Guidance

Core schools budget grant (CSBG) 2025 to 2026 for special schools, special post-16 institutions and alternative provision: methodology

Updated 18 March 2025

Applies to England

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This publication is available at https://www.gov.uk/government/publications/core-schools-budget-grant-csbg-2025-to-2026-for-special-schools-and-alternative-provision/core-schools-budget-grant-csbg-2025-to-2026-for-special-schools-and-alternative-provision-methodology

1. Introduction

To simplify the administration of a continuation of the 2024 to 2025 teachers’ pay additional grant (TPAG), the 2024 to 2025 teachers’ pension employer contribution grant (TPECG) and the 2024 to 2025 core schools budget grant (CSBG), we are combining them into a single CSBG for special schools and alternative provision (AP) schools for 2025 to 2026. 

We have set aside £480 million for the 2025 to 2026 CSBG to continue support for special and AP schools’ additional staff costs, as set out in figures 1 and 2 below. Additional funding of £125 million will be allocated, on top of this, for employer national insurance contributions (NICs) costs – this is covered in further detail below.

This document sets out how we will allocate the 2025 to 2026 CSBG for special schools and post-16 institutions, pupil referral units, AP academies and hospital education. Apart from a direct grant to non-maintained special schools (NMSSs), this CSBG is allocated to local authorities, for them to pass on to schools.

Figure 1: Core schools budget grant (CSBG) for 2025 to 2026 (chart)

Figure 2: Core schools budget grant (CSBG) for 2025 to 2026 (table)

A continuation of the 2024 to 2025 TPAG, which was first allocated to help schools with the costs of the teachers’ pay award from September 2023 £90 million
A continuation of the 2024 to 2025 TPECG, which was to help schools with the increase in employers’ contributions to the teachers’ pension scheme from April 2024 £135 million
A continuation of the 2024 to 2025 CSBG which was allocated to help with costs of the teachers’ pay award from September 2024 and the support staff pay increase from April 2024 £145 million
An increase to the 2024 to 2025 CSBG to bring that grant to a full-year equivalent of £235 million, reflecting that the teachers’ pay increase in 2024 to 2025 was from September 2024 and the support staff pay increase was from April 2024 £90 million
A growth factor relating to the 2024 to 2025 grants for special and AP schools that are new or expanding in 2025 to 2026 £20 million
Funding to support high needs providers with increases to their National Insurance contributions from April 2025 £125 million
Total CSBG for 2025 to 2026 £605 million (of which £480 million is consolidated grants and £125 million is for increases to NICs)

Figure 1 (above) shows the breakdown of the 2025 to 2026 CSBG. All numbers in figures 1 and 2 are rounded to the nearest £5 million. 

As set out in the figures above, the Department for Education (DfE) is providing £125 million through the CSBG to support special schools and special post-16 institutions, pupil referral units, AP academies and hospital education with the employers’ NICs increase from April 2025. Further information about this element of funding to compensate employers for these costs is included in the following sections.

These arrangements apply to special schools and AP schools and (for the NICs element) high needs provision in special post-16 institutions and independent training/learning providers.

The 2024 to 2025 funding in respect of TPAG, TPECG (pre-16) and CSBG for mainstream schools is being included in the mainstream schools national funding formula (NFF) allocations through the dedicated schools grant (DSG) for 2025 to 2026, rather than continuing as separate grants.

Similarly, for 2025 to 2026 we have included in the hourly rates for 3 and 4-year-olds and maintained nursery school supplementary funding, early years funding in respect of the September 2024 teachers’ pay award, which was distributed through the 2024 to 2025 early years budget grant (EYBG). Mainstream (5 to 16) schools and academies and early years providers will receive funding to support them with increases to their national insurance contributions through the separate NICs grant in 2025 to 2026.

2. Eligibility  for the grant 

Special and AP schools 

The CSBG  will provide additional funding to local authorities, for them to pass on to the following special schools and  AP  schools: 

  • maintained special schools  

  • special academies and free schools  

  • pupil referral units   

  • AP academies and free schools  

  • independent special schools

The NICs element of the CSBG can also be used by local authorities to help with increases in fees for high needs provision in special post-16 institutions (SPIs) and independent training and learning providers (ITPs/ILPs).

NMSSs are also eligible for the 2025 to 2026 CSBG, and will receive their allocation directly from DfE, rather than through a local authority. 

Hospital education 

Local authorities will also receive an allocation of CSBG to pass on to hospital schools and other maintained schools, academies and free schools providing hospital education.

3. Allocations and payments of  the grant

Local authorities will receive 3 payments of CSBG in 2025 to 2026.

We will confirm local authorities’ first CSBG allocations – covering both the consolidated 2024 to 2025 grants (TPAG, TPECG and CSBG) and the new NICs element – in May 2025.

Also in May 2025, we will make the first payment – this will cover the consolidated funding from the 2024 to 2025 grants. The second payment will be of the NICs element of the CSBG, and will be made in September 2025.

Both the first and second payments will be on the basis of the local authority allocations to be published in May 2025.

The first payment will be calculated by multiplying the relevant per place funding rates, with area cost adjustment (ACA) applied, by:

  • the SEND and AP 2024 to 2025 academic year place numbers for maintained special schools and pupil referral units, as published in the section 251 budget statement for 2024 to 2025 from each local authority

  • five-twelfths of the 2024 to 2025 academic year place numbers for special and AP academies and free schools, plus seven-twelfths of the available 2025 to 2026 academic year place numbers for special and AP academies and free schools, and

  • the number of pupils with an education, health and care (EHC) plan or special educational needs (SEN) support placed by the local authority in independent schools, as recorded by the authority on the January 2025 AP census

The second payment (for the NICs element of the CSBG) will be calculated by using the same data as above, and also:

  • the number of students recorded in the February 2025 R06 Individualised Learner Record (ILR) as students with high needs resident in the local authority area for whom an SPI or ITP/ILP receives high needs top-up funding

For hospital education, we will provide allocations based on a separate calculation, using a percentage of the hospital education funding for 2024 to 2025 included within the local authority’s 2024 to 2025 DSG. These 2024 to 2025 funding amounts can be found in the ‘Hospital Education’ worksheet of the ‘Impact of the high needs NFF’ spreadsheet in the national funding formula tables for schools and high needs: 2025 to 2026.

As with funding for special and AP schools as above, the first payment for hospital education (in May 2025) will cover the consolidated funding from the 2024 to 2025 grants, and the second payment (in September 2025) will then cover the additional NICs funding.

The DfE will allocate CSBG funding directly to NMSSs, calculated by multiplying the per place funding rate (with the relevant ACA applied) by five-twelfths of the number of places funded for the 2024 to 2025 academic year, plus seven-twelfths of the number of places to be funded for the 2025 to 2026 academic year. As above, the first payment will cover the consolidated funding from the 2024 to 2025 grants, and the second payment will then cover additional NICs funding.

We will then publish final local authority level allocations, and make the final 2025 to 2026 financial year payment, in March 2026. This payment will only be for any increase in overall CSBG funding from the allocations that are paid in May 2025 and September 2025. This final payment therefore covers both the consolidated 2024 to 2025 grants, and the NICs element.

For this final allocation we will make adjustments to the first allocation using:

The final allocation will reflect any net increase in place numbers. For any reduced 2025 to 2026 academic year place numbers, for example if a school’s place number reduces or a school closes, CSBG  funding that school attracts to its local authority will be reduced accordingly, subject to a protection that no local authority’s overall  CSBG  allocation will reduce to an amount less than the first allocation.

There will not be any further adjustments to the allocation of CSBG hospital education funding for 2025 to 2026, beyond that which is confirmed in May 2025.

The DfE will allocate any additional funding for new places in NMSSs directly.

4. Funding rates

Special and AP schools and special post-16 institutions

The CSBG funding rates for the 2025 to 2026 financial year are as follows:

  • £2,054 per place for SEND and AP places in maintained and non-maintained special schools, pupil referral units, and special and AP academies and free schools. This has been calculated using the 2024 to 2025 rates for TPAG (£446) and TPECG (£595) and the full-year equivalent of the 2024 to 2025 rate for CSBG (£1,013)
  • £1,608 per place for pupils placed in independent schools. This has been calculated using the 2024 to 2025 rate for TPECG (£595) and the full-year equivalent of the 2024 to 2025 rate for CSBG (£1,013) only, as independent schools were not eligible to receive TPAG in 2024 to 2025
  • A further £496 per place for SEND and AP places in maintained and non-maintained special schools, pupil referral units, and special and AP academies and free schools; and £496 per pupil/student placed in independent special schools, SPIs and ITPs/ILPs. This rate will be used for the separate September 2025 payment of the NICs element of the CSBG allocations as well as for the final payment of the additional NICs funding in March 2026

We apply an ACA to the funding rate because of geographical variation in labour costs. We will use the same ACAs as for the high needs national funding formula for 2025 to 2026 and we have published them in the area cost adjustment for national funding formula: technical note.

Hospital education

Local authorities will also receive an allocation equivalent to 7.3% of the annual funding for hospital education included in the 2024 to 2025 DSG allocations. This percentage has combined the 2024 to 2025 percentages for TPAG (1.75%) and TPECG (2%) and the full-year equivalent of the 2024 to 2025 percentage for CSBG (3.55%).

In addition, the hospital education allocation of funding for the NICs increase will be equivalent to 1.75% of the annual funding for hospital education included in the 2024 to 2025 DSG allocations.

5. Provisional conditions of grant

The conditions of grant for CSBG 2025 to 2026 will be published separately alongside the allocations in May 2025. This will confirm the requirements set out below.

Many local authorities have indicated to us that they have passed on to their eligible schools funding provided through the 2024 to 2025 TPAG, TPECG and CSBG at the rates and place numbers used to calculate their allocations. Some authorities have used alternative allocation methodologies for their schools, using the flexibility in the conditions of grant for 2024 to 2025, which recognises that the staffing and other costs schools face can vary between individual schools, depending on the complexity of their pupils’ needs and other factors.

The methodology for the 2025 to 2026 CSBG provides the opportunity to retain these flexibilities and provide continuity for schools or move, subject to appropriate consultation, to a simpler approach that reflects the methodology used to allocate the funding to local authorities.

Maintained schools, academies and free schools

For allocations of funding in respect of the schools they currently maintain, academies they previously maintained, free schools located in their area and schools that provide hospital education, local authorities must comply with the following requirements in setting their local arrangements for passing on the 2025 to 2026 CSBG funding.

For the elements of funding that are a consolidation of the 2024 to 2025 TPAG, TPECG and CSBG, local authorities must:

either A. pass on to those schools the CSBG funding at the same combined rate per place, or overall level (converted into an amount per SEND or AP place, except in the case of hospital education), as they allocated to those schools in 2024 to 2025 through the TPAG, TPECG and CSBG, ensuring that all those schools receive a funding allocation from the 2025 to 2026 CSBG on the basis of :

  • the full-year equivalent of the 2024 to 2025 CSBG, which they received [footnote 1] plus the 2024 to 2025 TPAG and TPECG, and
  • five-twelfths of their 2024 to 2025 academic year place numbers and seven-twelfths of their 2025 to 2026 academic year place numbers

or, B for those local authorities which do not already in 2024 to 2025 pass on this funding at the rates and place numbers used by the department to calculate their allocations, move to this approach for the CSBG in 2025 to 2026. However, to exercise this flexibility to move to this methodology, they must:”

  • consult with those schools before deciding on that alternative methodology
  • continue to pass on 100% of the total funding allocated in respect of those schools

For the NICs element of the 2025 to 2026 CSBG which does not have a 2024 to 2025 equivalent, local authorities can use the rates that the department has used for their allocations, as in option B above, or vary the amounts per place, following consultation with their schools.

Once local authorities know their CSBG allocations, having determined their maintained schools’ place numbers for academic year 2025 to 2026, and having reached agreement on their academies’ and free schools’ place numbers for academic year 2025 to 2026, and on the basis of the above funding rates, they should seek swiftly to confirm the allocations for individual special schools and AP schools, providing them with the earliest possible certainty over their 2025 to 2026 budgets.

Independent special schools, special post-16 institutions and independent training/learning providers

The allocation methodology that a local authority applies to its maintained schools, academies and free schools is not applicable to independent schools, SPIs and ITPs/ILPs that are funded by the local authority for their placement of pupils and students with special educational needs and disabilities (SEND). This element of funding allocated to local authorities, based on their independent school placements and top-up funding for SPIs and ITPs/ILPs, is to support:

  • the continuation of any increases in fees already charged by independent schools in 2024 to 2025 as a result of any increase in costs relating to the teachers’ pension contribution increase in 2024 and other 2024 staff salary increases
  • the payment of any increase in school fees for 2025 to 2026 if – due to the timing of fee and salary agreements – those costs have not been reflected in the fees already charged for 2024 to 2025
  • the increase in high needs placement fees for 2025 to 2026 charged by independent schools, SPIs and ILPs on account of the NICs increase from April 2025

Non-maintained special schools (NMSSs)

NMSSs will receive their CSBG funding at the standard rate per place direct from DfE.

6. New and growing schools

New special and AP free schools that open before February 2026.

Funding for any new special and AP schools opening between April 2025 and February 2026, whose place numbers are not included in calculation of the first CSBG allocation, will be included in the second CSBG allocation to be made in March 2026. Local authorities will be aware of those special and AP free schools opening in their area and should take them into account in any relevant consultations and decisions about the distribution of CSBG funding.

7. Contact us

If you have any questions after reading this guidance, please contact us using our Customer Help Portal.

  1. Local authorities should use the 2024 to 2025 CSBG amount scaled up by 166%, reflecting the percentage increase from the 2024 to 2025 CSBG rate (£610 per place) to the full-year equivalent of that rate (£1,013 per place). ↩

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