I think this is the government doc
The intention as I understand it is to make it easier for parents to exercise a preference for a special school or an out of area school. LAs will often say as they fund their own schools already placing an individual child there is a 'nil cost' to them and so if a parent asks to go out of area they say that is an unreasonable use of funds - even to another mainstream school. The new formula intends to allocate a 'cost' to every place and so remove this argument.
A special school place will be £10,000 minimum cost to LA - some children / places will cost more. This means if your local special school costs £10k per place and the one in the next authority costs £10k per place you can choose either and the LA cannot argue the one over the border is costing £10k extra.
Mainstream schools have to put in £6000 per SN child on top of the £4,000 place cost for every child (with or without SN - called the AWPU). So the cost of placing a child with high needs in mainstream will be minimum £10k - the same as the special school. This stops LAs saying that placing a child in mainstream is nil cost.
Schools get the money through delegated funds as they always have - calculated on deprivation index - so they do not have to find an extra £6000 - the government wants all LAs to delegate funds up to £6000 for SN (+£4000 AWPU). This is to remove the situation where some LAs delegate highly eg schools have to put in first 20 hours of TA time) and others less (5-10 hours of TA time). This is because there have been legal cases where LAs argued the funds they had delegated to a school did not count when a mainstream placement was being compared to a specialist placement or when deciding whether to give a statement (so children in areas where lots of funds were delegated were far less likely to get a statement)
So in effect this is just a formula to recognise that placing SN children in LAs own schools is not nil cost - and therefore making it easier for parents to argue the financial cost of school A and school B is not as different as LAs have for years being making out.
My LA is very annoyed as it delegates 20 hours and is being asked to go back to only delegating 12 hours and it says it will have to write statements for children with 12-20 hours when it has not given these children statements for nearly 10 years.
None of this should make any difference to an individual child. It probably won't even change the actual budget your school gets. Its just a paper exercise to try and recognise the actual cost of placing children in settings.
It is also designed to help parents make a preference for Academies and Free schools - so for e.g. a LA cannot use the argument that it would cost more to send a SN child to an academy or free school than one of its own schools just because it would have to transfer money from a different budget.