The government has published its new Schools White Paper, Every Child Achieving and Thriving, setting out proposed reforms to how children and young people with Special Educational Needs and Disabilities (SEND) are identified, supported and funded.
It is important to be clear from the outset: this is a White Paper, not legislation. The proposals will require consultation and statutory change, and implementation is expected to be phased over several years, with full transition potentially extending into the mid-2030s.
However, for Trust CFOs, SBMs, COOs and Finance Directors, the direction of travel is now clear. The reforms signal a structural shift in how SEND support is funded and delivered and that has material long-term implications for financial planning, staffing models and risk exposure.
Below we outline the key changes that matter most from a finance perspective and what you should be considering now.
1. A Shift Away from EHCP-Driven Funding
At the heart of the proposals is a move away from the current model, where Education, Health and Care Plans (EHCPs) often act as the gateway to additional high-needs funding.
Under the proposed reforms EHCPs will remain in place, however, they will be restricted primarily to children with the most complex needs. A new system of Individual Support Plans (ISPs) will apply to a broader group of pupils with SEND.
For finance leaders, this represents a potential long-term shift in how funding flows into schools and Trusts.
Currently, many staffing structures, particularly Teaching Assistants and specialist roles, are partially or wholly funded through EHCP top-up income via the High Needs Block. If eligibility for EHCPs narrows over time, Trusts with high volumes of EHCP-funded provision may see:
- Reduced top-up income
- Increased expectation that support is delivered from delegated or mainstream inclusion funding
- Greater pressure on core budgets
The transition is not immediate. Reassessment and reform are expected to begin later in the decade. But the financial dependency risk is worth modelling now.
2. Introduction of Individual Support Plans (ISPs)
The proposed ISPs aim to ensure that all children identified with SEND have a documented plan setting out evidence-based support, even where they do not have an EHCP.
Operationally, this may strengthen inclusive practice in mainstream settings. Financially, it raises key questions:
- Will funding for ISPs be delegated through new formula mechanisms?
- Will this sit within existing High Needs Block allocations?
- Will funding be ringfenced or absorbed into general school budgets?
While additional funding has been announced to support inclusion, the mechanism for distribution and the relationship to current top-up arrangements remains to be clarified.
For Trust finance teams, the critical issue is not whether support will be provided, but how that support will be funded sustainably.
3. New National Investment - But Distribution Matters
The White Paper outlines significant additional investment, including:
- £1.6bn for inclusive mainstream provision
- £1.8bn to create access to specialist expertise (e.g. educational psychology, speech and language therapy)
- £3.7bn capital investment to expand specialist and inclusion places
These are substantial commitments. However, CFOs will rightly ask:
- Is this new money or re-profiled funding?
- How will it flow: via local authorities, direct grants, or formula adjustments?
- Will it replace or supplement existing EHCP-linked funding?
The strategic risk for Trusts is not underfunding, but funding redistribution. Where funding moves from pupil-linked top-up to more general inclusion allocations, visibility and predictability of income may reduce.
Trust-wide modelling will be essential.
4. High Needs Block and LA Deficit Implications
Many local authorities continue to carry significant High Needs Block deficits. Reform of EHCP eligibility and funding mechanisms may be partially intended to stabilise this pressure nationally.
For Trusts, this creates two areas of uncertainty:
- Local authority approaches to transition and reassessment.
- Potential changes to local top-up banding structures or commissioning models.
Trusts operating across multiple local authorities will need to monitor how reforms are interpreted and implemented locally, as financial impact may vary regionally.
This reinforces the importance of Trust-level SEND strategy, rather than isolated school-level responses.
5. Workforce and Cost Structure Implications
If more SEND support is expected to be delivered within mainstream budgets, staffing models may need to evolve over time.
Key questions finance leaders should consider:
- What proportion of current staffing is directly funded through EHCP income?
- What is the true cost per SEND pupil (EHCP vs SEND Support)?
- How much cross-subsidy currently exists from core budgets?
Many Trusts find that SEND provision is already partially subsidised by Age Weighted Pupil Unit (AWPU) funding. Reform could widen this gap if not managed strategically.
This is not an argument for reducing provision, but for increasing financial transparency around it.
6. Timeline: No Immediate Shock, But Strategic Planning Required
It is crucial to avoid overreaction. The reforms will take time:
- Consultation and legislative development are expected over the next 1–2 years
- Framework development and piloting likely to follow
- Gradual transition from EHCP reliance from around 2029 onwards
- Full implementation potentially mid-2030s
There is no requirement for immediate restructuring or budget realignment.
However, given the long lead time of staffing decisions, estate planning and specialist provision investment, early modelling will reduce future disruption.
6. What Should Finance Leaders Do Now?
While no operational changes are required today, there are prudent steps worth taking.
- Model EHCP Dependency Risk
Assess:
- Percentage of total income derived from EHCP top-up
- Staffing posts reliant on that income
- Scenario impact of a 10–20% reduction over time
- Strengthen SEND Cost Visibility
Develop clearer reporting on:
- Cost per EHCP pupil
- Cost per SEND Support pupil
- Cross-subsidy levels between core and high-needs funding
- Align Finance and SEND Strategy
SEND strategy cannot sit solely with the SENDCO. CFOs and COOs should:
- Engage in forecasting SEND growth trends
- Align inclusion strategy with financial sustainability
- Consider Trust-wide models of specialist provision
- Monitor Legislative Developments
Stay close to consultation updates and local authority briefings. The detail of funding mechanisms will determine the true impact.
Final Thoughts
The Schools White Paper does not create an immediate financial shock. But it does mark a strategic shift away from a system heavily reliant on EHCP-triggered funding towards one where mainstream inclusion carries greater responsibility.
For finance leaders, the key is balance:
- Do not react prematurely
- Do not assume the status quo will remain
- Begin modelling and scenario planning now
Trusts that understand their SEND cost base, funding dependency and workforce structure will be best placed to adapt smoothly as reform moves from White Paper to legislation.
Over the next decade, SEND reform will become one of the most significant structural funding changes in the sector. The conversation between SEND strategy and financial strategy has never been more important.
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