QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MRS JUSTICE MCGOWAN
| The QUEEN
on the application of
KIAN HOLLOW (by his mother and litigation friend Alicia McColl) and others
- and –
|SURREY COUNTY COUNCIL
Mr Jonathan Moffett QC and Mr Michael Lee (instructed by Surrey County Council Legal Services) for the Respondent
Hearing dates : 2-3 October 2018
Crown Copyright ©
Lady Justice Sharp:
The claimants' evidence
The Council's evidence
i) Jul-Mar 2017 The Council and the Cabinet discussed the pressures on the Council's delivery of SEND services, existing deficiencies in that provision (such as those identified by Ofsted in 2016), and the challenge faced in making the necessary savings in the delivery of that provision;
ii) Oct-Nov 2017 The Cabinet discussed potential savings that could be made in its provision of SEND services, the challenge involved in making such savings, and the possible impact of such savings;
iii) 30 Jan 2018 The Cabinet considered a report from the Leader of the Council for the purpose of making recommendations to the full Council in respect of the Council's gross revenue expenditure budget for the 2018-2019 financial year and the council tax precept that should be set for the same year. The Cabinet resolved to make various recommendations to the full Council, including a recommendation that it approve a gross revenue expenditure budget for 2018-2019 of £1,705,000,000;
iv) 6 Feb 2018 The full Council met to consider a report from the Leader asking it to approve the Council's gross revenue expenditure budget for the 2018-2019 financial year and the council tax precept. The full Council resolved to approve the recommendations made by the Cabinet and it set the Council's gross revenue expenditure budget for the 2018-2019 financial year at £1,705,000,000 and set the council tax precept for the same financial year;
v) 27 Mar 2018 The Cabinet considered a further report from the Leader recommending that it approve the 2018-2019 Budget and indicative budgets for the years 2019-2020 and 2020-2021 as set out in the then draft MTFP 2018-2021 that was appended to the report. An equalities impact analysis was also appended to the report (the EIA). The Cabinet Member for Education, Mary Lewis, addressed the cabinet orally at this meeting. The Cabinet approved the detailed service revenue and capital budgets for the 2018-2019 financial year.
i) In June 2017 it became apparent that £25,000,000 of the savings projected for the 2017-2018 financial year would not in fact be made, and that there were other rising budget pressures. A budget gap of £25,000,000 in the 2017-2018 financial year was primarily attributable to overspending in the areas of adult social care (ASC), children's social care (CSC) and SEND. This overspend was offset by under-spending in other areas: the overspend in SEND services was funded by the Dedicated Schools Grant (DSG) of £9.3 million, and was ultimately carried forward to the 2018-2019 financial year;
ii) Following discussions at the Schools Forum after the end of the 2017-2018 financial year, there was agreement in principle that the overspend would be funded by the underspend on the schools and early years blocks of the DSG;
iii) When the budget for the 2018-2019 financial year was set, there was an identified budget gap of £56,000,000 between the Council's projected income and its projected expenditure. The Council is part of the Business Rates Pilot Scheme and this generated a one-off income of £20,000,000, thereby reducing the budget gap to £36,000,000. This gap has been further reduced by using £21,000,000 from the Council's reserves, with a further £15,000,000 raised through the flexible use of capital receipts, in order to balance the Council's budget.
i) The Cabinet approves a draft budget, which it recommends to the full Council;
ii) The full Council approves the Council's gross revenue expenditure in order to set the Council's council tax precept. The setting of the council tax precept is a function of the full Council;
iii) The Cabinet then approves a final budget in the light of the Council's decision.
"Whilst the Council hopes and expects that it will be able to make the savings identified in those budgets, the budgets for each service area, and for specific heads of expenditure within those areas, are not set in stone. They are, in effect, funding envelopes in relation to which there is flexibility if the savings identified cannot be achieved. The budgets are not an absolute cap on what will be spent by a certain service area, or on specific head of expenditure within that area.
..Indeed, sometimes it transpires that certain savings cannot be made. For example, the monthly budget monitoring report for the month to 28 February 2018 recorded that £16,000,000 of the savings identified for the 2017-2018 financial year had proved to be unachievable…and I have already referred to previous overspends in relation to SEND services.
…It is important to note that the fact that an overspend occurs in relation to a particular service area does not result in the "tap being turned off" for that service area: the various service area budgets do not operate like a notional bank account whereby, once the allocated sums have been exhausted, no more money can be spent. On the contrary, the relevant service will continue and means of addressing the overspend (such as carrying it forward into the next financial year) will be found."
In relation to the full Council's decision on 6 February 2018, Mr Kilburn further says as follows:
"…Ms Little reported to members that local government as a whole was under significant pressure, with increasing demand and significant funding pressures. She noted that councils and public services of the future need to shift towards a more place-based, outcome driven model, working together with residents to improve outcomes, managing demand more effectively, delivering infrastructure and generating new income sources to fund public services.
…Ms Little drew to the full Council's attention the fact that the financial situation it was considering at the time was a very serious one. She acknowledged that the Council had made significant efficiencies and cost reductions, but pointed out that more was required and the Council needed to further develop and implement service transformation on a bigger scale. She further explained that the challenge of managing spending pressures within budgets was as difficult as delivering service cost reductions and it was therefore essential that the Council continued to monitor both savings actions plans and the service pressures very closely throughout the 2018-2019 financial year.
…Ms Little concluded by drawing the Council's attention to the fact that the budget for 2018-2019 had been balanced only by the significant use of one-off funding and that this could not be repeated.
The Leader's report … acknowledged that the savings identified would not necessarily be achieved …explained that a risk rating had therefore been applied to each identified saving reflecting the likelihood of it being achieved… Specifically, in the SEND Budget, £19,001,000 of the £21,001,000 savings identified had been risk rated as "red" or "amber", meaning that there were severe or significant barriers to them being achieved …It acknowledged that there was a high degree of risk around all of the identified savings being achieved, and explained that in Ms Little's view the Council was likely to need to draw on its reserves or take some other alternative action …
…the Council hopes and expects to achieve the savings, but it would not be unprecedented for it not to do so, or for there to be an overspend on the budget for the 2018-2019 financial year generally, or on the budget for SEND services in particular. Indeed, as I have explained above, the Council has in the past overspent on its budget for SEND services. Such issues were in fact before the Cabinet at the 27 March 2018 meeting itself, when the monthly budget monitoring report was considered …"
i) In a statement to the full Council on 11 July 2017, Ms Lewis (the new Cabinet Member for Education) explained that in respect of SEND services the Council was a high spending authority with poor levels of parental satisfaction. Ms Lewis explained that the Council's mainstream schools needed to be more inclusive, and its special schools more flexible.
ii) In a statement to the full Council on 10 October 2017, Ms Lewis referred to the key weaknesses identified in the SEND local area inspection conducted by Ofsted. Ms Lewis explained that progress had been made in addressing those weaknesses This progress was confirmed by the Minister for Children and Families in his letter of 6 December 2017.
iii) In a statement to the full Council on 5 December 2017, Ms Lewis explained that for the following year, the Council was forecasting an overspend in the High Needs Block due to unprecedented increases in demand. She said that Council officers would work with schools to ensure that High Needs funding was sustainable, whilst continuing to secure improvements in the experience of children with SEND and their families.
iv) On 20 March 2018, Ms Lewis told the full Council in a statement that the Council had seen an increase of just under 20% in the number of children with EHCPs between 2016 and 2017, and at the same time the average High Needs Block funding per pupil had been reduced. Ms Lewis explained that managing the increase in demand and corresponding budget pressures represented a significant challenge for the Council.
i) First, there was not a particularly strong case to put to the Secretary of State. In particular, there were concerns that they could not demonstrate a sustainable plan for the long-term funding of SEND services from the High Needs Block, and that the transfer requested would therefore be seen as a means of seeking a regular top-up from the Schools Block, rather than as a temporary measure to assist the Council in transitioning to a more sustainable model for the provision of SEND services. This would have made the application a difficult one, as in accordance with paragraph 120 of the Education & Skills Funding Agency's Operational Guidance on Schools revenue funding 2018 to 2019, the Council would have had to provide evidence of such a sustainable plan as part of its application;
ii) Secondly, the Council required the support of the Schools Forum for other funding decisions that would need to be taken in the near future, and did not want to jeopardise those decisions by potentially damaging the Council's relationship with the Schools Forum.
i) Transition: improved planning of transition into adulthood. This would involve improving joint working with Adult Social Care services to ensure that there was a joint pathway for young persons transitioning into adulthood, with a focus on lifelong learning. If successful, such an approach should result in improved outcomes for young people with SEND transitioning into adulthood;
ii) Inclusion: increased inclusion of children with SEND within mainstream school settings. This would involve developing a strategy for local schools to become more inclusive, allowing children with SEND to attend local schools in a supported environment. Ms Mills discussed the fact that it was generally better for children to be educated alongside their local peers, as this can enable them to form friendships locally and to avoid the need for long journeys to school. Indeed, there is a statutory presumption that children with SEND should be educated in mainstream schools. However, she also pointed out that some children do require specialist schooling, and sometimes the appropriate provision can only be made at independent special schools;
iii) Market sustainability: ensuring key provision was available, cost effective, and well managed. Ms Mills explained that this would involve ensuring that the Council achieved best value when commissioning placements in independent special schools and ensuring that the Council had sufficient provision of its own to meet children's needs.
iv) Early years: identifying support required in a timely and targeted manner. She explained that this would involve identifying children with SEND earlier so as to enable early intervention.
v) Admissions: reviewing admissions agreements. This would involve changing the dates for admissions so as to ensure that Surrey children has a full opportunity to access Council provision, rather than have places in Council provisions first taken up by children from outside the County, as had been the case in the past.
"The Council's progress in making savings…
7. Throughout the 2018-2019 financial year work on the four areas of focus… has been ongoing. The Council's intention is to implement a programme of transformational change in the provision of SEND services in Surrey that will result in an improved service that is provided at lower cost. The programme will involve a focus on early intervention which, as Ms Ferris recognises in her second witness statement, has the potential to produce long-term cost savings whilst providing an improved service to children and their families.
8. The Council therefore remains hopeful that in due course it will be able to make significant savings to its expenditure on SEND services by implementing a programme of transformational changes. However, almost half of the financial years has now passed and, at this point in time, the Council has concluded that it will not be possible for it to implement such a programme of change during the current financial year. It has not been possible to identify sufficiently specific proposals early enough for them to be subject to an appropriate decision making process and then adopted during the current financial year.
9. As a result, for the 2018-2019 financial year the Council has continued, and will continue, to provide SEND services in the same way as it has done previously. No changes to services will be made during the present financial year as a result of any programme of transformational change, whether based upon the "Areas of Focus" in the SSEND Budget for the 2018-2019 financial year, or otherwise.
10. I explained …that the SSEND Budget is not set in stone, that there is always a real possibility of identified savings not being achieved, and that the Council's recent practice in such circumstances has been to carry forward the overspend into the following year's budget…as of June 2018 an overspend of £30,000,000 on High Needs Block SEND services was forecast for the 2018-2019 financial year. Despite efforts to manage increasing demands on services and increasing costs, as at 31 July 2018 the estimated overspend for the 2018-2019 financial year was around £15,000,000. A significant part of that estimated overspend is attributable to the fact that the Council has not yet implemented a programme of change based on the "Areas of Focus" identified in the SSEND Budget for the 2018-2019 financial year during the present financial year. The Council has therefore accepted that when a budget is set for the 2019-2020 financial year, an overspend of £15,000,000 in the SSEND Budget will have to be carried forward unless additional sources of funding for the 2019-2020 financial year are agreed following the Schools Funding Consultation referred to in paragraph 13 below.
11. In the meantime, work remains ongoing to introduce a programme of transformational change for the provision of SEND services in Surrey. However, the introduction of that programme, and any savings that it produces, will not fall to be considered when the Council produces a budget and MTFP for the 2019-2020 and subsequent financial years.
12. I explained …that if and when plans to achieve savings under the "Areas of Focus Heading" were identified, a full decision-making process would be followed in relation to them, including consultation where appropriate, consideration of any relevant considerations, and the completion of any necessary equalities impact assessments. As the Council's plans to implement a programme of transformational change develops, that process is now underway, but, as I explained above, the focus is now on the 2019-2020 financial year.
13. The Council's current transformation plan and the accompanying funding proposals are described in the "SEND Transformation Programme" and "Schools Funding" sections of a School's Funding Consultation paper... That paper was sent to Surrey Head teachers and governors on 5 September 2018. Consultees have been asked to provide their feedback on the plans by 25 September 2018.
14. The consultation paper explains that it forms an early part of a wider consultation process, which will include consultation with children and young people and their families, and which will inform the Cabinet's decision making in relation to the next MTFP. That process will involve a wide-ranging consultation with a range of different stakeholders, including children with SEND and their parents, focusing not only on financial priorities, but on the future provision of SEND services in Surrey as a whole. The Council's current intention is to begin a wider consultation and engagement on the proposals for a programme of transformational change towards the end of September/early October.
15. Part of the process will also include consultation on the draft MTFP for the 2019-2022 financial years (both in relation to the SSEND Budget and other areas of the Council's expenditure). That consultation is likely to take place towards the end of November/early December and will form part of the Council's "Vision for Surrey in 2030" programme…"
The case for the claimants
The case for the Council
50. What in fact has happened in this case is that the decision-maker has taken a preliminary decision in relation to its budget, fully aware that the implementation of proposed policies would be likely to have an impact on the affected users, in particular, disabled persons , but not committing itself to the implementation of specific policies with the budget framework until it had carried out a full and detailed assessment of the likely impact. In my view , there is nothing wrong in principle with such an approach and nothing inconsistent with the duties under the DDA…
52…in my view it was sensible, and lawful for the Defendant first to formulate its budget proposals and then, at the time of developing the policies that are under challenge, to consider the specific impact of proposed policies that might be implemented within the budgetary framework."
"A local authority shall keep under review the arrangements made by them for special educational provision and, in doing so, shall, to the extent necessary, consult the funding authority and the governing bodies of county, voluntary, maintained special and grant-maintained schools in their area."
"(1) A local education authority shall keep under review the arrangements made by them for special educational provision;
(2) In doing so, the authority shall, to the extent that it appears necessary, or desirable for the purpose of co-ordinating provision for children with special educational needs, consult the funding authority and the governing bodies of county, voluntary, maintained special and grant-maintained schools in their area."
27 Duty to keep education and care provision under review
(1) A local authority in England must keep under review—
(a) the educational provision, training provision and social care provision made in its area for children and young people who have special educational needs or a disability, and
(b) the educational provision, training provision and social care provision made outside its area for—(i) children and young people for whom it is responsible who have special educational needs, and(ii) children and young people in its area who have a disability.
(2) The authority must consider the extent to which the provision referred to in subsection (1)(a) and (b) is sufficient to meet the educational needs, training needs and social care needs of the children and young people concerned.
(3) In exercising its functions under this section, the authority must consult—
(a) children and young people in its area with special educational needs, and the parents of children in its area with special educational needs;
(b) children and young people in its area who have a disability, and the parents of children in its area who have a disability;
(c) the governing bodies of maintained schools and maintained nursery schools in its area;
(d) the proprietors of Academies in its area;
(e) the governing bodies, proprietors or principals of post-16 institutions in its area;
(f) the governing bodies of non-maintained special schools in its area;
(g) the advisory boards of children's centres in its area;
(h) the providers of relevant early years education in its area;(i) the governing bodies, proprietors or principals of other schools and post-16 institutions in England and Wales that the authority thinks are or are likely to be attended by—(i) children or young people for whom it is responsible, or(ii) children or young people in its area who have a disability;
(j) a youth offending team that the authority thinks has functions in relation to—(i) children or young people for whom it is responsible, or(ii) children or young people in its area who have a disability;(k) such other persons as the authority thinks appropriate.(4) Section 116B of the Local Government and Public Involvement in Health Act 2007 (duty to have regard to assessment of relevant needs and joint health and wellbeing strategy) applies in relation to functions exercisable under this section.(5) "Children's centre" has the meaning given by section 5A(4) of the Childcare Act 2006.
- Further, section 30 of the 2014 Act provides that:
30 SEN and disability local offer(1) A local authority in England must publish information about—(a) the provision within subsection (2) it expects to be available in its area at the time of publication for children and young people who have special educational needs or a disability, and(b) the provision within subsection (2) it expects to be available outside its area at that time for—(i) children and young people for whom it is responsible, and(ii) children and young people in its area who have a disability.
(2) The provision for children and young people referred to in subsection (1) is—
(a) education, health and care provision;
(b) other educational provision;
(c) other training provision;
(d) arrangements for travel to and from schools and post-16 institutions and places at which relevant early years education is provided;
(e) provision to assist in preparing children and young people for adulthood and independent living.
(3) For the purposes of subsection (2)(e), provision to assist in preparation for adulthood and independent living includes provision relating to—
(a) finding employment;
(b) obtaining accommodation;
(c) participation in society.
(4) Information required to be published by an authority under this section is to be known as its "SEN and disability local offer".
(5) A local authority must keep its SEN and disability local offer under review and may from time to time revise it.
(6) A local authority must from time to time publish—
(a) comments about its SEN and disability local offer it has received from or on behalf of—(i) children and young people with special educational needs, and the parents of children with special educational needs, and(ii) children and young people who have a disability, and the parents of children who have a disability, and
(b) the authority's response to those comments (including details of any action the authority intends to take).
(7) Comments published under subsection (6)(a) must be published in a form that does not enable the person making them to be identified.
(8) Regulations may make provision about—
(a) the information to be included in an authority's SEN and disability local offer;
(b) how an authority's SEN and disability local offer is to be published;
(c) who is to be consulted by an authority in preparing and reviewing its SEN and disability local offer;
(d) how an authority is to involve—(i) children and young people with special educational needs, and the parents of children with special educational needs, and(ii) children and young people who have a disability, and the parents of children who have a disability, in the preparation and review of its SEN and disability local offer;
(e)the publication of comments on the SEN and disability local offer, and the local authority's response, under subsection (6) (including circumstances in which comments are not required to be published).
(9)The regulations may in particular require an authority's SEN and disability local offer] to include—
(a) information about how to obtain an EHC needs assessment;
(b) information about other sources of information, advice and support for—(i) children and young people with special educational needs and those who care for them, and(ii) children and young people who have a disability and those who care for them;
(c) information about gaining access to provision additional to, or different from, the provision mentioned in subsection (2);
(d) information about how to make a complaint about provision mentioned in subsection (2).
15. Part 3 of the Act contains provisions following the Green Paper Support and Aspiration: A new approach to special educational needs and disability published by the Department for Education on 18 March 2011 and the follow up Progress and Next Steps published 15 May 2012.
16. The provisions are a major reform of the present statutory framework for identifying children and young people with special educational needs (SEN), assessing their needs and making provision for them. They require local authorities to keep local provision for children and young people with SEN and disabilities under review, to co-operate with their partners to plan and commission provision for those children and young people and publish clear information on services they expect to be available. The provisions set out the statutory framework for identifying, and assessing the needs of, children and young people with SEN who require support beyond that which is normally available. Statements made under section 324 of the Education Act 1996 and Learning Difficulty Assessments made under section 139A of the Learning and Skills Act 2000 are replaced by new 0-25 Education, Health and Care plans (EHC plans) for both children and young people. The provisions place a new requirement on health commissioners to deliver the health care services specified in plans.
'Duty to keep education and care provision under review
186. This section requires local authorities in England to keep under review the educational and training provision and social care provision made in their area for children and young people with special educational needs or disabilities and the provision made outside their area for children and young people with special educational needs for whom they are responsible and for those with disabilities.
187. Local authorities must consider the extent of provision and whether it is sufficient to meet children and young people's educational needs, training needs and social care needs. This complements the local authority's duties under section 14 and section 15ZA of the Education Act 1996 to secure sufficient schools and suitable education and training for young people.
188. When keeping their provision under review local authorities are required to consult with children and young people with special educational needs and disabilities, parents of children with special educational needs and disabilities, the bodies named in subsection (3) of the section and any other such people as the local authority thinks appropriate.
189. In carrying out their duties under this section local authorities must have regard to the relevant Joint Strategic Needs Assessment and Health and Well-being Strategy.
190. This section replaces section 315 of the Education Act 1996 in England and will operate alongside section 26 on joint commissioning to provide the local authority with relevant information with which to prepare the local offer."
"The local authority must review its educational, training and social care provision, consulting a range of partners, including children and young people with SEN or disabilities and their parents and carers. This consultation will inform the development and review of the Local Offer (Section 27 of the Children and Families Act 2014)."
And para 3.19 states that:
"Local authorities must review their provision, taking into consideration the experiences of children, young people and families (including through representative groups such as Parent Carer Forums), voluntary and community sector providers and local Healthwatch. Information from such reviews will contribute to future arrangements and the effectiveness of local joint working."
What is the Local Offer?
4.1 Local authorities must publish a Local Offer, setting out in one place information about provision they expect to be available across education, health and social care for children and young people in their area who have SEN or are disabled, including those who do not have Education, Health and Care (EHC) plans. In setting out what they 'expect to be available', local authorities should include provision which they believe will actually be available.
4.2 The Local Offer has two key purposes:
• To provide clear, comprehensive, accessible and up-to-date information about the available provision and how to access it, and
• To make provision more responsive to local needs and aspirations by directly involving disabled children and those with SEN and their parents, and disabled young people and those with SEN, and service providers in its development and review
4.3 The Local Offer should not simply be a directory of existing services. Its success depends as much upon full engagement with children, young people and their parents as on the information it contains. The process of developing the Local Offer will help local authorities and their health partners to improve provision.
4.4 The Local Offer must include provision in the local authority's area. It must also include provision outside the local area that the local authority expects is likely to be used by children and young people with SEN for whom they are responsible and disabled children and young people. This could, for example, be provision in a further education college in a neighbouring area or support services for children and young people with particular types of SEN that are provided jointly by local authorities. It should include relevant regional and national specialist provision, such as provision for children and young people with low-incidence and more complex SEN.
"4.18 The requirement on local authorities to publish comments on their Local Offer and their response to those comments is relevant to their duty to keep under review the educational and training provision and social care provision for children and young people with SEN or disabilities and their role in contributing, with their partner CCGs, to Joint Strategic Needs Assessments and the development of local Health and Wellbeing Strategies (see chapter 3).
4.19 Local authorities must keep their educational and training provision and social care provision under review and this includes the sufficiency of that provision. When considering any reorganisation of SEN provision decision makers must make clear how they are satisfied that the proposed alternative arrangements are likely to lead to improvements in the standard, quality and/or range of educational provision for children with SEN (School organisation (maintained schools), Annex B: Guidance for Decision-makers, DfE 2014 – see the References section under Chapter 4 for a link).
4.20 Local authorities should link reviews of education, health and social care provision to the development and review of their Local Offer and the action they intend to take in response to comments. This will help to identify gaps in provision and ensure that the Local Offer is responsive to the needs of local children and young people and their families. At a strategic level local authorities should share what they have learned from the comments they receive with local Health and Wellbeing Boards where appropriate, to help inform the development of Health and Wellbeing Strategies and the future provision of services for children and young people with or without EHC plans."
Note 1 The evidence is that in respect of some of the line items, the savings identified are those which are expected to flow from past decisions of the Council, which were “impact assessed” and consulted on at the time, which have not been challenged, and some of which have been implemented. [Back]
Note 1 The evidence is that in respect of some of the line items, the savings identified are those which are expected to flow from past decisions of the Council, which were “impact assessed” and consulted on at the time, which have not been challenged, and some of which have been implemented. [Back]