Comparing placement costs and the EHC Plan period

The First Tier Tribunal (FTT) is familiar with the exercise of comparing the costs of rival placements, but an interesting point that arises from time to time, is whether the tribunal should look at the comparative costs for the first year of a placement, or is entitled to make the comparison over the full term of the placement. This can be quite significant if there is an unequal weighting of costs in year 1 through capital expenditure or for other reasons.

The SEN system embodied in the Children and Families Act 2014 works to a year by year basis. The statutory scheme of EHC Plans provided for in the Children and Families Act 2014 is predicated on the basis of an annual review of ECH Plans and a periodic right to re-assessment by a child who does not have a plan, but whom by reason of a change in circumstances may require a re-assessment as little as 6 months after an earlier assessment. In consequence, levels of SEN and levels of SEP to meet SEN, will vary, on a year by year basis, not only as children and young people enter or leave the system, but also as the SEN of those with EHC Plans changes and evolves between reviews.

The system is facilitated by matching funding to the provision that has to be provided as required by statute: education budgets, including making SEP to meet SEN are set on an annual basis. This occurs notwithstanding difficulties posed by limitations on central grants, council tax, and the possibility of local authority capping It is within that overarching framework, that the FTT has to make its determinations on the efficient use of resources and ensuring that it avoids unreasonable public expenditure.

Section 39 of the Children and Families Act 2014 provides:

(1)This section applies where, before the end of the period specified in a notice under section 38(2)(b), a request is made to a local authority to secure that a particular school or other institution is named in an EHC plan.

(2)The local authority must consult—

(a)the governing body, proprietor or principal of the school or other institution,

(b)the governing body, proprietor or principal of any other school or other institution the authority is considering having named in the plan, and

(c)if a school or other institution is within paragraph (a) or (b) and is maintained by another local authority, that authority.

(3)The local authority must secure that the EHC plan names the school or other institution specified in the request, unless subsection (4) applies.

(4)This subsection applies where—

(a)the school or other institution requested is unsuitable for the age, ability, aptitude or special educational needs of the child or young person concerned, or

(b)the attendance of the child or young person at the requested school or other institution would be incompatible with—

(i)the provision of efficient education for others, or

(ii)the efficient use of resources.

(5)Where subsection (4) applies, the local authority must secure that the plan—

(a)names a school or other institution which the local authority thinks would be appropriate for the child or young person, or

(b)specifies the type of school or other institution which the local authority thinks would be appropriate for the child or young person.

The purpose of this section is to ensure that a parental preference for a particular school is given effect, unless the local authority can demonstrate one of the matters in section 39(4) applies. The section is the successor to a predecessor provision found in the old law on statements contained in the former provisions of the Education Act 1996. Section 39(4) replaced the form paragraph 3 of Schedule 27 of the Education Act 1996 which provided:

Where a local authority make a statement in a case where the parent of the child concerned has expressed a preference in pursuance of such arrangement as to the school at which he wishes education to be provided for his child, they shall specify the name of that school in the statement unless-

(a)       the school is unsuitable to the child’s age, ability or aptitude or to his special educational needs, or

(b)       the attendance of the child at the school would be incompatible with the provision of efficient education for the children with whom he would be educated or the efficient use of resources.

Notwithstanding a finding of inefficiency in resources, under section 39(4), the FTT must go onto to consider parental wishes against, under section 9 of the Education Act 1996. Section 9 of the Education Act 1996 provides:

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.

This section enables the FTT to take into account wider considerations of public expenditure: in effect, anything that is not private expenditure. It would for example, enable ancillary social care costs arising from a particular placement, to be weighed in the balance. In the case of Southampton City Council v Tony Michael G and others [2002] EWHC 1516, Sullivan J was supportive of the proposition that expenditure over the course of a placement (lasting a number of years) was to be taken into account for the purposes of section 9. It might be argued that case was wrongly decided, as the decision conflicts with a decision of the Court of Appeal not cited to the High Court.

In the case of Oxfordshire County Council v GB and Others [2001] EWCA Civ 1358 the Court of Appeal summarised the correct approach to the evaluation of the cost of respective placements in these terms focusing on a comparative exercise in the context of the annual educational budget:

If so, there is no intelligible reason why a comparison of public expenditure as between an appropriate independent school and an appropriate maintained school should be at large. Mr Friel, indeed, defends the quantification of the cost of School MH, the independent school, as the bare annual fee – that is to say, the cost to the LEA’s annual budget of placing M there. In our judgment exactly the same is true of the cost of placing M in the hearing-impaired unit of School L: the question is what additional burden it will place on the LEA’s annual budget. That means, generally speaking, that the existing costs of providing School L and of staffing it and its hearing-impaired unit do not come into account.

This is not to say that there may not be particular cases in which some other method of comparison needs to be used in order to meet s.9. But as a matter of purposive construction of the section, it seems to us that what Parliament has called for in the ordinary run of cases is a consideration of the burden which the respective placements will throw on the annual education budget when matched against their educational advantages and drawbacks for the child in question. Costs which either the private provider or the LEA would be incurring with or without the proposed placement are accordingly not in general relevant. This being so, it is not necessary to say anything about the accountancy problems which would bedevil any endeavour to quantify the per capita cost of providing for a child’s education in the state sector.

It will be noted that  the Court of Appeal emphasised the need to consider the burden, which the placements throw on the annual education budgets and also, focused on the educational advantages/drawbacks for the child in question.

The case of WH v Warrington Borough Council [2014] EWCA Civ 398 noted that when the only relevant public expenditure is that incurred in the discharge of the educational functions it is difficult to see how a conclusion under section 9 can be different to a conclusion under the former paragraph 3(3):

If a local authority concludes that to specify the name of the school preferred by a parent would not be unsuitable to the child’s age, ability or aptitude or to his special educational needs (para 3(3)(a)) and would not be incompatible with the provision of efficient education or the efficient use of its own resources, then the authority must name the school and section 9 has no role to play in relation to the decision. But if it concludes that to specify the parent’s preferred school would be incompatible with the efficient use of its own resources, then it must go on to consider whether and how to exercise its discretion under section 324 of the 1996 Act. Section 324(4) requires it to specify the name of any school or institution which it considers would be appropriate for the child and which should be specified in the statement. One of the matters that it must take into account in exercising this discretion is the impact, if any, of section 9. In this respect, I agree with the analysis of Stadlen J in Hampshire County Council v R and SENDIST [2009] EWHC 626 (Admin), [2009] ELR 371 at paras 59 and 60. In other words, the authority must ask itself the question whether naming the school preferred by the parent would involve incurring unreasonable public expenditure generally. In many cases, the only relevant public expenditure will be expenditure incurred by the local authority discharging its education functions. In such a case, it is difficult to see how the result of the section 324(4)/section 9 exercise can properly differ from the result of the para 3(3) exercise. But in a more complicated case involving, for example, the costs of respite care, the answer may be different.

Although wider public expenditure than educational expenditure can be considered under section 9, this pre-supposes there is such expenditure to be considered.

It might be argued that it is impermissible to take a “whole placement” approach to cost for these purposes, or to look beyond the 12 months of the EHC plan, or to make sweeping judgments on wider benefits that capital expenditure might bring over years to other children.  Moreover, the approach adopted by the Court of Appeal reflects the scheme of annualized review, assessment and budgetary provision inherent in the Children and Families Act 2014. This requires SEN and SEP to be considered on an annual basis: it is wrong in principle to therefore consider SEP over a period beyond the life of the EHC Plan.

Local authorities make separate capital provision through their budgets for new schools, classrooms and facilities. Such provision is a paradigm example of expenditure that should be planned systematically, rathe rather than made on an ad hoc basis through individual appeals. Large scale expenditure over several years is simply not apt to be made in the context of a plan which may change every 12 months.

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