SEN funding comparison costs

Morris Hill and Ken Slade analyse a recent Upper Tribunal decision intended to bring clarity to SEN funding comparison costs cases.

Often, the First Tier Tribunal has to make a comparison between the cost of educating a child with special educational needs (‘SEN’) in the independent sector, the choice of the parents, and that of attending a school in the maintained sector, the preference of the local authority. In the last year, according to the Upper Tribunal’s (‘UT’) Judge Mitchell, the outcome of such SEN appeals in England ‘started to resemble a lottery’, with different tribunals reaching contradictory outcomes on similar facts. Judge Mitchell attempted to bring some order to the process via the consolidated appeals in four cases, known as Hammersmith & Fulham LBC v. L [2015] UKUT 0523 (AAC).

Background

The appeals concerned the comparative cost analysis of an independent school and a special school, requiring consideration of section 9 of the Education Act 1996 (‘the 1996 Act’) which states: “In exercising or performing all their respective powers and duties under the Education Acts, the Secretary of State and local authorities shall have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, so far as that is compatible with the provision of efficient instruction and training and the avoidance of unreasonable public expenditure.”

The particular issues here involved the approach that should be taken where there was a comparison between the costs of an independent school placement and the local authority’s special school, where the special school had a vacancy; and when comparing the costs of an independent school with SEN-reserved places in a specialist unit. In both scenarios, the UT held that the place funding for the special school and SEN-reserved places should be ignored, as that expense would be incurred by the local authority anyway, and that only the top-up funding for the particular child (including any extra transport costs to the local authority’s preferred placement) should be taken into account on the local authority’s side, then compared with the cost incurred in attending the parents’ preferred independent school.

The decision

The judge reached his decision based on analysis of the legislative scheme for funding maintained schools: the School Standards and Framework Act 1998, and the relevant regulations, which, for the financial year in question (2014/15) were the School and Early Years Finance (England) Regulations 2013 (SI 2013/3104). He noted that for maintained mainstream schools with reserved places for children with SEN, funding of £10,000 must be included per place (regulation 14(2)). The judge then explained that ‘This amount must be included in the school’s budget share whether or not the place is filled.’ Similarly with special schools (regulation 14(1)), local authorities are required to include the sum of £10,000 for each place.

Next, the judge considered the case law dealing with section 9 of the 1996 Act, and drew an analogy with the Court of Appeal’s decision in R. (on the application of GB) v Oxfordshire CC [2001] EWCA Civ 1358, which held that only the additional or marginal cost of the placement at the local authority’s provision should be taken into account. The judge concluded that ‘place funding . . . is not an additional cost of a maintained school, for section 9 purposes, if the school has unfilled places.’

Conversely, where the choice was between an independent school and a maintained mainstream school without reserved places for SEN, it was the judge’s view that the AWPU (age weighted pupil unit) normally represents an additional cost for the purposes of section 9 and should be taken into account, together with any additional funding that was needed in order to meet the needs of the child.

Conclusion and implications

This analysis may, as the judge himself noted, be less significant in future, due to changes made by the Children & Families Act 2014 which will mean that the relevant test will be that in Schedule 27 to the 1996 Act where parents wish their child to attend a non-maintained special school and certain independent special schools. That test is not concerned with “unreasonable public expenditure”, but with whether the child’s attendance at the parents’ preferred school would be incompatible with “the efficient use of resources”. We will no doubt see how that test is implemented in due course.

Morris Hill is an Associate and Ken Slade is a Professional Support Lawyer at Weightmans. Morris can be contacted on 0151 242 7990 or by email, while Ken can be reached on 0151 242 7953 or This email address is being protected from spambots. You need JavaScript enabled to view it..