Alan Marsh - Funding Inclusive Education: The Economic Realities

The Economic Realities

Alan J. Marsh

First published 2003 by Ashgate Publishing

Reissued 2018 by Routledge
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Copyright Alan J. Marsh 2003

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A Library of Congress record exists under LC control number: 2003040361

ISBN 13: 978-1-138-71783-1 (hbk)
ISBN 13: 978-1-315-19592-6 (ebk)

... whose eyes glazed over when the question of funding and finance was raised...

This book is concerned with funding inclusive education for pupils with special educational needs but without statements and is based on my PhD thesis. The writing of the book has been conducted in the context of a continuing concern that the cost management of special educational needs (SEN) and its effectiveness is becoming increasingly difficult. This has manifested itself in a number of ways but a common experience is the inability on the part of Local Education Authorities (LEAs) to contain budgets within previously agreed totals. A central theme throughout the book will be the national and international concern about the escalating costs of providing for pupils with special educational needs (e.g. Audit Commission, 2002a; Special Education Expenditure Project, 2002).

The national concern over the growth in special educational needs expenditure has led many LEAs to direct resources towards budgetary control as well as towards the identification of individual pupil need. Coopers and Lybrand in 1996 used the term the 'SEN time bomb' to describe the escalating budgetary commitments of pupils with special educational needs.

Concerns about the management and inclusion of pupils with SEN have been voiced by the Audit Commission throughout the last decade and more specifically by a joint publication by the Audit Commission and OFSTED in 2002. The Audit Commission have undertaken value for money audits in nearly all LEAs during the 1990s and have highlighted deficiencies in the 'Provision for Pupils with Special Educational Needs' which related to:

In 2000/01 about one third of LEAs inspected by OFSTED had unsatisfactory strategies for the inclusion of pupils with special needs and arrangements for the allocation of SEN funding were often unclear and obscured the respective accountability of schools and LEAs (Audit Commission/OFSTED, 2002).

In relation to these deficiencies, and in particular to poor framework of policy and strategy, the Audit Commission felt that LEAs, in general, had not been clear about the purpose of their SEN funding. A central point throughout this book is that a funding formula can be viewed as a key instrument of policy.

Since the implementation of the 1988 Education Act and the introduction of Local Management of Schools, LEAs have been faced with strategic choices in four main areas (Coopers and Lybrand, 1996a). These are:

Whilst there is a considerable overlap between the four areas, this book is mainly focussed on resource allocation for inclusive education by formula funding and its associated links with resource definition, resource management and resource monitoring and evaluation. The research reported in the book has been carried out against the backcloth of changing legislation in the field of special educational needs and Local Management of Schools. During the course the book various sets of guidance have been issued by the government about the implementation of Local Management of Schools e.g. Circular 7/88 (DES, 1988a); Circular 7/91 (DES, 1991) and Circular 2/94 (DFE, 1994b). Additionally the 1993, 1996 and 2001 Education Acts and Regulations have received royal assent together with the 1998 School Standards and Framework Act which set out the new Fair Funding arrangements. Essentially the 1993 Act built on the principles and practices first set out in the 1981 Education Act. It also required the Secretary of State to issue a Code of Practice on the Identification and Assessment of Special Educational Needs which came into effect on 1 September 1994. The 1993 Education Act has since been superseded by the 1996 Education Act and 2001 Special Educational Needs and Disability Act. A Green Paper on Special Educational Needs was published in October 1997 Excellence for All Children (DfEE, 1997a) with an associated Programme of Action (DfEE, 1998a) and a revised Code of Practice in November 2001 (DfES, 2001c).

Although resourcing special educational provision in the days before LMS was a comparatively simple matter (Fish and Evans (1995), it was not without its own problems e.g. House of Commons (1993) and the Audit Commission (1992a). Formula funding was proposed by Local Management of Schools as an alternative method of resource allocation to the three main systems described by Knight (1993a). These are:

Historic funding describes the case whereby the school receives in a particular year what it spent the previous year modified up or down by a few increments. If a formula is well designed then it can be more equitable than historic funding since it can take into account changing needs. Bidding represents the case whereby the school puts forward a proposal for funding based on known criteria, however this can be costly to administer. Prior to LMS, 'LEA officer discretion' was used to allocate extra staff to schools where they judge the needs to be greatest. The method of 'officer discretion' is not as equitable as formula funding as it can be opaque and open to the personal preferences of the adjudicating officer. However there is a still ongoing debate whether more 'complicated' procedures for distributing resources are actually more effective or not and indeed what the notion of effectiveness means in this context. Although a strong case can be put forward to support the use of formula funding over other methods of resource allocation, there is still the problem of accountability.