We don’t have the funding! What can we do?
Local authorities are under a non-delegable duty to arrange the special educational needs provision for a child or young person with an EHC Plan. What happens though when there is a dispute?
School budgets are under increasing pressure and many Headteacher’s are reporting that they do not have sufficient funding from their Local Authority (LA) to be able to implement the requirements of Education, Health and Care (EHC) Plans. The result; closure of SEN classes, specialist mainstream provision and a reduction in the number of learning support assistants.
Surveys indicate that 98% of headteachers report insufficient SEN funding, with many cutting support or buying external services (e.g., therapists) due to reduced funding. The National Association of Head Teachers (NAHT) report a worsening SEN crisis, with 90% of headteachers struggling to meet needs.
But does it have to be like this? The answer is a firm NO.
Legal Framework
Under Section 42 of the Children and Families Act 2014, the LA has a statutory duty to secure the special educational provision specified in an EHC Plan. This responsibility lies solely with the LA, not the school, meaning the LA must fund the provision if the school lacks the resources. The law describes this as a “non-delegable” duty. The Courts have taken a firm stance and enforced it when LAs are challenged, often by judicial review.
Although schools must use their “best endeavours” to identify and meet the needs of pupils with SEN, this is limited by available resources. Under the Equality Act 2010, schools must make reasonable adjustments for pupils with disabilities, but this does not extend to funding provision beyond what is reasonably available within the school’s budget.
Mainstream schools receive a notional SEN budget (up to £6,000 per pupil with SEN) from the Dedicated Schools Grant (DSG) to cover low-cost, high-incidence needs. However, this is calculated by reference to a specific formula and the amount allocated is unlikely to cover all of the pupils identified with SEN in the school.
For children with EHC Plans, the LA must provide additional funding for high-needs provision beyond the school’s notional SEN budget. This is called top-up funding. Schools cannot unilaterally demand a specific level of top-up funding from a LA to deliver the requirements of an EHC Plan. However, the situation is nuanced, and the process involves collaboration, negotiation, and statutory obligations. Ultimately, the Local Authority is responsible for the EHC Plan and if insufficient funding is provided, that is open to challenge by both parents and the Governing Body.
Challenges
The SEN system is under significant strain, with a National Audit Office report (2024) noting that despite £10 billion in annual spending, the system is unsustainable due to rising demand and insufficient funding. Many LAs face deficits, pushing some toward insolvency.
It is also growing increasingly apparent that despite spending billions in the independent sector some LAs are failing to provide adequate top-up funding to state maintained schools and academies and are delaying EHC Needs assessments to avoid providing top-up funding, leaving schools to cover costs. ITV News reported that 97 councils spent over £3.7 billion on private school places for SEND pupils, including those with EHCPs, over the last three financial years (approximately 2021–2024).
The result is that those in the state sector are being squeezed and schools are now subsidising SEN provision for children with EHC Plans to the detriment of the other children.
Of particular concern is the use of banded funding schemes by LAs to allocate top up funding. Often the problem with such schemes is that the funding allocated to each band is insufficient to cover the costs of delivering the requirements of an EHC Plan. To date schools have not sought to challenge these funding processes but this has been at the expense of running up huge financial deficits.
What can be done about the situation?
Legal and Practical Options
Maintained schools are in a difficult position. Local authorities have statutory powers under the Education Act 1996 and other legislation, giving them significant control over maintained schools, including funding, admissions, and governance. Schools are legally subordinate to the authority, limiting their autonomy to challenge decisions without navigating complex legal processes.
Maintained schools also rely on local authorities for funding. Challenging decisions could risk strained relations, potentially affecting budget allocations or support, creating a disincentive for schools to act.
The governing body of a maintained school, while responsible for oversight, often includes local authority-appointed governors. This can create conflicts of interest, as governors may feel aligned with the authority’s perspective, reducing the school’s ability to push back effectively.
Challenging a local authority decision often requires judicial review, a costly and time-consuming process. Schools must demonstrate that the decision was unlawful, irrational, or procedurally unfair, which is a high legal threshold. Most maintained schools lack the resources or expertise for such battles.
Unlike maintained schools, Academies are under no such restrictions and subject to Trust approval and the funding of legal services, they are relatively free to initiate legal proceedings against a local authority. Whether they choose to do this depends on the politics of the local area they are situated in. However, increasing numbers of Academies are challenging a range of SEN related decisions and this includes the funding of EHC Plans.
Options open to schools
(1) Schools need to develop a clear and bespoke SEN policy and not rely on the “cut and paste” job currently deployed. This should set out clearly what provision is “ordinarily available” within their notional SEN budget and clearly set out the resources deployed for children with SEN.
(2) As part of all admissions consultations for children with EHC Plans, the school should set out clearly in its response to the LA the amount of top up funding required to deliver the requirements of the EHC Plan and provide a costed provision map. This will be important where a dispute over the level of top up funding arises.
(3) If the school has a specialist resource provision, it should establish its own banded funding scheme for LAs seeking places. Again, this would be costed against the requirements of the EHC Plans and schools should actively challenge LA banded funding schemes which do not cover the costs of delivering the child’s EHC Plan.
(4) If the LA refuses to provide the requested level of top up then the school should request a meeting with the LA’s SEND team to negotiate funding.
(5) If the LA still refuses, the Chair of Governors should formally write to the LA, citing Section 42 of the Children and Families Act 2014. They should provide evidence of the shortfall (e.g., cost breakdowns for staffing, resources, or external services). The LA is legally obligated to fund EHC provision. If the LA refuse, they must justify why the additional funding sought is not necessary or how the provision can be met within existing resources.
(6) Lodge a formal complaint to the LA citing that the refusal to provide the required funding is a breach of its duties under s 42 Children and Families Act 2014.
(7) Complain to the Secretary of State for Education using her powers under s 495 of the Education Act 1996.
(8) As a last resort, explore the use of judicial review against the LA for failing to meet its statutory duties under the Children and Families Act 2014. Schools rarely initiate judicial reviews directly; this is more common for parents or advocacy groups. However, ultimately judicial review may be an effective tool to formally challenge the inadequate funding of EHC Plans.
Collaborate with Governors and Parents
Headteachers should work with their school governors to review SEN policy and advocate for additional funding.
Where there are funding issues, the Governing Body should inform parents of EHC Plan pupils (without breaching confidentiality) and encourage them to liaise with the LA or seek legal advice. Governors have a strategic role in overseeing SEN provision and can pressure the LA. Parents can pursue judicial reviews or tribunal appeals against the LA, which may prompt additional funding being provided.
Ensure communications with parents are factual and professional to avoid escalating tensions.
Engage with the Schools Forum. If your school is represented on the Schools Forum, raise concerns about SEN funding allocation. Request a review of how the DSG high-needs block is distributed. If the LA proposes transferring funds from the schools block to the high-needs block, ensure your school’s financial position is considered.
Practical Steps to Strengthen Your Position
All state maintained schools and academies should take a pro-active approach to address funding difficulties. The following are recommended tips:
- Document everything: Keep detailed records of SEN spending, EHC Plan provision costs, and communications with the LA. This evidence is critical for funding requests, complaints, or legal action.
- Seek expert advice and be prepared to challenge the LA: At the point of a dispute with the LA, take legal advice so that the most efficient pathway to challenging funding decisions is made. LA decision making is poor and often lacks any evidential basis. Therefore, the prospects of successfully challenging the LA is high.
- Develop bespoke SEN policies: It is vital that the SEN policy details the provision which is “ordinarily available” and explains clearly how the notional SEN funding is utilised for children with SEN but not EHC Plans.
- Protect specialist resource provisions: It is essential for schools to develop their own top-up funding mechanisms which cover the costs of the provision. No specialist provision should ever need to be in deficit.
- Strengthen responses to LA admissions consultations for children with EHC Plans: Ensure that all requests for top up funding are properly costed when responding to admissions consultations.
Summary
Your primary legal recourse is to demand that the LA fulfil its Section 42 duty to fund EHC Plan provision beyond the £6,000 notional budget. Start by formally requesting top-up funding, escalate through complaints or mediation if needed, and be prepared to issue judicial review proceedings. Whilst LAs are frittering money away left, right and centre to the independent sector, because of poor decision making and commissioning arrangements, state schools are left with the crumbs and often inadequate funding. The law in this area can be utilised to liberate schools from this situation and ensure that children with EHC Plans can be properly supported and funded.
SEN Funding is a hot potato at the moment. With school budgets being stretched to the max, it is inevitable that SEN funding will come into sharp focus and disputes will arise.
Mark Small –
Solicitor-Advocate