‘Be Prepared’ The changing pressures on Independent and unregistered Alternative Provision.
There are challenges building for those working in non-maintained alternative provision.
At Close the Gaps we love working with professionals with a passion for supporting young people struggling with mainstream education. Even just this month we’ve seen professionals we’ve supported open APs in Rochdale and Bradford.
Increasingly though, we’re having to bring a note of challenge and caution. There are some changes and pressures ahead that are beginning to be seen in the sector – things that will influence anyone who relies on funding coming through local authorities and schools. I thought it may be helpful to outline where I think the pressures are coming from and, more importantly, how to mitigate these risks. We’d need a huge cultural shift not to need a range of alternative provisions and special independent schools to supplement the maintained offer, they are still going to be needed but it’s going to be a harder market to succeed in. Whilst, of course, most people in the sector are working primarily for the young people they serve doing so does need to be sustainable and financially viable.
The pressures:
Government
The DfE have made a push to increase inclusion in mainstream schools since the election with funding allocated for new special school places, to expand specialist units within schools and £740 million to increase places for pupils with SEND by 10,000.
In addition to this, Ofsted’s new framework, which is still in consultation stages is looking like it will include an inclusion section and how well providers support vulnerable and disadvantaged children and learners. Ofsted frameworks are one of the most important drivers for practice in schools and an inclusion measurement is likely to drive initiatives that increase the number of pupils accommodated within mainstream schools reducing the number needing alternative education.
Bridgette Phillipson has recently talked too about curbing profits on private SEND schools https://schoolsweek.co.uk/private-send-school-profiteering-curbs-under-consideration/ . This is well justified in some circumstances, the level of profit available over the last few years has been underlined by the willingness of private equity investors to back SEND schools and the huge fees charged to local authorities by some settings. On average, an independent specialist place costs LAs double what it would cost in a maintained school. Whilst most people would find it hard to argue that these profits are a positive thing for education, lots of APs and Independent SEND schools do function as businesses and may be affected by caps on profit or a move to contract with not-for-profit alternatives.
Local authorities
Local authorities are required by law to set balanced budgets and have been allowed by law to keep SEND spending deficits off their balance sheets. The current deficit has risen to £4.6bn with the override planned to end in March 2026. The DfE estimates that 33% of local authorities will have a deficit in high needs budgets greater than their reserves when this override finishes.
38 authorities have signed a safety valve scheme where they are given a contribution towards their over-spend in return for meeting targets around cutting spending. The agreements can be viewed here: https://www.gov.uk/government/publications/dedicated-schools-grant-very-high-deficit-intervention
Any local authority with an agreement will be looking to work hard to reduce any spending on SEND and most include targets to reduce spending on independent provision. All local authorities are facing mounting costs, particularly around adult and children’s social care but also around the rising number of children with EHCPs (25% increase between 2022-23 and a 140% increase between 2015 and 2023-24). That is coupled with around a third increase in exclusion numbers (all of which LAs have a responsibility to place).
All this means that local authorities are looking to lower their spending at every opportunity. They have very limited budgets which are going to come under more strain unless there is major reform before March 2026. There is an increased risk of sudden changes to spending and contracts. Two local authorities stopped using unregistered provisions for any of their young people in the last year, almost overnight and this kind of sudden response may become more common as an LA approaches bankruptcy.
Schools
The recent agreed pay deal for teachers and national insurance changes haven’t been fully funded by the government. This, in connection with rising costs means that school budgets are becoming increasingly restricted with schools and academy chain leaders talking of the need for staff redundancies and spending cuts over the next year. As budgets shrink spending on AP is going to come under pressure and value for money for placements is going to become more important.
The restricted budgets and the increased Ofsted focus on inclusion is driving an increased interest in setting up internal APs within schools. Successful IAPs are great, reducing exclusion rates and providing a targeted intervention to reintegrate and support struggling young people, but they do mean fewer young people are entering external APs where these are working well.
Does that mean we’ll see an end to independent and unregistered AP and Special Schools?
It’s not all doom and gloom for those running independent APs.
Any change in the sector will take a long time to deliver, a new maintained school takes around 5 years to start and there aren’t any current application rounds for AP free schools to open.
The number of high needs and AP pupils is growing sharply and there aren’t enough places available. EHCP numbers have grown, and exclusion numbers have grown over the past few years. There are more young people struggling to access mainstream education, inclusive options across the system are important and there aren’t enough places with specialist approaches.
Whilst schools are developing better inclusion and internal provisions there will always be a need to educate those pupils that schools can’t have ‘on-site’.
LAs are legally required to cover education of pupils with EHCPs, medical needs and who have been excluded. These services can’t be cut in the way libraries or bin collections can.
So how can AP and independent providers mitigate the risks? Here’s ten tips.
1) Do your due diligence
If you’re thinking of setting up an AP or Independent Special School, then do your research first. Questions to ask may be:
What is the financial position of your LA?
What are their long-term plans and targets for SEND provision and Inclusion?
What provision is already in the area?
What do other provisions charge?
How would local schools feel about your offer?
Where are the local areas of demand?
If you’re unsure about this then we offer a service to support new settings: https://www.closethegaps.co.uk/apfeasibility-studies
2) Offer value for money
In an era of restricted budgets value for money becomes more important. Where does your pricing fit with your competitors? How can you offer value for money?
One of the largest expenditures for schools and LAs accessing independent provision and APs is transport for students. There are some examples of LAs spending more on taxiing pupils to provisions than the provision itself costs. Can you offer a minibus pickup or transport as part of your costing?
3) Offer a high quality service
When things become stretched those settings that offer excellence in what they do are more likely to be used than those without as high a level of quality. Are all your processes and practices best practice? Download our AP review tool to do a self-evaluation that might help reveal some ways to improve what you offer.
4) SEND specialists are doing well
I come across some settings that are struggling for pupils and some with waiting lists. Most of those with waiting lists offer some specialisation of staff or provision around specific SEND needs. Is this something additional you can add?
5) Ensure good outcomes
In my conversations with local authorities and schools a consistent area of criticism is the AP that only offers a safe place but no outcomes for young people. What can you offer in terms of re-integration, academic qualifications, employability, transitions etc? How do young people move forward in concrete ways after attending your provision?
6) Develop different models
Are there ways you can diversify your offer? Some APs support themselves with tutoring offers outside school hours or parent funded sessions. Others partner with schools to provide their in-house AP rather than take on the costs of an independent premises. Having a number of income streams rather than just traditional AP enables some to subsidise others during periods of low numbers.
7) Set up as a CIC or Charity
With more of a negative focus on the profit people make from public funding it could be helpful to set up as a CIC or charity rather than a profit making company. There are additional funding streams accessible through grants for CIC’s and charities and you show that the aim isn’t profit and financial.
8) Widen your customer base
Where you only run with a small number of commissioners the impact of one of those commissioners deciding to stop using you is huge. The more LAs or schools you can get on board the more resilient you are to changes in strategy and use from those commissioners. If you’re at the point of beginning, then thinking about a site that can access pupils from more than one local authority can be helpful.
9) Work on customer relationships
I come across a surprising number of APs where relations with their main commissioners aren’t that positive. We may not always agree with decisions or processes used by LAs or schools and their stance on inclusion may be different from ours but the relationships we have with them are key. That means fostering strong relationships with decision makers and investing in the communication and effort to strengthen these.
10) Shout about your success
There will always be a need for AP but, if things get stretched then those APs that offer the best quality for the best price will be chosen by commissioners. That’s reflected in the points above, but you also need to make sure that people know about your quality. How do you share your success? Do commissioners know the extra mile you go to for the young people in your setting? Are you regularly communicating and sharing what you are doing well?
If we can help you with any areas of AP improvement, sustainability or compliance do let us know - https://www.closethegaps.co.uk/contact-us
