relevant partners to have agreed the basis for the placement and its funding before it is confirmed (for example, before a final EHC plan is issued). The social care element of accommodating children with special educational needs and disabilities (SEND) in schools should be charged appropriately.

Annex 4: other information

322: This section provides information that may be useful but is not covered in this guidance.

Support funding through the ESFA adult education budget

323: Support funding is available through ESFA adult funding methodology for learners aged 19 and above without an education, health and care (EHC) plan via the adult education budget (AEB). Support funding (learning and learner support) enables providers to meet the additional needs of learners who may have certain barriers to start or complete their learning goal.

Learning support

324: Learning support is available to meet the cost of putting in place a reasonable adjustment, as set out in the Equality Act 2010, for learners and apprentices who have an identified learning difficulty or disability, to achieve their learning goal.

325: Learning support must not be used to deal with everyday difficulties that are not directly associated with a learner’s or apprentice’s learning on their programme.

326: All learning support claims must be reported in the Individualised Learner Record (ILR). To claim any costs that exceed the fixed monthly rate the earning adjustment statement (EAS) must also be used. There are two exceptions where the entire cost can be claimed through the EAS:

• where the learning aim is delivered in less than one calendar month
• 16 to 18 traineeships without a 16 to 19 study programme

Further information on claiming costs can be found in paragraph 197 of the adult education budget (AEB) funding rules 2021 to 2022 (current published guidance is for 2021 to 2022).

Exceptional learning support claims above £19,000

327: Learners who need significant levels of support to start or continue learning can claim exceptional learning support (ELS) if their support costs more than £19,000 in a funding year.

328: Learners aged 19 to 24 requiring significant levels of support should have an EHC plan provided by their local authority and, therefore, would access funding from them.

329: Providers must submit ELS claims at the beginning of the learner’s programme, or when it is identified that the learner requires support costs more than £19,000 in a funding year, by completing and sending the ELS claims document.

330: To claim ELS for a learner aged 19 to 24 confirmation must be provided as to why the individual does not have an EHC plan. This should be a letter or email from the learner’s local authority stating the reasons why the individual does not need an EHC plan.

Learner support

331: Learner support is available to provide financial support for learners with a specific financial hardship preventing them from taking part or continuing in learning. Before providers award support to a learner, they must identify their needs within:

• hardship funding: general financial support for vulnerable and disadvantaged learners
• 20+ childcare funding: for learners aged 20 or older on the first day of learning who are at risk of not starting or continuing learning because of childcare
• residential access funding: to support learners where they need to live away from home

332: Further information on ESFA AEB funding and performance rules is available within section ‘Who we fund’ of the adult education budget (AEB) funding rules 2021 to 2022 guidance (current published guidance is for 2021 to 2022).

Support funding through the apprenticeships funding methodology

333: Funding support for apprentices (all ages) is met by ESFA through the apprenticeship funding methodology. ESFA provides learning support for apprentices to help with learning that affects their ability to continue and complete their apprenticeship.

334: Learning support is there to meet costs of putting in place reasonable adjustments for apprentices who:

• have a learning difficulty or disability as defined in Section 15ZA(6) Education Act 1996 (as amended by section 41 Apprenticeships, Skills, Children and Learning Act 2009
• as a result of this learning difficulty or disability, require reasonable adjustments in order to be able to complete their apprenticeship, including any reasonable adjustments to complete English and maths requirements and end-point assessment

For all age apprentices, both learning support and learner support follow the apprenticeship funding rules

335: Apprentices (aged 16 to 24) with an EHC plan are able to access learning support and exceptional learning support as detailed in the apprenticeship funding rules. Any apprentice can access learning support (or exceptional learning support); however, an assessment must be undertaken to identify whether an apprentice has a learning difficulty or disability that directly impacts their ability to complete the apprenticeship on which they are enrolled.

336: Additionally, apprentices aged 16 to 18, and apprentices with an EHC plan, or care leavers aged 19 to 24 will qualify for an additional payment of £1,000 towards additional costs associated with training, for both the provider and the employer. They will receive this payment at the start of the apprenticeship if the apprentice is either:

• aged between 16 and 18 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
• aged between 19 and 24 years old and has either an EHC plan provided by their local authority or has been in the care of their local authority

Full details are available in the ‘additional payments’ section of the apprenticeship funding rules.

337: More information on apprenticeships is available within the further education and skills apprenticeships guidance.

Free meals for further education (FE) colleges

338: Further information on free meals for FE colleges can be found in the 16 to 19 education: financial support for students guidance. This includes information on where the cost of meals is sometimes included as part of the package of support that is agreed with local authorities.

Special educational needs and disabilities (SEND) code of practice

339: Local authorities, maintained schools and academies, general FE colleges, non-maintained schools and all independent special schools and SPIs on the section 41 approved list must have regard to the department’s statutory guidance on the SEND system for children and young people aged 0 to 25.

Welsh students studying in English FE colleges

340: The Welsh Government may consider paying high needs funding for students from Wales studying in English FE colleges. The college should assess the needs of the student and then contact the Welsh Government to discuss payment of high needs place and top-up funding (elements 2 and 3). The funding through the 16 to 19 national funding formula (element 1) will be paid in the usual way direct by ESFA to colleges.

341: Colleges are not expected to recruit students from outside their normal recruitment area and should note that the Welsh government may decide not to make payments of high needs funding for students at an English college where suitable provision is available nearer to their home.

Welsh pupils with high needs attending English schools

342: English and Welsh local authorities continue to have a statutory basis for the recoupment of the costs of certain pupils with high needs who are attending schools across the border from where they live. The Inter-authority Recoupment (England) Regulations 2013 enable local authorities to recover the costs of pupils with EHC plans or an individual development plan (IDP), pupils in special schools, and pupils in hospital education.

343: There are no equivalent statutory arrangements for pupils or students from other countries in the UK or elsewhere. Local authorities, schools and colleges are able to negotiate the recovery of costs as they consider appropriate, taking account of other relevant legislation (such as the Equalities Act 2010.