The new schools national funding formula has been a topic of significant discussion in recent months for headteachers, business managers and governors and will be the defining issue facing schools in the next five years, as its impact will affect every aspect of schools’ operations.

Unsurprisingly, I have serious concerns about what this means for funding for special educational needs and disability, in both mainstream schools and special schools.

In terms of SEND budgets, local authorities have been living beyond their means for some time now, propping up their high-needs blocks (effectively the SEND budget for a LA) with money from elsewhere. But those days now seem numbered.

There is a perfect storm brewing for SEND funding in the upcoming few years due to a quadruple whammy of central government policy, financial decisions and the changing demography of children requiring specialist provision. Here are the four reasons for the crisis:

1. Local authorities will no longer be able to move funds

Local authority budgets are divided up into three blocks: early years, schools and high needs. Every local authority that I know of moves money between the three strands of its total education budget. One example might be the movement of a surplus from the early years budget − due to a lower than expected uptake of nursery places − to the high needs block, to address an in-year overspend or structural deficit.

But the consultation on the schools national funding formula proposes to remove the ability for LAs to do this.

As LAs already find it nearly impossible to live within their means with regard to the high-needs block, they can only cope, in my view, with this new restriction by removing any LA services that are non-statutory, such as behaviour or learning and language support services.

Of course, this may be a desirable outcome for the government, as it may want LAs to offer traded services, or multi-academy trusts and/or private providers to fill the gap. But on its own it will not solve the problem, something I have written about previously.

2. The switch from statements to EHCPs has left a funding deficit

Recent SEND legislation resulting in the move from statements of special educational need to education, health and care plans (EHCPs), with an accompanying increase in the upper age limit from 19 to 25, has created significant financial pressures for LAs without the commensurate funding to help manage it.

3. Pupil numbers are rising - it’s a time-bomb

The Department for Education’s latest pupil projection figures predict a rise in the number of children requiring a place in a special school - an eye-watering 21 per cent jump between 2015 and 2025. This is the biggest increase of any sector by far, yet there has been no communication about any central plan for extra places in existing schools, or to build new schools to cope with unprecedented demand.​

Where will these 18,000 children go? That’s right: 18,000. Leaving it to individual MATs (the vast majority are exclusively mainstream, remember) or interest groups to open a free school here or there in a piecemeal manner will not address the structural shortage of places.

Special schools are largely full or oversubscribed, so smart private providers which run existing independent special schools are likely to be building capacity as we speak to offer LAs solutions to this time-bomb. But, as you would expect, this will do nothing to ease cost pressures on the high-needs block; quite the opposite, in fact. It won’t stretch them. It will break them.

4. The Education Services Grant (ESG) will be removed in April 2017

Local authorities use ESG (sometimes called the top-slice) for many central services, including school improvement. It is not paid directly to maintained schools, but academies receive this money directly. ESG is currently allocated to LAs and academies at a rate of £77 per pupil in mainsteam primaries and secondaries; £327 per pupil in special schools; and £289 per pupil in pupil referral units.

Not only is ESG now being taken away, LAs will also be allowed to impose a levy on maintained schools to fund those activities previously funded through ESG. This will amount to a budget cut for schools - a cut that for our school will result in a net budget reduction of approximately £70,000 on this point alone.

I worry about many things as part of my job, but nothing comes close to the scale of this problem. This is not an issue confined to special schools. The vast majority of children with SEND are in mainstream schools (including half of all children with EHCPs) and the extra 18,000 pupils will have to go somewhere. Do you have space? I don’t.

This is an issue of real urgency and it needs clear direction and serious funding from central government to avoid another decade of dissatisfaction from parents and schools alike as we watch the system implode under the pressure.

Jarlath O’Brien is headteacher of Carwarden House Community School. His book Don’t Send Him in Tomorrow is published by Independent Thinking Press. He tweets as @JarlathOBrien

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