Schools could be stripped of cash to support pupils with serious physical and mental disabilities, after government officials blocked councils from boosting their "high needs" budgets.
High needs budgets are aimed at pupils who have terminal illnesses, physical and mental disabilities or other significant special educational needs and disabilities (SEND).
Many local authorities have already been warning of a growing black hole in their high needs budgets.
Now, Tes has discovered that at least 12 parts of the country have been banned by the Department for Education from propping up high-needs funding with money taken from elsewhere in the schools budget.
This will leave local authorities with “unpalatable choices”, such as cutting back on the extra money schools receive to support some SEND pupils, according to Julie Cordiner of School Financial Success, a school finance consultancy.
Historically, local authorities have filled shortfalls in their high-needs budgets with money transferred from the main school funding grant that they receive from central government.
But, as of 2018-19, local authorities will no longer be able to move more than 0.5 per cent of their main schools grant into the high needs pot, without the agreement of their schools forum or permission from the education secretary.
A Freedom of Information request by Tes has revealed that the Department for Education has granted only around half of local authorities’ requests to divert cash into their high needs budgets in 2018-19.
Ms Cordiner, who has previously advised the DfE on school funding matters, said: “If I was a school in a local authority area that had had a transfer refused, I'd want to know how they are going to re-balance their high needs budget without adversely affecting my funding for pupils with high needs.
“If a local authority doesn't receive permission for a transfer, it will have some unpalatable choices to make to balance its high needs budget.”
For example, she said, some councils will have to review the amounts that schools can be given for “top-up” SEND funding.
This is money that schools are given - on top of the notional £10,000 contained in their ordinary budgets for each SEND pupil - if children need extra support.
The purpose of the top-up reviews would be to make efficiencies, and "some schools will lose out from them", Ms Cordiner said.
Local authorities left with gaps in their high needs budget were also more likely to “challenge schools on how they are using their notional SEND budget before qualifying for any payments,” she suggested.
There were 48 local authorities that asked for permission to move funding into their high needs budgets in 2018-19, according to the FOI response.
Out of the 29 requests that were not later withdrawn, 16 have been approved by the DfE, while 12 were blocked. One is pending a decision.
Valentine Mulholland, head of policy at the NAHT headteachers’ union, said the number of requests “highlights the overall shortage in both schools block and high needs funding”.
She added: “This is making it much harder for mainstream schools to meet the needs of pupils with SEND and for special schools to deliver the level of support their pupils need.”
However, the number of requests being turned down “reassures us that the DfE are exercising care and judgement when considering the implications", she added.
The freedom of information response points out that local authorities can continue to make requests to move funding into high needs throughout the financial year, so the figures may be adjusted later on.
The new rules limiting local authorities' powers to move schools money around are part of the national funding formula being introduced in 2018-19.
In total, the DfE received more than 200 appeals – known as "disapplication requests" – from local authorities to allocate money to schools in a different way to that set out under the national formula, Tes has previously revealed.
A Department for Education spokesperson said: “High needs funding has been protected in real terms over the next two years, and over the same period the government has promised an additional £1.3bn in funding for schools and high needs.
“Councils have always had the freedom to request to adapt their funding allocations to meet local needs or provide extra support for pupils with special educational needs, and they continue to do so.”
The local authorities that have not had their request to transfer money into their high needs budget approved, according to the DfE:
Local authority DecisionBarnsley Not allowed Bath and North East Somerset Not allowed Derby Not allowed Dorset Not allowed Hackney Not allowed Hammersmith and Fulham Not allowed Hillingdon Not allowed Kingston upon Hull City of Not allowed Kingston upon Thames Outstanding Lambeth Not allowed Nottinghamshire Not allowed Rotherham Not allowed Wokingham Not allowed