Comparing the costs of maintained vs independent school SEN funding: the last word?

October 13th, 2015 by Clive Sheldon QC

The First Tier Tribunal frequently has to compare the costs of educating a child with special educational needs (SEN) in the independent sector (the parents’ preferred choice) with the costs of attending a school in the maintained sector (the local authority’s preference). Over the past year, according to Upper Tribunal Judge Mitchell, the outcome of SEN appeals in England where parents sought independent schooling had ‘started to resemble a lottery’, with different tribunals reaching contradictory outcomes on similar facts. Judge Mitchell has sought to bring order to the system in his judgment in the consolidated appeals in four cases: Hammersmith & Fulham LBC v. L  [2015] UKUT 0523 (AAC).

The appeals to the Upper Tribunal concerned the comparative cost analysis of an independent school and a special school, and required consideration of section 9 of the Education Act 1996 (“the 1996 Act”): “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 in the appeals involved the approach to 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 has a vacancy; and when comparing the costs of an independent school with SEN-reserved places in a specialist unit. In both scenarios, the Upper Tribunal held that the place funding for the special school and SEN-reserved places was to be ignored, as that funding would be incurred by the local authority in any event. 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, and then compared with the cost that would be incurred in attending the parents’ preferred independent school.

The Upper Tribunal judge arrived at this conclusion based on his understanding of the detailed legislative scheme for funding maintained schools: the School Standards and Framework Act 1998, and the relevant regulations. For the financial year in question (2014/15) those were the School and Early Years Finance (England) Regulations 2013 (SI 2013/3104). He explained 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 Upper Tribunal judge 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.

The Upper Tribunal judge then analysed the extensive case law dealing with section 9, 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 Upper Tribunal judge concluded that ‘place funding . . . is not an additional cost of a maintained school, for section 9 purposes, if the school has unfilled places.’

Where, however, the choice was between an independent school and a maintained mainstream school without reserved places for SEN, the Upper Tribunal judge said that the AWPU (age weighted pupil unit) normally represents an additional cost for the purposes of section 9 and should be taken into account, along with any additional funding required to meet the child’s needs.

As the Upper Tribunal judge noted, however, this analysis may be less significant in the future, as changes made by the Children & Families Act 2014 will mean that the test to be applied for school naming disputes will be that of 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”.



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