How EHCPs are actually funded — the £25k-per-child explainer

You will rarely see a council volunteer a breakdown of how an EHCP is funded — but the system is actually structured around a single national model with three named "elements". Once you understand the stack, you can read your own Section F as a costed line item and tell whether the LA is genuinely funding what it says it will deliver.

The three-element funding stack

The Department for Education's 2013 funding reform split school SEND funding into three layered sources. Every English maintained school works to the same structure, and every EHCP top-up sits on top of it:

• Element 1 — Age-Weighted Pupil Unit (AWPU). The school's basic per-pupil grant for every child it educates, around £4,000–£6,000 per pupil. EHCP or not, every child gets this.
• Element 2 — Notional SEND budget. The first ~£6,000 of any individual child's additional SEND costs comes from the school's own SEND allocation. This is the "delegated SEND funding" schools are expected to draw on for SEN Support pupils and the first slice of any EHCP. Combined with Element 1, the school is expected to fund roughly the first £10,000 of any high-needs child's provision from its own resources before the LA gets involved.
• Element 3 — Local Authority top-up. Everything above the ~£10,000 threshold is paid by the LA on a per-child basis, drawn from the High Needs Block. This is what appears in the council's "EHCP provision spend" line item, and what funds the costed provision in Section F of an EHCP.

Banding — how the LA decides the top-up amount

Most LAs operate a banding matrix (typical names: Band 1–6, Band A–F, or a points system). When an EHCP is finalised, the SEND team scores the Section F provision against the matrix and assigns a band. Each band has a fixed Element 3 value attached. Indicative ranges, though they vary by LA:

• Low / Band 1: £4,000–£8,000 top-up. Light-touch in-class support, occasional small-group intervention.
• Medium / Bands 2–3: £10,000–£20,000. Regular 1:1 TA time, weekly therapy input, modified curriculum.
• High / Bands 4–5: £20,000–£35,000. Full-time 1:1 TA, daily therapy sessions, significant adaptations.
• Exceptional / Band 6+: £35,000–£60,000. Often the trigger for the LA to consider a special-school placement instead.

That banding system is what produces the £18,662 average per EHCP at Sutton (and the £8,863 at Walsall, and the figures every other council reports). Most EHCPs sit in lower-medium bands; a smaller number sit in the high bands; the mean lands in the middle of the range. If your child's needs sit clearly in a higher band than the LA has assigned, that's an appealable point on its own.

What's bundled into "EHCP provision spend"

The Element 3 top-up is the biggest component of the headline figure councils publish, but most also include several centrally-commissioned costs in the same line item:

• Educational Psychology service — the statutory EP advice required under Reg 6(1)(d) for every needs assessment.
• Therapies — speech and language (SALT), occupational therapy (OT), and physiotherapy where commissioned by the LA rather than the local NHS trust.
• Mental health support — CAMHS interface, school-based counselling, emotion-regulation interventions.
• SEND transport — school taxis and minibuses where home-to-school distance or need justifies them. Often a large standalone sub-total.
• Direct payments — under s.49 of the Children and Families Act 2014, families can request a personal budget that hands part of the Element 3 money to the parent to commission their own provision (a private SALT, an autism-focused tutor, sensory equipment).

Why NMI placements are tracked separately — and cost 2× more

Independent and non-maintained special school placements ("NMI placements") are not funded through the three-element model. They sit outside it entirely, which is why every council reports them as a separate line in its budget.

• Funding flow. The LA pays the independent school directly under a contract negotiated for each child. The school's fee is all-in — staffing, therapies, residential costs (where applicable), profit margin for the operator. There is no Element 2 deduction; the school does not receive AWPU from the LA in the way maintained schools do.
• Staffing ratios. NMI special schools typically run with 1:3 to 1:6 staff-to-pupil ratios versus 1:10 to 1:15 in mainstream. The extra staff drive most of the unit-cost difference.
• On-site therapy. Most NMI placements include in-house SALT, OT and EP rather than referring out — the cost lands in the fee rather than in the LA's commissioned-services line.
• Operator margin. A large share of NMI providers are profit-making private companies (some private-equity owned). Margins typically run 8–15% of the fee. Maintained special schools do not have this layer.
• Residential supplements. Where a placement is residential, the fee jumps from ~£50k–£70k day-only to £80k–£120k+ all-in.

The headline cost comparison parents need to know:

• EHCP in a maintained mainstream school: ~£10k (Elements 1+2 from the school) + ~£18k (LA Element 3 top-up) = ~£28k/year all-in.
• EHCP in a maintained special school: ~£10k base + ~£20k–£30k top-up = ~£30k–£40k/year.
• EHCP at an NMI day placement: ~£50k–£70k/year, paid directly by the LA to the independent school.
• EHCP at an NMI residential placement: ~£80k–£150k/year, sometimes more for complex cases.

That 2–3× cost gap is the single biggest reason an LA will resist naming an NMI placement in Section I. When parents push the issue to Tribunal and the LA concedes, the council later reports that placement under its NMI line rather than its EHCP-provision line — which is why councils that concede a lot of placements (Walsall conceded 41 in 2025) also report rapidly-rising NMI totals.

Where the money comes from — the High Needs Block

Element 3 top-ups, commissioned therapies, NMI placements and SEND transport are all paid from the same central pot: the High Needs Block (HNB) of the Dedicated Schools Grant. The DfE allocates the HNB to each LA annually using a national funding formula based on population, deprivation, prior-attainment indicators, and historical spend.

The national HNB was around £10.5 billion in 2023/24, rising to £11.9 billion in 2025/26. That sounds like a lot until you compare it to demand: EHCPs grew from 354,000 (Jan 2020) to 638,745 (Jan 2025), an 80% rise in five years, while HNB rose around 35% in the same period. The gap shows up as cumulative LA deficits, currently around £3 billion across England, masked for now by a DfE "statutory override" that lets councils carry these deficits off-balance-sheet. The override expires in March 2028 — which is why every responding council is showing the same direction of travel on cease-to-maintain decisions and NMI scrutiny. They are bracing for the deficits to come back on-book.

Three things parents can use this for

The funding stack matters at three concrete moments in an EHCP case:

• When the LA proposes a band lower than the provision warrants. If Section F includes (for example) a full-time 1:1 TA plus weekly SALT and OT, the cost to deliver is > £25k a year. If the LA has banded it at Band 2 (typically £15k), the gap is concrete and challengeable. Ask the LA for the costed breakdown — they have it.
• When Section F is "specific" on paper but cheap to deliver. Vague phrasing ("regular small-group intervention", "as appropriate to need") often signals provision engineered to fit a low band. Each numbered item in Section F should be specific enough that you can attach a £ figure to it.
• When you are considering a personal budget. Section 49 of the Children and Families Act 2014 gives you the right to request one. If approved, the LA hands you part of the Element 3 funding directly to commission provision yourself. Councils don't volunteer this — but the FOI data shows requests are climbing fast (Sutton: 1 → 7 in two years, total value rose 280×).