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Information about EFA funding principles for young people with high needs aged 16 to 25, for the academic year 2015 to 2016.
This guide is primarily for local authorities and institutions. It’s intended to support the commissioning discussions that both parties will have with each other over the coming months as student placements are agreed.
The information in the guide will also be of use to anyone who has an interest in high needs funding. It describes how the high needs funding system will work for post-16 institutions for the academic year 2015 to 2016.
Local authorities have lead responsibility for implementing the special educational needs and or disabilities (SEND) reforms in local areas.
However, general further education (FE) colleges, sixth-form colleges, non-maintained special schools (NMSS), approved special post-16 institutions (SPIs) and 16 to 19 academies (including free schools) have taken on significant new legal duties. These include the duty to cooperate with the local authority on arrangements for children and young people with SEND (with a reciprocal duty on the local authority) and to admit a young person if, following consultation with the institution, the institution is named in an Education Health and Care (EHC) plan.
Collaboration between local authorities and institutions to agree a pupil’s or student’s support package and timely agreement of funding, placements and contracting will lead to more efficient ways of working and better outcomes for young people and their parents and carers.
2015 to 2016 funding allocations
Allocations of place funding for institutions are underpinned by data about the number of pupils/students with high needs occupying places.
The place numbers for the academic year 2015 to 2016 can be found on GOV.UK along with the outcomes of the 2015 to 2016 exceptional cases process. This information is correct as of December 2014 and will be updated again by the end of April 2015.
The dedicated schools grant (DSG) allocation for the financial year 2015 to 2016 can be found on GOV.UK.
The DSG includes the allocation of high needs budgets to local authorities and these are shown on the 2015 to 2016 high needs block tab in the allocations table.
Definition of a 16- to 25-year-old high needs student
For funding purposes, a high needs student is defined as:
- a young person aged 16 to 18 who requires additional support costing over £6,000
- any young person aged 19 to 25 subject to a Learning Difficulty Assessment (LDA) or an EHC plan who requires additional support costing over £6,000
In all instances, a high needs student’s placement must be commissioned by the local authority and include the top-up funding (element 3) to be paid to an institution. An agreement must be in place between the 2 parties to that effect.
If the local authority does not agree a placement (even where an institution may have assessed a student as requiring additional support or a student has been offered a place by that institution) and top-up funding for a student is not agreed to, these students can’t be counted as high needs for funding purposes.
Learners aged 19 to 25 in schools
Students aged 19 to 25 with EHC plans who are continuing in education may have a range of options, including attending FE colleges.
From the academic year 2015 to 2016, the DSG cannot be used to fund places for or incur other expenditure (ie top-up funding) on 19- to 25-year-olds in special schools (maintained and non-maintained) and special academies. For more information, see regulation 14 and paragraph 18 of schedule 2 to the School and Early Years Finance (England) Regulations 2014.
There will be an exception only for those 19-year-olds who are completing a secondary education course started before they were 18. This will reflect the current position, whereby students cannot remain at special schools beyond the age of 19 (subject to the same exception for those completing secondary education courses).
Schools wishing to offer provision to students aged 19 to 25 may wish to consider setting up a legally and financially separate entity. They may then wish to apply for a direct contract and funding for places from Education Funding Agency (EFA) through their high needs students market entry process. This process ensures that any such new provision is tailored to the needs of persons aged 19 to 25 with EHC plans.
Students aged 19 to 24 without an EHC plan or LDA
For students with SEND aged 19 to 24 without an EHC plan or LDA, the Skills Funding Agency (SFA) assumes the responsibility for commissioning provision even when the support costs exceed £6,000. In this situation, learning support funding should be used and more information about this can be found on GOV.UK.
Local authorities should not use their high needs budget allocation from their DSG to fund students who are over the age of 19 and do not have an LDA or EHC plan in place. The School and Early Years Finance (England) Regulations 2014 state that schools funding (ie provision funded via the DSG) can only be used to support students who are in FE and aged over 19 but under 25 if they are subject to an LDA or EHCP plan. Regulation 6 describes this in full, under section d) ii).
Where a young person aged 19 (or over but under 25) arrives at college and, based on the institution’s assessment, is likely to need additional support costing over £6,000, the institution can request a statutory assessment for an EHC plan from the young person’s local authority. In these cases, the local authority has up to 6 weeks to decide whether to conduct an assessment.
While the decision to assess or actual assessment period is ongoing, the institution should enrol the learner as an adult learner funded by the SFA. If the learner subsequently goes on to receive an EHC plan then the institution should make a change to the individual learner record (ILR) and the learner would be funded by EFA.
Students over 25
For students with SEND over the age of 25 the SFA assumes the responsibility for commissioning provision even when the support costs exceed £6,000.
A local authority must keep under review the ongoing need for an EHC plan. For those students that are in receipt of an EHC plan, this normally ceases when a 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. If a local authority decides to extend the EHC plan until the end of the academic year, then they remain an EFA-funded student, and the local authority must continue to provide top-up funding to the institution until that time.
If the local authority decides not to extend the EHC plan to the end of the academic year, then it is for the SFA and the local authority to discuss the transition arrangements for the young person. Place funding will already have been passed to the institution by the EFA for the full academic year as part of their allocation and will not be clawed back because place funding is not associated with individual students.
The local authority must liaise with the SFA before they commission a programme for a student that is likely continue past the academic year in which the student turns 25, as this means that the commissioning and funding will transfer to the SFA.
How high needs funding works
The funding system has two aspects which are
- place funding known as elements 1 and 2 for post-16 institutions (except special schools and special academies)
- top-up funding (known as element 3 for post-16 institutions)
Place funding cannot be reserved by a local authority for a specific pupil or student, or local authority area.
Place funding includes the funding which pupils and students at an institution attract for their core education and basic programmes and funding to meet the first £6,000 of additional support costs. Place funding it is not intended to align exactly with the number of pupils or students in an institution at any given time, but instead provides a base level of funding for institutions and financial stability for institutions to help with stability of provision and planning.
Top-up funding is that which is required over and above place funding, to enable a pupil or student with high needs to participate in education and learning. EFA makes an allocation to local authorities for high needs as part of the DSG. Local authorities decide how much to set aside in their high needs budget, which they then use to pay top-up funding to institutions.
Place funding in special schools and special academies
In 2014 to 2015, EFA aligned the way it funds post-16 students in special schools with the way pre-16 places are funded. Since this time, all places within special schools, special academies and NMSS have been funded on a single flat rate of £10,000 per place.
Place funding in other post-16 institutions
This section applies to FE institutions, mainstream schools and academies, SPIs and CCPs.
The first part of place funding is element 1. This is paid to institutions and represents the funding that all students at the institution attract for their study programmes.
It does not take into account the additional support costs of high needs students. For maintained schools this funding is passported through local authorities as the sixth-form grant, for other institutions it is paid directly to them by EFA.
EFA funds the majority of institutions with post-16 provision on a lagged student basis, using the national post-16 funding formula. For these institutions, the total allocation of element 1 for the 2015 to 2016 academic year is based on the number of students recruited in 2014 to 2015. This applies to:
- FE institutions
- commercial and charitable providers (CCPs)
- maintained schools
These organisation types should therefore not seek funds from local authorities for any shortfall in element 1 in 2015 to 2016. A shortfall will be rectified in the lagged allocation for 2016 to 2017.
The cash value of element 1 paid to each institution changes each year and is an average for that institution based on historical data. Therefore variations in the value of element 1 between individual high needs students according to what programme they are studying are not relevant to the amount that a local authority will pay in top-up funding under element 3.
For 2015 to 2016 local authorities should continue to use a national average figure of £5,000 as the assumed element 1 value for all post-16 high needs students, except for those students in special schools and special academies.
Element 2 is the second component of place funding and provides £6,000 to help meet the additional support costs for high needs students.
This element of place funding is not intended to meet the needs of students who need a lower level of support costing less than £6,000, who should be supported through an institution’s pot of disadvantage funding.
EFA always confirms allocations of place funding in good time and well ahead of the beginning of the academic year to allow institutions enough time to plan and manage resources and provision. Therefore, allocations of place funding do not always reflect subsequent commissioning and placement decisions made by local authorities and the following principles apply:
Element 2 places are not reserved for a specific student or local authority. Institutions are free to fill places in the order that local authorities agree and commission placements for individual students, and to decide how best to apportion their total allocated place funding across the actual number of commissioned places.
Where a local authority wants to commission further places at an institution that has filled all the places it has been funded for (irrespective of which local authority has filled them), agreement needs to be reached with the institution on the level of funding required. A local authority should not automatically be charged an extra £6,000 per head if it is agreed that the institution can provide the support package for additional students at marginal additional cost. This is of course less likely in the case of students with high needs whose support is often individualised and expensive because of the nature of their needs. In all cases local authorities and institutions will need to agree a mutually acceptable approach that represents best value and the local authority will need to fund this from its high needs budget.
Local authorities have the flexibility to agree small changes to the published 2015 to 2016 high needs place numbers allocated to maintained schools and maintained special schools. Such revisions, including the movement of funding between these maintained institutions, are to be managed and agreed directly with the institutions concerned by using the high needs allocations flexibly and within the terms of the sixth-form funding agreement with EFA.
To ensure good planning and best use of funds, it’s important for local authorities working across sub-regions and regions to collaborate and share intelligence on available places. EFA has published the breakdown of the academic year 2015 to 2016 place numbers on GOV.UK.
Unused element 2 places
Place funding for FE institutions, CCPs and SPIs has been allocated directly to the institution as part of the total funding allocation from EFA and agreed under the terms and conditions of its contracting arrangements.
A local authority may reasonably expect an institution to explain why a certain level of additional top-up is appropriate for a particular place before entering into its own contract, but cannot seek to recover or reconcile funding for element 2 places which it perceives as being unused from the previous or current academic year and earmarked for the authority. This is because place funding is not associated with any local authority or individual student.
EFA funding rates and formula guidance states part-time students whose additional support funding would total more than £6,000 if provided over the full academic year are also classed as high needs students.
Where an institution has or is considering enrolling a student that meets this criteria, the institution should, as always, hold discussions with LAs as they are the commissioners of high needs places. If a part-time place is agreed by the local authority, the institution should use place funding where available. If the institution has used all its allocated element 2 place funding then the local authority should fund the part-time costs from its high needs budget.
Where the agreed support costs for a part-time high needs student in that academic year are £6,000 or less, then the institution should not record the learner as a high needs student on the ILR so as not to affect lagged funding in later years.
Top-up funding: element 3
Element 3, top-up funding, is the funding required over and above the place funding to enable a student with high needs to participate in education and learning. This is administered by the local authority in which the student is resident from their high needs budgets, in line with their commissioning of places for children and young people with high needs for whom they have responsibility.
Top-up funding rates should mainly reflect the additional support costs in excess of £6,000 relating to individual pupils and students.
Top-up funding can also reflect costs that relate to the facilities needed to support a 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.
Contracting arrangements for top-up funding
Local authorities should work with schools, academies, NMSS, FE institutions and SPIs where they have high needs students, to set funding rates and confirm the funding that institutions will receive from the authority.
The local authority must issue the institution with an agreement or contract confirming the support that is to be provided, the funding rates and payment schedules. This document can be designed as an additional part of the EHC plan to avoid duplicating information about the support to be provided. Where the institution is maintained by the authority then the documentation could be even more streamlined.
EFA urges local authorities to reduce administrative costs, particularly for institutions with students from multiple local authority areas, through adopting common commissioning approaches with neighbouring authorities and use the same contracts for high needs students across all institutions. Standard contracts, such as the National Schools and Colleges Contract, are available on the Association of Directors of Children’s Services website.
EFA also encourages local authorities to share good practice in common commissioning approaches and bureaucracy reduction with other local authorities.
It continues to be a condition of grant attached to DSG allocations that local authorities must make payments of top-up funding to institutions in a timely fashion and on a basis agreed with the institution. Payments should be monthly unless otherwise agreed (eg termly in advance). Where a local authority has agreed a placement, it is not appropriate that a student is placed at an institution without a contract in place. In previous years EFA has asked local authorities to set in advance the dates by which they planned to make decisions on placements, agree contracts, and make payments for students known to them and to monitor their own delivery against these plans. Institutions should contact EFA where there are issues around the issuing of contracts or timely payments. EFA will closely examine cases and consider remedial action where there is clear evidence that a local authority is not meeting the required conditions of grant.
For the academic year 2015 to 2016 there are now mandatory timescales under the Children and Families Act 2014 (the 2014 Act) around EHC plans. Where a pupil or young person is moving from one institution to another, the 2014 Act requires EHC plans to be complete – including naming the institution they will move to – by 31 March in the calendar year of the transfer. As a transitional measure any EHC plan for those moving from secondary school to a post-16 institution or apprenticeship starting in September 2015 – including specifying the post-16 provision and naming the institution – must be completed by 31 May 2015.
Therefore, the timescales applicable for local authorities in the academic year 2015 to 2016 are:
- decision on placement by 31 May 2015
- contract signed with institution by 30 June 2015
- student starts by 30 September 2015
- first payment made by 31 October 2015, where a monthly payment has been agreed
Welsh students studying in English FE colleges
The Welsh government may consider paying top-up funding for high needs learners from Wales studying in English FE colleges. The institution should assess the needs of the student and then contact the Welsh government to discuss payment of top-up funding. Element 1 and element 2 funding will be funded in the usual way by EFA.
Institutions are not expected to recruit learners from outside their normal recruitment area and should note that the Welsh government may decide not to make top-up payments for a learner at an English institution where suitable alternative provision is available nearer to their home.
Post-16 study programmes
The majority of young people with high needs attending a school, college or special post-16 institution will be subject to a statement of SEN, an LDA or an EHC plan. Local authorities must use the evidence from the statement, LDA or EHC plan to make consistent, effective and robust assessments of the support the young person will need to move towards a positive outcome.
EFA expects a local authority and an institution to work together to agree a suitable study programme for the young person, which must be tailored to their individual aspirations and support needs. A full-time course has a minimum duration of 540 hours and there is no set maximum or cap of 600 hours. EFA would not expect local authorities or colleges to set an arbitrary maximum number of hours for the study programmes, but instead to provide the number of hours required by the student to complete the programme.
Condition of funding
From the 2014 to 2015 academic year the condition of funding for maths and English has been applicable. More information on this including exceptions to the condition can be found on GOV.UK.
A supported internship is one type of study programme specifically aimed at young people aged 16 to 24 who have a statement of SEN, an LDA, or an EHC plan, who want to move into employment and need extra support to do so. There is further information on supported internships on GOV.UK.
Apprenticeships are also another option for high needs students. High needs funding for apprentices is met by the EFA through the SFA’s apprenticeship funding methodology, in summary this means:
- any apprentice that requires additional support qualifies for a payment of £150 per month
- if identified needs cost more than the monthly rate the provider can claim additional funding (up to £19,000) from the SFA on the ‘Earnings Adjustment Statement’ - this means the costs are fully funded at no cost to the provider, the EFA meets these costs
- should costs exceed £19,000 then the provider applies to the SFA for exceptional learning support, if agreed the SFA meets these costs and charges them to the EFA
- the provider should always work with DWP/JCP to access any support for people entering work before claiming EFA/SFA funding
If the apprentice does not have an LDA or EHCP then they are funded as a 19+ apprentice under the full SFA system and more information on this can be found in the section on students aged 19 to 24 without an EHC plan. This expects co-funding from the employer. More information on apprenticeships can be found on GOV.UK.
14 to 16 high needs students in FE
There is further information on 14 to 16 high needs students in FE institutions on GOV.UK.
Further information on free meals for FE institutions can be found on GOV.UK. This includes information for institutions where the cost of meals is sometimes included as part of the package of support that is agreed with local authorities.
Looking forward to the academic year 2016 to 2017
EFA’s aim for allocating funding for high needs places is to move towards a simpler system based primarily on lagged data. However, we can only move towards a lagged funding system if institutions record accurate data on high needs students. Institutions should only record a high needs student in the ILR or school census where a local authority has agreed to pay top-up funding.
EFA has been also been working with provider associations during the 2014 to 2015 academic year on improving the quality of data received at R04 and R06. EFA will continue with further data checks going forward and take action where there are discrepancies.
EFA is currently looking at ways of allocating place funding in the academic year 2016 to 2017 and encouraging institutions to focus on recording accurate data on high needs students in 2014 to 2015. We hope to have better quality data for this purpose, but decisions on the 2016 to 2017 allocations methodology will not be made until later in 2015.
Isos research project
The Department for Education is planning for a distribution of high needs funding to local authorities that is more formulaic, and less reliant on past levels of allocation that have become outdated, and on local decisions on spending that have partly determined how much is allocated.
To help with this, the department has commissioned some research, which is being undertaken by Isos Partnership. A wider call for evidence (now closed) has gathered more information which will help the development of options for high needs funding in future years.