Every funding system creates incentives for some individuals to behave in particular ways, and systems for financing Special Educational Needs (SEN) are no different. In this short note, we examine the incentives that systems for financing special educational needs can create for different individuals.

We begin with a general overview of the incentives (financial and non financial) and motivations that could exist for parents, schools and local authorities. We then examine how a series of different funding systems currently in use across England can alter these incentives, each with an example case study. In particular, we look at the most common current model (defined below) with the example of Essex, a system of banded funding with the example of Durham, a model where funds are delegated to schools with the example of Newham, and a hybrid system with the example of Surrey. In the last section, we list a number of other systems used by other countries, and the different incentives they create.

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