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I had a similar case recently although I work in mainstream, but again with a student not accessing due to MH concerns (was closed to hospital ed but that’s another tale!) We (the school and other professionals involved) encouraged parents to appeal. At mediation the feedback from the LA was that the documentary evidence around intervention was more about MH rather than a ‘learning need’ (their words).
During mediation they wanted to establish that the student needed something additional/different in order to access education and ideally some evidence of what had/hadn’t worked so far specifically around learning rather than MH (never mind the ‘H’ in EHCP apparently….)
Long and short, hopefully parents will appeal and those writing letters will support, of course your LA/experience may vary, best of luck