The economics of high need don’t add up

I have been following with interest the recent debates around provision for special educational needs, specifically the concerns about the dominant deficit model of disability and learning difficulty. In particular, I have found the recent blogs and publications by Ben Newmark and Tom Rees to be compelling and thought provoking. I am no expert in this area, particularly with regards to the ethical, philosophical and emotional perspectives on the problem, so this post steers well clear of those topics.

Where I may be able to offer some insight is into the economics of the problem, which I think it is important to understand if you are taking a position in the debate.

I attended a meeting of headteachers in the county in which I work last week where the topic of high-needs funding was discussed in heated terms. For those that don’t know how this works, here we go.

Students with an EHCP (Education, Health and Care Plan) attract additional resources for the school they attend so that their additional needs can be supported. Schools must cover the first £6,000 of this cost from their designated budget. The EHCP document sets out what additional funding the school will receive over and above the first £6,000 of resource need.

The first problem with this approach is that the majority of local authorities are significantly in deficit for funding high needs. In my county, this deficit is nearing £30 million (relatively low in comparison to others). The Government do not collect data for high needs deficits (as opposed to the data they collect and publish on the reserves school trusts hold – I wonder why one and not the other?), but the F40 group estimate the national deficit to be someone between £2-3bn. These deficits, I am told, are accounted for off-balance sheet because in many cases the local authority would be bankrupt if these were fully accounted for.

The second problem is that schools with a high number of students with EHCPs are financially disadvantaged. For example, my own school has 25 students with EHCPs, so we must contribute £150,000 p/a towards supporting their additional needs. We are about average for a secondary school. This would not be a problem if students with high needs were evenly spread across schools. However, some schools have significantly higher proportions of students with high needs, therefore are disproportionately disadvantaged. We’ll come back to why this is in a moment.

In some areas, schools with lots of students with high needs receive no additional funding to help. Fortunately, our local authority top up funding for the schools with the highest proportions of students with high needs. This additional funding used to kick in if 1 in 75 of your students had an EHCP (1.3%). This threshold was raised to 1 in 40 a few years ago (2.5%), and is set to increase to 1 in 30 next year (3.3%).

The third problem is that the number of students with an EHCP is increasing rapidly. There are complex reasons for this, but the main cause is the power handed over to parents to push for EHCPs for their child. In my view, the empowerment of parents is a good thing in most regards. I would also say at this point that I have rarely come across a child for whom an EHCP, and the additional resource it provides, are unwarranted (although on occasion a student has outgrown the need for the level of support described, which is a positive thing). However, the increasing rate with which EHCPs are being awarded is placing further pressure on local authority finances, meaning the further erosion of top-up funding to schools.

The final problem relates to the inequality in the system. Why is it that some schools attract higher numbers of students with EHCPs? One factor is that they develop a reputation for quality provision which makes it more likely that parents will name the school on the EHCP (meaning the school must accept the student). Perhaps this reputation is warranted, or perhaps they become known as the school with lots of students with learning difficulties. The irony is that the more students with EHCPs on roll, the thinner resources will be spread. This system creates an economic disincentive and leads to distortions in behaviour, including alleged discriminatory practices by schools seeking to avoid the financial burden of high needs. This is a significant unintended consequence of parent choice coupled with inadequate funding.

But the economic problem of ‘scarce resources, infinite wants’ which will be familiar to every economics student does not only apply to financial considerations. The time, knowledge and cognitive load of teachers as they attempt to meet the needs of increasing numbers of students with EHCPs in classrooms are also finite.

The trend in the English school system has been towards students with high needs attending mainstream schools. Furthermore, once on roll in the school, the expectation is increasingly that these students will be taught the same curriculum as other students as far as possible, and the withdrawal of students from classes for targeted interventions is increasingly discouraged. Coupled with a narrative which speaks against ‘differentiation’ in the sense of lowering one’s expectations for what children with special educational needs can achieve (a narrative fueled by Ofsted’s EIF, for instance), the classroom teacher is increasingly expected to meet the ‘individual needs’ of a higher number of children within their classes than ever before so that they can access a challenging curriculum.

Now, to some extent this is a categorisation problem in that an increase in EHCPs does not necessarily equate to an increase in actual need. Indeed, this article from Education Datalab suggests that the number of students classed as having special needs overall (i.e. not just those with an EHCP) has fallen since the introduction of the new Code of Practice in 2018: although again this is likely to be a labelling effect, not an indication that real need has diminished. However, we are likely to find that any in-class support from a TA is now divided between students as schools group them together to achieve administrative efficiencies. And the categorisation of EHCP brings with it increased accountability, both for the school and for teachers, which will inevitably means that the needs of these children will be prioritised above those with the ‘SEN Support’ label.

How does a teacher meet this expectation? The answer: with difficulty.

To compound this problem, the expectations embedded in EHCPs are often unrealistic, particularly for secondary schools. In primary schools, a pupil is often taught for most of the week by the same class teacher and is supported by one, or maybe two, teaching assistants who know then well, and where the teacher and parent can, if they wish, communicate daily about the child’s welfare and progress at drop-off or pickup time. Provision is tailored, consistent, and under regular review. Contrast this with secondary school where the students comes into regular contact with 10 to 15 teachers each fortnight, a variety of teaching assistants, and a multitude of learning environments and differing expectations. The logistics and complexity of secondary school operations mean that the transition from primary school can be overwhelming for students with high level needs, no matter how hard the school works to mitigate this.

We must do better for young people with special educational needs. The way we talk about learning difficulty and disability must change. The measures of success we use must change. Our collective expertise must be developed so that we understand how the education system can be better geared towards the children who have historically been least well served. But for any of these changes to take place, we must attend to the economic deficiencies and inequalities which tie the hands of those who aspire for better provision.

The colleagues I work with talk of a crisis in high needs funding and the dysfunctional system which is meant to be meeting children’s needs. These terms are not used lightly. What I have described here is the tip of the iceberg. Something needs to change.

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