The first Budget from the new Labour government reflects a strong commitment to addressing the challenges faced by a SEND sector in urgent need of support. The funding announced is much needed for the sector, especially the increased support for further education after years of underfunding. In the months ahead, we look forward to working with policymakers to ensure that this financial support reaches specialist colleges and has a tangible impact on their work in supporting young people with SEND.
Increased SEND and FE funding
The additional £1 billion for SEND services and £300 million for further education is a much-needed boost. It remains to be seen, however, how this funding will be spent. With many local authorities struggling with substantial high needs deficits, it is likely that a significant portion will go towards reducing these deficits rather than into frontline delivery. While addressing local authority budgetary pressures is essential, it is equally important that specialist further education colleges receive a fair allocation of the spending. These colleges provide essential support to young people with complex needs and without direct commitment to frontline funding, there is a risk that the government’s investment will not have any direct impact on young people’s education and support.
VAT and specialist colleges
The introduction of VAT on private school fees is confusing for specialist colleges, with some specialist colleges in-scope for the policy, whilst others are not. Whilst it is unfortunate that some specialist FE colleges will now be treated differently from all other provider types in the FE and skills sector, we welcome the news that specialist colleges can still claim business relief rates and that those in scope for the new VAT policy will now also be able to reclaim input VAT. As this policy is introduced, it’s essential that the inclusion of specialist colleges does not adversely impact provision for students with EHCPs. We are concerned that the administrative demands of implementing VAT on fees could significantly impact specialist colleges, and we will collaborate with the government to find ways to reduce this burden. Natspec will provide support for members to help them register for VAT and understand their new responsibilities.
Capital funding
The announcement of £6.7 billion in capital funding is an essential step toward addressing aging facilities across the education sector. However, previous methods of allocating capital funding have largely excluded specialist colleges. There has been no dedicated capital funding stream for specialist colleges since 2013, leaving many with limited resources to maintain or upgrade their facilities. We urge the government to ensure that this uplift in capital funding is inclusive of specialist colleges to allow them to provide safe, modern and accessible environments in which they can continue delivering high-quality education and support.
Employer national insurance contributions
Finally, the increase in national insurance contributions for employers is of concern for specialist colleges. Specialist colleges have estimated that this could increase employer costs by up to £900 per employee per year creating a significant financial burden for specialist FE colleges, given their high staff to student ratios. This is particularly troubling in a sector where recruitment and retention are already major challenges. We urge the government to include publicly funded specialist FE colleges within compensation plans to ensure that they are not unfairly disadvantaged, and they can continue to attract and retain the skilled staff needed to support young people with SEND.
We welcome the injection of much-needed funding for SEND and FE, reflecting the government’s priority to address critical issues in these sectors. It is essential, however, that it is allocated fairly and effectively – which means ensuring some of it finds its way to specialist colleges. To make a real impact, this funding must reach the frontline of specialist education, where it can directly support students and colleges. This will be crucial if we are to achieve an inclusive FE system where all young people can have their needs met
Photo of Rachel Reeves used under a Creative Commons license, taken by HM Treasury.