North Yorkshire Council
Executive
17th February 2026
DfE Capital Proposal
Report of the Corporate Director Children and Young Peoples Services
1.0 PURPOSE OF REPORT (MANDATORY)
1.1 The purpose of this report is to set out the proposal presented to the council by the DfE offering a grant of £5.6m as an alternative to the delivery of the proposed special school in Northallerton
1.2 The report sets out the key benefits and risks with both options available and proposes to request that the DfE continue to deliver the school.
2.0 SUMMARY
2.1 In October 2022 the council submitted a bid to the Department for Education for a Special
School for children with Social, Emotional and Mental Health needs to be built in Northallerton.
At the time of the bid this school was considered to be the council’s second most pressing SEN provision need.
2.2 The bid for the school was predicated on there being a growing reliance on high cost Independent Special School places, significant travel distances for children to access other maintained or academy special schools, increasing numbers of children with Education, Health and Care plans and North Yorkshire’s historically low numbers of special school places per head of population.
2.3 The DfE have provided North Yorkshire Council with an option to accept a capital grant of £5.6m to assist the council in providing specialist places. However, this would be in place of delivering the proposed 120 place SEMH special school at the former Northallerton School site on Grammar School Lane.
2.4 As things stand the fundamental reasons upon which the bid was submitted remain as they were with continued growth in EHCP’s increasing from c. 4200 in June 2022 to c.6400 in Jan 2026. This growth continues to place greater demand on the council’s duty to provide sufficient specialist places.
2.5 The option to continue with the delivery of the school is supported by the previously forecast growth in demand materialising as expected under the existing SEND system. The needs profile and location were carefully considered and decided upon as it would assist the council in providing high quality provision for children in the north of the county, reduce the council’s reliance on Independent Special Schools and reduce travel time and costs.
3.0 BACKGROUND
3.1 In October 2022 the bid for the school was predicated on there being a growing reliance on high cost Independent Special School places, significant travel distances for children to access other maintained or academy special schools, increasing numbers of children with Education, Health and Care plans and North Yorkshire’s historically low numbers of special school places per head of population.
3.2 The local context of the proposed school Hambleton and Richmondshire has a school population of 17,373 children. Of that 15.8% are presently identified as having Special Educational Needs at SEN Support level within mainstream schools. This is above the most recent national average figure of 14.2% relating to January 2025. A further 3% have an Education, Health and Care plan.
3.3 In 2024/25 there were 41 permanent exclusions of children from schools and academies in the Hambleton and Richmondshire locality, which was the highest across North Yorkshire.
3.4 Presently there remains a reliance on high-cost Independent Special School places and children travelling significant distance to Forest Moor School to access a special school for children with SEMH needs. The council currently commissions 18 Independent Special School places for children with a primary need of SEMH and 29 places at Forest Moor are utilised by children with a postcode from the Hambleton and Richmondshire locality.
3.5 Significantly, there has for some time now been expectation that central government will announce significant reforms to the SEND system. It is understood this will be published in the coming weeks and is likely to be subject to a period of public consultation. Indications are that the reforms have potential to reshape the system. Whilst the detail of reforms remains unconfirmed, the clear message from ministers has been to highlight the benefit of creating specialist places within mainstream schools and that their vision will be to create a better support system in mainstream schools so that reliance and demand for special schools reduces over time.
4.0 THE SUBSTANTIVE ISSUE
4.1 During 2025, alongside the development of the SEND reforms, the Department for Education undertook a review of all schools agreed under previous free school waves and reconsidered the requirement and deliverability of each. On 11th December the Council were informed by the DfE that following their review of the schemes an announcement was to be made that would allow some local authorities to choose to opt for a capital settlement in place of the new special school or request that the DfE proceed with the original proposed school.
4.4 The DfE have provided North Yorkshire Council with an option to accept a capital grant of £5.6m to assist the council in providing specialist places. However, this would be in place of delivering the proposed 120 place SEMH special school at the former Northallerton School site on Grammar School Lane. Whilst the cost of delivering a 120-place special school is not known it is deemed that the capital grant offered is considerably less than the expected cost of building the school.
4.5 The original bid was made on the basis that North Yorkshire, like all local authority areas, had seen a surge in EHCPs and demand for special school places had increased rapidly. This coupled with historically low numbers of special places per head of population and a growing reliance upon high-cost Independent Special Schools evidenced that at the time of the bid, and with no real prospect of system reform happening at that point, the school was needed.
4.6 To date special school places in North Yorkshire have been expanded from c.820 in 2017/18 to a proposed 1466 from September 2026. The equates to an increase of 79% in 8 years. In additional to these special school places are the 180 created via a special school in Harrogate for children with autism and the DfE scheme to deliver a new special school in Osgodby, Selby.
4.7 As things stand the fundamental data upon which the bid was submitted remain as it was with continued growth in EHCPs increasing from c. 4200 in June 2022 to c.6400 in Jan 2026. This growth continues to place greater demand on the council’s duty to provide sufficient specialist places.
4.8 It is expected that in early 2026 the DfE will be announcing their intentions with regards to SEND system reforms and these are expected to be substantial and with a clear focus on children with additional needs being supported in mainstream schools. At this stage the council does not have sufficient detail regarding the extent of the reforms to make a fully informed assessment of their impact on future demand for specialist places. Therefore, the DfE’s request to make this decision at this time is challenging and both options present varying degrees of risk and potential benefits.
4.9 The option to continue with the delivery of the school is supported by the previously forecast growth in demand materialising as expected under the existing SEND system. The needs profile and location were carefully considered and decided upon as it would assist the council in providing high quality provision for children in the north of the county, reduce the council’s reliance on Independent Special Schools and reduce travel time and costs. The original bid is included in appendix A.
4.10 Delivery of the special school would also be project-managed by the DfE with some additional resource or capacity required from the council that has already been anticipated. Anticipated resources include capital funding for any site abnormalities as well as support from some services such as Legal, Strategic Planning and Property Services. It is anticipated that demolition of existing building will be a cost to the council regardless of whether or not the school is delivered
4.11 Without fully understanding the proposed reforms, there is also general sentiment within the locality from schools and parents that a special school continues to be required.
4.12 The proposal of moving forward as originally planned and seeking for the DfE to provide the new school also contains risk. This includes limiting our existing capital programme to pre-existing grants with no confirmed future round of High Needs Provision Capital Allocation. This may limit our ambition with regards to rolling out other targeted and specialist provision.
4.13 The Council would also be exposed to risks associated with DfE decision making as the design and delivery of the school progresses. Specifically, at some stage throughout this process it could be possible that the DfE deem the scheme to no longer represent value for money and if the SEND reforms do gain significant traction, future demand for places may not be deemed to represent good value for money.
4.14 Having considered the various implications of either accepting the £5.6m grant or proceeding with the school it is recommended that Executive note this report and provide approval to proceed as initially planned and request the DfE continue with the building of the school as soon as possible.
5.0 CONTRIBUTION TO COUNCIL PRIORITIES
5.1 The council has a duty to ensure sufficient capacity of specialist places for children with SEND. These can take the form of special school places as well as places in mainstream setting via SEN resource bases, known locally as Targeted Mainstream Provision or SEN Units in mainstream schools.
5.2 The original proposal to deliver the special school was assessed as the second most important strand of the SEND Capital programme for the reasons set out in section 4.2. This contributes to the council’s priorities in creating specialist places for children closer to their home than presently exists and ensuring a high-quality education can be accessed within their community.
5.3 Local provision will also reduce distances children need to travel and therefore should have a positive effect over time on the avoiding costs within the Home to School Transport budget.
5.4 Creating new provision for children with identified SEMH needs will also contribute to other priorities including supporting children’s outcomes through high quality teaching and support
6.0 ALTERNATIVE OPTIONS CONSIDERED
6.1 The alternative option available to the council is to accept the £5.6m capital grant and forgo the delivery of the special school. This option would also present both potential benefits and risks.
6.2 Accepting the grant would provide additional flexibility to the council in providing specialist places. Combined with existing capital grants it would allow the council to be more ambitious with the roll out of mainstream SEN Resource Bases known locally as Targeted Mainstream Provisions and potentially create an opportunity to work with special schools and/or academy trust to provide smaller satellites of special schools.
6.3 High Needs Provision Capital Allocation guidance released in 2025 by the DfE has a strong steer towards local authorities using high needs capital to support mainstream schools in meeting the needs of children with SEND. It states “Whilst local authorities can determine how best to spend this funding to address local priorities, we want to work alongside them to achieve our shared ambition for better outcomes, better experiences for children and young people and their families, and a financially sustainable system” This is then followed by “We encourage local authorities to use this funding to set up resourced provisions or special educational needs units (SEN units) in mainstream schools to increase local capacity”
6.4 The combination of the wording in the latest HNPCA guidance and the general understanding that reforms are likely to focus on strengthening the mainstream school offer support this alternative option to accept the grant. However, the detail of the reforms has not yet been fully announced nor the timeline, and therefore it is not possible to assess what impact they will have within the system at this stage on lessening the demand for special school places.
6.5 The council have been informed that the grant on offer will not affect any future capital allocations for high needs provision and accepting it would also remove any risk of DfE decision making and value for money judgments which could ultimately see the school not being delivered.
6.6 Another benefit to the council would be that taking the grant would release the site to the council for alternative use in the future.
6.7 Whilst there are positive aspects to accepting the grant there are also identified risks which have led to the proposal to move ahead with the originally planned school. Thes risks include:
· SEND reforms are not yet fully understood and the timeline for implementation will not be immediate.
· Accepting the grant and expanding the roll out of other provisions will require additional capacity from the council in order to deliver any subsequent schemes
· There are limited options to expand existing special school provision, and the grant is not sufficient to provide new special school facilities
· Use of high-cost independent school places are unlikely to reduce in the near future
· At present, due to the timeline given by the DfE, alternative options have only been able to be evaluated at a high level
6.8 Within the current capital programme the council has £6.9m still to be allocated. This will be the subject of a subsequent report to the Executive, following the conclusion of this matter. This allocation will continue to allow the council to deliver additional resource bases. Any future, as yet unconfirmed, HNPCA allocations would also allow the council to be more ambitious with regards to delivering more specialist places.
7.0 IMPACT ON OTHER SERVICES/ORGANISATIONS
7.1 The proposal to continue with the building of the free school would have some implications for other services. There will be a requirement for Legal, Strategic Planning, Property and Education and Inclusion services to work with the DfE on revised timelines. This support was anticipated at the time of the bid, however resource allocation required from each is not yet known.
8.0 FINANCIAL IMPLICATIONS
8.1 There is currently £6.9m of unallocated resource within the existing SEND Capital Programme. This will be the subject of a further report to Executive following the decision to either accept the additional grant from the DfE or continue with the build of the special school.
8.2 It is anticipated, but not confirmed, additional HNPCA will be made available to the Council from the DfE. If this were to be a similar amount to the 2025/26 grant of £6.75m it would give the council c.£13.6m to allocate to other aspects of the SEND capital programme including a more ambitious roll out of TMPs or similar provision. The assumption of future HNPC allocations presents some risk, as the figure could vary from the estimation.
8.3 The alternative option of accepting the grant from the DfE of £5.6m and not proceeding with the school, could mean the council have available capital funding of c.£19.2m, making the same assumptions as set out in 9.2. Should no further allocation be forthcoming from the DfE in 2026/27 the worst-case scenario would be that the council have £12.5m to support the implementation of future reforms.
8.4 The delivery of the school is part of the councils planned mitigations within the High Needs Transformation Programme as set out below. However, the assumed opening date of September 2028 is likely to be at risk given the DfE will need to revise their timelines should the proposal to proceed be approved.
|
Academic Year |
|
|
|
|
|
|
|
Opening |
28/29 |
29/30 |
30/31 |
Total |
|
Grammar School Lane Sep 28 |
Sep-28 |
|
|
|
|
|
Places |
|
40 |
80 |
120 |
|
|
Savings (£) |
|
1,139,713 |
2,362,856 |
3,673,451 |
7,176,020 |
|
|
|
|
|
|
|
|
Financial Year |
|
|
|
|
|
|
|
Opening |
28/29 |
29/30 |
30/31 |
Total |
|
Grammar School Lane |
Sep-28 |
664,833 |
1,853,213 |
3,127,370 |
5,645,416 |
9.0 LEGAL IMPLICATIONS
9.1 The Council has statutory duty to keep education and care provision under review pursuant to section 27 Children & Families Act 2014. The considerations that went into the bid to DfE for the special school were part of fulfilling this duty. The Council has statutory duties to ensure that it secures the special educational provision contained within individual pupils Education, Health & Care Plans. The demand for which has led to the bid in order to prevent the high reliance upon the independent special school sector. The recommendations within this report ensure that the Council’s legal duties are met.
10.0 EQUALITIES IMPLICATIONS
10.1 The Council envisages that equalities impact will be positive in providing new specialist places at the special school for children with SEND. Equalities impact has ben screened and is available in appendix B.
11.0 CLIMATE CHANGE IMPLICATIONS
11.1 The ability to assess the climate change implications for this proposal are limited. Essentially the decision on whether to move forward with the school or accept the grant will have separate implications. The ambition of both would be that the council are providing more local provision options and therefore reducing journey time and travel in vehicles. The new school would see an increase to the school estate, adding a new school site and premises with increased energy requirements. A decision to take the grant could mean that specialist places could be developed in existing schools within their existing capacity and similar levels of energy usage. However, the proposal to build the school would be subject to planning approval and with the usual assessment of environmental and ecological impacts. A climate impact screening is available in appendix C.
12.0 REASONS FOR RECOMMENDATIONS
12.1 The reasons for the recommendation are that on balance and consideration of all the benefits and risks set out in section 4 and 6 the special school will add a significant resource to the local educational offer.
12.2 Whilst there are benefits and risks to either option the council already has some resource available to it to increase SEN resource base capacity alongside the DfE delivering the school. Taking the grant does provide further capital resource, though presently it is not known what the timeline or traction will be for future reforms of the system and the impact on demand for special school places.
12.3 The Council can continue to roll out specialist places in mainstream schools with the resources already available. It is assumed further allocations will be forthcoming, however, the risk being that further HNPC allocations are reduced which would restrict the numbers that can be created.
|
13.0 |
RECOMMENDATION(S)
|
|
|
It is recommended that the Executive gives approval for: · The grant to be declined at this time · Officers to request the DfE proceed with the delivery of the special school in Northallerton · Officers to inform the DfE that the council remains open to further dialogue on this issue once the full detail of national reforms are known and understood
|
APPENDICES:
Appendix A – Special Free School Bid
Appendix B – EIA
Appendix C – CCIA
BACKGROUND DOCUMENTS:
Previous approval to bid for the school
Agenda for Executive on Tuesday, 20 September 2022, 11.00 am | North Yorkshire Council
El Mayhew
Corporate Director – Children and Young Peoples Services
County Hall
Northallerton
9 February 2026
Report Author – Chris Reynolds
Presenter of Report – Amanda Fielding AD Education and Inclusion and Chris Reynolds, Head of SEND and Resources
Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.
PLEASE ALSO NOTE THAT IF ANY REPORTS / APPENDICES INCLUDE SIGNATURES THESE MUST BE REMOVED / DELETED PRIOR TO SENDING REPORTS / APPENDICES TO DEMOCRATIC SERVICES. Appendices should include an Equality Impact Assessment and a Climate Impact Assessment where appropriate