Guidance

High needs funding: 2025 to 2026 operational guide

Updated 17 December 2024

Applies to England

1. Introduction

This guide explains how the 2025 to 2026 financial and academic year high needs funding system will operate locally and across different educational settings in England. Some sections of the guide are specific to particular types of setting. 

The guide is to inform local budget planning and consultations in the months prior to the beginning of the financial year 2025 to 2026, particularly in agreeing how provision for children and young people with high needs should be commissioned and funded. 

The information detailed in the guide should be used with immediate effect, as many of the sections are also relevant for the ongoing operational arrangements in the 2025 to 2026 financial and academic year.

The main updates are highlighted in the changes to the high needs funding operational guide for 2025 to 2026 section.

Throughout this guide the Department for Education (DfE) and Education and Skills Funding Agency (ESFA) are referred to as ‘the department’: the ESFA’s functions are being transferred to other directorates in the department prior to the ESFA ceasing to exist as a separate agency from 1 April 2025.

1.1 Planned publication of the 2026 to 2027 guide

We will publish the 2026 to 2027 high needs operational guide following the publication of the national funding formula (NFF) for 2026 to 2027.

1.2 Who is this publication for?

This guidance is mainly for:

• local authorities
• schools and colleges (see ‘Table 1: definitions of terms’ below)
• early years providers, including maintained nursery schools

1.3 What is high needs funding?

High needs funding supports:

• provision for children and young people with special educational needs and disabilities (SEND) who require additional resources to participate in education and learning, mainly in schools and colleges, from their early years to age 25 (excluding young people aged 19 to 25 who do not have an education, health and care plan (EHC) plan and individuals who are over the age of 25)

• children up to age 16 in alternative provision (AP)  who, because of exclusion, illness, or other reasons, cannot receive their education in mainstream or special schools

Supporting funding arrangement information for young people with special educational needs (SEN) who are aged 19 to 25 and do not have an EHC plan, and those who are over the age of 25 is set out in annex 1: other information.

High needs funding is provided to local authorities through the high needs block of the dedicated schools grant (DSG), enabling them to meet their statutory duties under the Children and Families Act 2014 and the Education Act 1996. Local authorities must spend that funding in line with the associated DSG: conditions of grant and The School and Early Years Finance (England) Regulations.

Local authorities’ high needs funding allocations through the DSG cover:

• allocations of funding to schools and colleges, including place funding which forms part of schools’ and colleges delegated annual allocation, and top-up funding

• funding for high needs services delivered directly by the local authority, or under a separate service level agreement with a school or college. The latter can include funding devolved to schools and colleges, for them to spend within limits specified in the agreement

High needs funding is also provided directly to some schools and colleges by  the department and the respective conditions of grant and funding agreements apply.

1.4 Local special educational needs and disabilities (SEND) responsibilities and accountability

Local authorities are statutorily responsible for overseeing the local offer of services and provision to meet the special educational needs of children and young people in their area.  The Children and Families Act 2014 requires them to do this through co-production with key partners. Local authorities must ensure that children and young people and their parents/carers are involved in discussions and decisions about their individual support, as well as involving them in reviewing and improving local provision, in line with their statutory duties and the SEND code of practice.

Likewise, local authorities must ensure any changes to SEND provision and high needs funding arrangements are made in close consultation and co-production with the schools and colleges which will be affected. The local authority’s schools forum is one way through which partnership working across the education sector can be strengthened to ensure the local authority’s spending decisions are most effective. Local authorities must consult with the schools forum about their high needs funding arrangements, which should include funding for place number changes and top-up funding rates, as well as budgets for independent school placements and central support services.

In addition, all of those providing education to children and young people from the area should be engaged, regardless of where the provider is located, to ensure good quality provision can be planned, developed and sustained in line with available resources. This includes early years settings and colleges, as well as parents of children and young people with SEND and young people themselves.

Responsibility within a school or college sits at different levels depending on how they are organised. For example, the head teacher or principal of an academy is responsible for the individual school, while the academy trust oversees a group of academies. This is reflected in the statutory duties and the practical arrangements. Under the Children and Families Act 2014 the leader of a specific school or college (for example, a headteacher or principal) must be consulted over the placement of an individual child or young person, while the overarching body (a governing body, academy trust or the proprietor responsible for the school or college) must be involved in strategic decisions relating to the SEND local offer. 

In this guidance, references to schools and colleges should be interpreted as applying to the headteacher, principal, governing body, trust or another proprietor according to the context.

1.5 Definitions of terms

The definitions of some terms used throughout this guide are detailed in table 1 below.

Table 1: definitions of terms

Term used	Definition of term
Schools and colleges	The term ‘schools and colleges’ is used to refer to all education provider types, including: all mainstream schools (pre and post-16, maintained and academies, which should normally be taken to include free schools unless these are referred to separately, but excluding mainstream independent schools), maintained special schools and non-maintained special schools (NMSS), special free schools, special academies, independent special schools, pupil referral units (PRUs) and AP academies, hospital schools, general further education (FE) colleges, sixth form colleges, independent learning providers (ILPs) and special post-16 institutions (SPIs) – unless specific references or funding processes are relevant to particular types of school or college
Commissioning local authority or commissioning school	This is the local authority or school placing a child or young person at a school or college. For those with EHC plans this will be the local authority where they live (the resident local authority). In the case of AP, schools may also be commissioners for children placed in AP settings
Provider local authority	This is usually the local authority where a school or college is located. The provider local authority funds the high needs places at a school or college from its DSG. For centrally funded schools and colleges, that is, NMSS, SPIs and a small number of other FE, the department is considered the provider local authority
Resident local authority	This is the local authority where a child or young person lives (wholly, or their main residence), as identified in the school census or Individualised Learner Record (ILR) using their postcode. The local authority where a child or young person lives will be responsible for securing any special educational provision or for making AP, funded from their high needs budget

2. Changes to the high needs funding operational guide for 2025 to 2026

We have taken the opportunity to review some aspects of this 2025 to 2026 guide and have consequently made some changes from the 2024 to 2025 version. These changes have resulted in a rearrangement of the order of some sections; and refinements to the text to improve the readability, provide greater clarity and remove duplication to aid the reader. Finally, some sections have also been moved from the main document into annexes.

In making these changes, we have not altered the substance of the guidance, as the operational processes and core principles remain unchanged.

For 2025 to 2026, the main changes are:

2.1 New information:

• overall funding increases and changes to the high needs national funding formula (NFF) - see annual 2025 to 2026 high needs funding overview
• changes to how legacy funding streams and additional grant funding are allocated
• 2025 to 2026 special schools minimum funding guarantee
• new VAT rules which apply to some schools and colleges
• 2024 to 2025 academic year 16 to 19 average national funding rate
• 2024 to 2025 academic year exceptional in-year growth methodology / criteria for SPIs and centrally funded colleges

3. Annual 2025 to 2026 funding overview

3.1 High needs funding allocations to local authorities for 2025 to 2026

The majority of high needs funding is allocated through the high needs NFF and included in local authorities’ DSG allocations. The total high needs budget for 2025 to 2026 will be £11.9 billion, of which £11.3 billion is initially distributed through the NFF to provide indicative allocations for local authorities, £145 million is set aside for later NFF adjustments and allocations outside the NFF, and £480 million is for the core schools budget grant (CSBG).

The basic structure of the high needs NFF for 2025 to 2026 has not changed from the 2024 to 2025 NFF. More details can be found in the NFF policy document, calculation tables and technical note.

The separate CSBG, which local authorities will receive in 2025 to 2026, and for which we have set aside £480 million, comprises 3 separate grants they received in 2024 to 2025:

• the teachers’ pay additional grant (TPAG)
• the 2024 teachers’ pension employer contribution grant (TPECG 2024)
• a full year allocation of the CSBG which is allocated for the period September 2024 to March 2025, to help with schools’ overall costs, including the 2024 teachers’ pay award and support staff costs

Further details of how the 2025 to 2026 CSBG allocations to local authorities are calculated and how local authorities are required to pass this CSBG on to eligible special schools, PRUs, AP academies and those providing hospital education can be found in the core schools budget grant (CSBG) 2025 to 2026 for special schools and alternative provision.

Further information about the distribution of additional funding to compensate employers for the planned increase in their National Insurance contributions from April 2025 will be published as soon as possible in early 2025.

3.2 Funding increases for 2025 to 2026

All local authorities are receiving an increase in funding in 2025 to 2026, through the NFF. A funding floor provides a minimum increase of 7% per head of a local authority’s projected resident 2 to 18 population, and the NFF provides increases up to a gains limit of 10% per head.

The increases in funding to local authorities are both for the costs of additional placements (including those as a result of a new EHC plan) and services, and for any increase in the costs of existing high needs placements and services. Local authorities should therefore discuss with their schools and colleges the funding that they believe is necessary to make the required provision, taking into account:

• the number of placements they expect to commission (or schools to commission in the case of AP) in 2025 to 2026, and which should be reflected in the allocation of high needs place funding  for the places required
• the anticipated costs of those placements in 2025 to 2026, which may be reflected in the allocation of high needs top-up funding (or high needs funding for the full cost of placements in independent special schools and special post-16 institutions not in receipt of place funding)
• the amount of CSBG that schools are receiving

A minimum funding guarantee (MFG) of 0% continues to offer protection for special schools. Further details can be found in the section on maintained special schools and special academies, and in annex 3: special schools minimum funding guarantee.

3.3 Mainstream schools’ and colleges’ SEND provision

The government has made it clear that the general direction of SEND reform is towards establishing a mainstream school and college environment that is more inclusive of children and young people who need specialist SEND provision, including in SEN units and resourced provision (RP). The department is working on a range of reforms that will facilitate that shift.

In the meantime, drawing on the research and examples of existing good practice that have already been published ^{[footnote 1] [footnote 2]}, local authorities should consider with their schools and colleges whether changes to local high needs funding arrangements and other developments could be taken forward to support an enhanced role for mainstream schools and colleges in making provision for children and young people with more complex needs. Many local authorities are already improving SEND provision in their mainstream schools through the creation of more SEN units and RP.

The School and Early Years Finance (England) Regulations for 2025 to 2026 will allow local authorities to spend from their high needs budget in support of such initiatives. Specifically, local authorities can incur expenditure and target funding for the purposes both of encouraging the education of children and young people with SEN at mainstream schools, and of collaboration between special and mainstream schools to enable those with SEN to engage in mainstream school activities. See further information below on local authorities’ funding of such services centrally, and on the funding for mainstream schools, which can be used to target schools that are particularly inclusive of children with SEND.

4. How funding is allocated to local authorities, schools and colleges

4.1 High needs funding for local authorities through the dedicated schools grant (DSG)

The DSG is the main source of government funding for the provision of education by local authorities and schools in England. Its use is governed by the DSG: conditions of grant, one of which requires the grant to be spent in accordance with The School and Early Years Finance (England) Regulations. Schedule 2 to the regulations sets out the categories of central expenditure from their DSG that local authorities are permitted to incur. The DSG cannot be used for purposes other than those specified in the conditions of grant and regulations. Examples of such high needs expenditure from the DSG that is not permitted are: local authorities’ spending on their SEND and finance administration, including EHC needs assessment and planning functions, and spending on health and social care costs. See annex 6: health and social care costs for further information.

The DSG is intended to meet:

• the educational costs of early years provision, covered by the early years block
• primary and secondary mainstream education for pupils up to age 16 in maintained schools and academies, covered by the schools block
• the educational costs of provision for children and young people aged 0 to 25 with complex SEN (excluding those aged over 19 and up to 25 without an EHC plan), and of AP, covered by the high needs block
• the costs of some services for schools delivered centrally by local authorities, covered by the central school services block (CSSB)

Local authorities can transfer funding from the high needs block and CSSB to other budgets funded through the DSG. Transfers from the early years block can be made in compliance with the early years pass through rate conditions, details of which can be found in the early years entitlements: local authority funding operational guide 2025 to 2026.  

The schools block is ringfenced which means that this block must be spent for the purposes specified in the conditions of grant. Local authorities retain the ability to transfer up to 0.5% of funding out of the schools block to any other block, with the agreement of the schools forum. Formal permission from the Secretary of State (a disapplication of the relevant DSG condition of grant) will be required for transfers out of the schools block above 0.5%, or transfers of any amount without schools forum approval.

Further details of transfers out of DSG funding blocks, including how to request a disapplication, can be found in the transfer between blocks section of the schools operational guide: 2025 to 2026.

Local authorities should be aware that section 5 of the DSG conditions of grant sets out particular requirements relating to how income and expenditure from the DSG should be accounted for locally, including action that must be taken in the event of overspends and year-end deficits.

4.2 High needs place deductions

For the following schools and colleges, place funding is included in local authorities’ initial DSG allocations and then deducted from the provider local authority’s DSG by the department to pay the funding direct to: 

• mainstream academies and free schools
• special academies and free schools
• AP academies
• 16 to 19 academies and free schools
• general FE colleges, sixth form colleges and ILPs

The number of high needs places deducted is based on the annual place change notification process. 

The department does not deduct in the same way for places at centrally funded NMSS, SPIs and some FE colleges. Instead, these deductions are effectively made through the NFF import/export adjustment. Further information about this NFF adjustment is set out in the 2025 to 2026 NFF policy document, and the data for 2025 to 2026 will be published in May/June 2025. In the meantime, it is important that schools and colleges complete the school census and ILR respectively with accurate information on the number of pupils and students for whom they receive high needs top-up funding from a local authority, as this information is used in the calculation of the import/export adjustment.

Deductions are made for some places at AP free schools, also based on school census data. For the 2025 to 2026 academic year, deductions will be made for places at AP free schools that opened during or before the 2023 to 2024 academic year. The deduction is from the DSG of the local authority where pupils live, based on the number of pupils aged 5 to 15 years, main or sole registered at that AP free school at the time of the October 2024 census. 

The academic year place funding rates are shown below in table 2, with further information in table 3 on the type of school. The 2024 to 2025 and 2025 to 2026 academic year place amounts are pro rated as follows, to calculate DSG deductions for the 2025 to 2026 financial year, by place and type of school or college.

Table 2: pre-16 DSG deductions by type of school

Type of school	AP: 2024 to 2025 academic year (× five-twelfths)	AP: 2025 to 2026 academic year (× seven-twelfths)	SEN unit/RP: 2024 to 2025 academic year (× five-twelfths)	SEN unit/RP: 2025 to 2026 academic year (× seven-twelfths)	Special schools: 2024 to 2025 academic year (× five-twelfths)	Special schools: 2025 to 2026 academic year (× seven-twelfths)
Mainstream academies and free schools	N/A	N/A	£2,500 or £4,167	£3,500 or £5,833	N/A	N/A
Special academies and free schools	£4,167	£5,833	N/A	N/A	£4,167	£5,833
AP academies and AP free schools	£4,167	£5,833	£4,167	£5,833	N/A	N/A

Table 3: post-16 (SEN places) DSG deductions by school or college type

Type of school or college	Schools: 2024 to 2025 academic year (× four-twelfths)	Schools: 2025 to 2026 academic year (× eight-twelfths)	Post-16 schools (16 to 18): 2024 to 2025 academic year (× four-twelfths)	Post-16 schools (16 to 18): 2025 to 2026 academic year (× eight-twelfths)	Post-16 schools (19 to 24 with EHC plan): 2024 to 2025 academic year (× four-twelfths )	Post-16 schools (19 to 24 with EHC plan): 2025 to 2026 academic year (× eight-twelfths)
Mainstream academies and free schools	£2,000	£4,000	N/A	N/A	N/A	N/A
Special academies and free schools	£3,333	£6,667	N/A	N/A	N/A	N/A
AP academies	£2,000	£4,000	N/A	N/A	N/A	N/A
16 to 19 academies/FE/ILPs	N/A	N/A	£2,000	£4,000	£2,000	£4,000

The above rates are multiplied by the number of places to calculate the total deduction amount.

5. Funding for schools and colleges

Schools and colleges receive high needs funding in different ways, depending on the type of setting.  

5.1 Core funding

The annual allocation a school or college receives as high needs place funding, which is equivalent, or in addition, to the core funding received by schools and colleges through their respective funding formulae. This funding is received either directly from the provider local authority (for maintained schools and PRUs, based on the financial year) or from the department (for academies, NMSS, ILPs, FE colleges and SPIs, based on the academic year). This core funding has been supplemented by various additional funding streams, which have remained as separate annual allocations and grants.

5.2 Top-up funding

The funding required over and above the core funding, allocated by local authorities to schools and colleges from their high needs budget, to enable a pupil or student with high needs (normally when an EHC plan is in place) to participate in education and training.

5.3 Funding for the full costs of a placement

Local authorities also allocate high needs funding to independent schools (including independent special schools), independent AP and SPIs not receiving place funding, to meet the cost of the placements they commission, rather than as place and top-up funding.

5.4 Funding under a service level agreement

A local authority can commission a school or college to deliver a SEND or AP service and fund that from its high needs budget, where permitted by the regulations.

The sections below explain place funding and top-up funding for all schools and colleges, and the funding overview by education setting type section provides further information on the funding of high needs provision in different types of school or college.

6. High needs place funding

Place funding is allocated as an annual amount of core high needs funding for schools and colleges. Place funding is allocated at a standard rate for a number of places, reflecting the number of high needs placements which commissioning local authorities expect to make in the coming year.

Place funding is allocated to:

• all types of special schools, apart from independent special schools
• PRUs and AP academies (including AP free schools)
• all types of mainstream school with a SEN unit or RP and/or with a sixth form that has pupils with high needs
• all types of colleges  that educate students who have high needs, apart from the SPIs and any other post-16 institutions that are fully funded by a local authority

The annual process for local authorities to notify the department of changes to certain schools’ and colleges’ 2025 to 2026 high needs place number is set out in the how to complete the high needs place change workbook for 2025 to 2026.

The annual allocation of place funding for the school or college is neither intended to cover particular costs, nor associated with or reserved for a specific local authority or individual pupil or student. Place funding should not be withdrawn if an individual does not occupy a funded place, and a local authority may not seek to recover funding for places it considers unused in the previous or current academic year.

6.1 Determination of funded place numbers

In most cases the provider local authority in whose area a school or college is located determines the numbers of high needs places to be funded. Further information about how those numbers are collected by the department is set out in the ‘Reporting place numbers for the 2025 to 2026 academic year’ section below. Those place numbers are then multiplied by the relevant funding rates to provide each school’s or college’s place funding allocation. For certain schools and colleges, the place numbers are aggregated and inform the place funding deductions that are made by the department from each local authority’s DSG allocation.  

The exceptions to this are AP free schools, NMSS, SPIs and a small number of centrally funded FE colleges and ILPs, where the department acts as the provider local authority. Funding for these providers is allocated mainly on the basis of the previous year’s data on the number of high needs pupils or students who attend the school or college, as reported through the school census and ILR, respectively.  Further information on this is set out under the sections about the different types of school or college.

Dialogue between local authorities and all schools and colleges that offer high needs provision is essential when preparing for the allocations of high needs place funding for the following academic year. Local authorities should consult with schools and colleges in their area and discuss both the current numbers of places being occupied by pupils or students, whose details are included on the school census and ILR returns, and the number of places expected to be taken up in future. 

In the event of local differences between local authorities and their schools and colleges about the number of places that will be used for their allocations of place funding:

• the high needs place change process: 2025 to 2026 place academic year guidance sets out the process for managing ‘not agreed’ cases for academies (including most free schools), and most FE colleges
• local authorities make the final determination for their maintained schools

6.2 Reporting place numbers for the 2025 to 2026 academic year

The guidance on the high needs place change process: 2025 to 2026 academic year (published October 2024 ) explains the place change notification process. This sets out the collaborative approach and supporting process that local authorities, schools and colleges should use for reviewing, adjusting and reporting to the department changes to the academic year 2025 to 2026 high needs place numbers from the current 2024 to 2025 published places at: academies, free schools (excluding  AP  free schools), FE colleges, sixth form colleges, ILPs and SPIs not previously funded by the department. Further details are provided in the funding overview by education, setting type section.  

The outcomes from the high needs place change process for academic year 2025 to 2026 are published in January 2025, and this publication is followed by a 2-week enquiry window, where local authorities, schools and colleges can raise significant issues.

Local authorities do not need to report changes to place numbers in their maintained schools to the department, although they should provide information to the local schools forum as part of the required consultation with them on overall high needs funding arrangements, and are required to provide this information to the department annually on the authority proforma tool (APT).

The APT assists local authorities to model and then confirm how they plan to allocate mainstream school funding, in accordance with the arrangements set out by the department. The APT asks for the number of SEN unit or RP places that are occupied by pupils in the mainstream school to which that unit or RP is attached, as at the most recent October census. This allows the distribution of occupied and unoccupied places to be calculated for academy funding and DSG deductions. In addition, it is important that the number of places that are being funded in each school is reported accurately on the local authority’s section 251 (s251) budget statement, as this data is used locally for calculating individual schools’ budget share, and nationally for other local authority grant calculations.   

If a local authority maintained school or PRU converts to an academy, place numbers must be agreed between the local authority and school. To ensure that the school is funded on the correct number of places, the local authority should notify the department’s project lead for the conversion of the maintained school of the agreed place number by completing the ‘notification of changes to funded high needs places’ form. This document is supplied by the department’s delivery officer and must be returned before the school converts. If no notification is received, September to March place numbers recorded in the 2024 to 2025 s251 budget return will be rolled forward.

A ‘notification of changes to funded high needs places’ form must also be completed for all mainstream schools or PRUs converting where post-16 places are required. This is because post-16 place data is not differentiated from pre-16 place numbers in the s251 return. In these cases, completion of the form will ensure clarity of the split between pre and post-16 place numbers.

6.3 Where pupil and student numbers differ from funded places

We recognise that there may be a difference  between the number of funded high needs places and the actual number of pupils or students in attendance when the new academic year commences, or at other points during the year. As explained in the high needs place funding section, place funding is not reserved for specific individuals. It is for schools and colleges to apportion the total allocated place funding across the actual number of pupils and students with high needs. In most cases, the variance between place numbers and pupils or students is small, or only has a marginal impact on the cost of the provision. The department is unlikely to revise annual allocations to academies and colleges where the number of commissioned places changes after the annual processes, although there are processes for exceptional in-year growth in centrally funded colleges (see below).

If the number of pupils or students agreed as having high needs by the resident local authority exceeds the number of funded places, the school or college should approach the provider local authority. In practice, that could result in the school or college incurring additional costs in making special provision not met through the top-up funding amount normally paid. We expect the provider local authority to engage with the school or college to agree how the costs of the additional special provision required are to be met and these conversations should take place as early as possible. The provider local authority should not automatically be charged an additional £10,000 or £6,000 (the relevant place funding amount) per pupil or student. The amount should reflect the actual costs of making additional special provision available, which may only be marginal, and which may, therefore, require no additional funding or, funding that is less than the full amount of place funding, taking into account the top-up funding paid by the resident local authority. Importantly, the provider local authority and the school or college should seek to agree how those costs are to be met.

Where pupils or students attend a school or college in a different local authority area to the one they live in, the import/export adjustment will compensate the provider local authority, albeit in the subsequent financial year. This will avoid the position where the commissioning resident local authority effectively funds twice – both through increased top-up funding direct to the school or college and through the £6,000 import/export adjustment in the NFF. These arrangements apply to colleges and special schools that are experiencing year-on-year growth in the number of pupils and students with high needs that they admit.

An example of how the high needs funding arrangements should operate when a college has more students with high needs than the number of places is included in annex 2: an example of where pupil and student numbers differ from allocated places. The same principles apply when a school has more pupils with high needs than the number of funded places.

Where the department acts as the ‘provider local authority’ (for NMSS, SPIs and a small number of centrally funded FE colleges), funding is provided on a lagged basis. This means that the number of pupils or students who attend one of these schools or colleges in any given year is used to calculate their respective place funding allocation for the following year. The funding allocation will subsequently be deducted from the relevant commissioning local authorities through the NFF import/export adjustment.

Given these arrangements in place, these centrally funded schools and colleges should not seek to secure any additional place funding from any local authority, to avoid a situation where a local authority effectively funds a place twice.

For SPIs and the centrally funded FE colleges and ILPs, if the number of high needs students recorded in the academic year 2025 to 2026 ILR R04 return is greater than their funded places, they may receive an in-year growth award as part of the annual exceptional in-year growth process, subject to the annually agreed criteria. This is a data driven process and no business case is needed. The methodology for calculating in year growth is determined annually. We have published the 16 to 19 funding: in-year growth funding for the 2024 to 2025 (academic year) criteria.

If a NMSS has significant numbers of pupils or students over and above their allocated place numbers, which raises funding concerns because of the lagged data approach, they should contact the department via the Customer Help Portal.

7. High needs top-up funding (including examples)

Top-up funding (sometimes referred to as element 3) is the funding which is required over and above the core funding (sometimes referred to as elements 1 and 2) a school or college receives to enable a pupil or student with high needs to participate in education and learning. This is paid by the commissioning local authority (or sometimes schools in the case of AP).

Most of this section covers how top-up funding works for children and young people with SEND and includes some examples. Further information about how top-up funding works for PRUs, AP academies and AP free schools is set out in the alternative provision section.

Although many pupils and students receiving high needs funding will have an associated EHC plan, local authorities have the flexibility to provide high needs funding outside the statutory assessment process for all children and young people with high needs up to the age of 19.

7.1 Collaboration between local authorities, schools and colleges to organise local authority top-up funding

Local authorities play an essential statutory and strategic role in planning education services and funding placements, and in supporting local schools and colleges, within a robust financial framework. The local approach to top-up funding should, therefore, be planned so far as possible in the context of a strategic agreement between commissioning local authorities, schools and colleges on the available special educational provision and the overall levels of funding required.

Such strategic discussion should be carried out as part of the local authority’s statutory duty to keep the special educational provision in their area under review, working with parents, young people, schools and colleges, as set out in chapter 4 of the SEND code of practice, and to publish information about this local offer of services and provision for children and young people with SEN on their website. The published local offer must include information about the arrangements the local authority has for funding children and young people with SEN and disabilities, including any agreements about how providers will use any funding that has been allocated to them. A wide range of educational providers are required to collaborate with local authorities in such reviews, including maintained schools, academies, FE and sixth form colleges, independent and NMSS, SPIs and other providers of special educational provision, and relevant early education providers.

It is always better if funding arrangements are developed collaboratively and agreed in advance to facilitate a shared understanding of the different types of provision which should be available, the needs of the children and young people who are likely to require them and the associated level of top-up funding (for example, if funding bands are used) to meet their support needs.

7.2 Other requirements relevant to top-up funding 

Local authorities’ expenditure from the DSG is subject to conditions of grant set by the department, which govern the way high needs funding is used, including the way top-up funding is organised, including: 

• local authorities must treat children and young people with high needs on a fair and equivalent basis when making arrangements for their funding, regardless of whether they are placed in maintained schools, academies and free schools, providers in the FE sector, or non-maintained and independent provision
• local authorities must make payments of top-up funding in a timely fashion on a basis agreed with the school or college. These must be monthly, unless otherwise agreed

The department will examine cases and consider remedial action where there is clear evidence from a school or college that a local authority is not meeting the relevant conditions of grant, providing the local authority’s complaints processes have been exhausted (see the ‘Resolving funding disagreements’ section below).

Where a pupil or student with an EHC plan is due to move between educational settings or phases, the local authority must review and amend the EHC plan in the spring of the preceding academic year and issue a revised EHC plan by 31 March of that same year, as set out in annex 8: important dates. In no circumstances should an admission of a pupil or student, or the continuation of a placement at a school or college be conditional on or delayed by receipt or agreement of top-up funding. 

7.3 Determining top-up funding levels

Local authorities are responsible for decisions regarding levels of top-up funding since they have the statutory responsibility for making the educational placement.  Where a child or young person has an EHC plan, the local authority must secure the special educational provision specified in the plan. Local authorities also have statutory duties in respect of children of compulsory school age without a school place, that require the use of AP.

Local authorities, schools and colleges should consider the following principles relating to decisions about top-up funding.

7.3.1 Decisions should be timely

Levels of top-up funding should be confirmed at the earliest opportunity, before the pupil or student has been admitted to the school or college, so that their placement is not disrupted, and recognising the cashflow and accounting requirements of schools and colleges.

7.3.2 Decisions should be clear 

The local authority should confirm (in writing) the amount of top-up funding to be paid as soon as possible after the placement has been commissioned.  Where a local authority makes a number of placements, a single schedule of placements and payments may be sufficient. 

7.3.3 Decisions should be evidence-based

The local authority should consider evidence from the school or college about the costs of offering provision for the pupils and students with high needs, including cost increases such as for utilities and staff pay awards that are not met from other sources.  Schools and colleges should be transparent about their costs and how they contribute to delivering the overall provision for the pupils and students with high needs.

7.3.4 Decisions should reflect relevant costs

Top-up funding is intended to contribute to the costs of special educational provision for children and young people with high needs. Top-up funding should therefore take account of other elements of funding that also contribute to meeting such costs, such as mainstream schools’ and colleges’ formula funding to meet the cost of additional support up to £6,000 per pupil, or special schools’ and colleges’ place funding.

Top -up funding can reflect:

• the provision and facilities required by individual pupils and students, such as the cost of any specific additional support to meet the individual’s needs, or free school meals for those entitled to receive them in special schools
• the costs of the overall provision for all those with SEND, for example, the costs of buildings for those schools and colleges not able to access capital funding

However, the department does not expect top-up funding to contribute to or subsidise: 

• overheads attributable to other budgets within the school or college, and funded from other sources, for example, residential accommodation funded from the local authority’s social care budget or adult education provided by a college
• costs that would have had to have been met even if it had no pupils or students with high needs, for example, the salary of the special educational needs co-ordinator (SENCO) required by all mainstream schools
• the costs of legal action against local authority decisions on assessment, provision, and top-up funding, including support for parents seeking SEN tribunal judgments on such local authority decisions
• the cost of educational and other assessments (both non-statutory and EHC needs assessments), for example, by educational psychologists

7.3.5 Decisions should be based on agreed provision and cost expectations

Agreements over what provision should be ordinarily available, with associated standardised funding rates, can simplify extensive negotiations on provision and funding, and avoid disputes arising. By calculating top-up funding for a cohort of pupils or students, local authorities can create certainty for schools and colleges on the level of funding they can expect to receive for the provision. A clearly understood and consistently applied local ‘banding’ framework can therefore be particularly important – see further information about banded funding arrangements below. In such circumstances, even where provision is specified in an EHC plan, there is no statutory requirement that a local authority must pay top-up funding at a particular rate requested by a school or college.

In some cases, decisions about top-up funding may need to reflect the normal or expected occupancy of places. The nature of pre-16  AP and SEND provision in some schools and colleges may result in empty places arising at some points in the academic year, for example, in AP where referrals begin to be made later, or after the autumn term. Similarly, some schools may routinely admit a higher number of pupils than the places for which they are funded.

Place funding comes from the provider local authority’s high needs budget, and top-up funding from the resident authority’s high needs budget. Because the sources of these different elements of funding can be different local authorities, if a school or college has been funded for high needs places which are not being used (whether at £6,000 or £10,000 per place), place funding should not simply be deducted from the normal level of top-up funding. Similarly, if a school or college has filled all of its funded high needs places, they should not automatically expect the top-up funding rate to be increased by £6,000 or £10,000 per additional placement. See annex 2: an example of where pupil and student numbers differ from funded places for supporting information.

7.4 Banded funding arrangements

Many local authorities have systems which indicate the range of top-up funding that might be provided for children and young people with a particular type and complexity of need (sometimes referred to as ‘banded funding’ systems). These can be helpful in providing clear and transparent funding arrangements.

Where a local authority makes a large number of placements at a school or college or at a range of schools and colleges locally, a system which agrees likely levels of top-up funding in advance can be a very efficient way of allocating funding. The local authority must be satisfied that the final allocation of funding (both the top-up funding and other elements of funding) is sufficient overall to secure suitable provision (for example, that specified in an EHC plan) and should keep top-up funding levels under review at regular intervals. 

There can be issues when a child or young person is placed in a school or college located in another local authority area if there are different expectations of provision and funding. When placing a pupil or student in a school or college in another local authority’s area, commissioning local authorities should therefore:

• determine top-up funding in accordance with the funding bands that the provider local authority uses for their pupils and students, unless there is clear evidence that the provision required for the child or young person would require different levels of funding

• collaborate with neighbouring local authorities when reviewing and developing their top-up funding bands, with a view to bringing more consistency to the levels of top-up funding for schools and colleges used routinely for placements by more than one local authority

7.5 Resolving funding disagreements     

Schools, colleges and local authorities should work together to avoid and resolve disagreements about commissioning arrangements and the top-up funding for the placement of individual children and young people. In addition to following the principles outlined above, the following points of guidance should help in preventing disputes and resolving any that arise:

• local authorities’ responsibilities for decisions on top-up funding should be discharged fairly, reasonably and after proper consultation, recognising that at every level, different types of school and college are also accountable for their spending

• in the case of children and young people with EHC plans, the statutory annual review process should also be an opportunity to review the funding arrangements in the light of evidence about an individual’s needs, their progress and any changes to the provision they require

• many local authorities use multi-agency panels to provide advice on decisions relating to EHC plans, placements and high needs funding. This can be an important way to ensure area-wide approaches (such as funding bands) are applied consistently and fairly in individual cases. Such panels can only be advisory: decisions on placements, provision and funding must remain with an officer of the local authority

Where a funding dispute remains unresolved, a local dispute resolution protocol can help to resolve this in a timely manner, if the dispute is not resolved, the complaint may be considered by the Local Government and Social Care Ombudsman (LGSCO) if appropriate.

All stages of the local authority’s complaint  procedure(s) should be fully documented before a complaint to the Secretary of State is considered.

7.6 Other information relating to top-up funding  

The department is planning to produce separate guidance shortly on how the requirements of the Procurement Act 2023 interact with the high needs commissioning and funding arrangements.   

Pupils and students should only be counted as having high needs for funding purposes (and be recorded on the school census or ILR as such), if the local authority has determined that top-up funding is payable for that pupil or student. A pupil or student should not be recorded as having high needs unless the local authority has made such a determination, even where a school or college has assessed a pupil or student as requiring additional support from the local authority’s high needs budget, or where a pupil or student has been offered a high needs place by that school or college. In such circumstances, the school or college should use its best endeavours to make the special provision for the pupil or student, seeking advice from the local authority, if necessary, as to what additional support the pupil’s EHC needs or other assessment may have indicated is appropriate.

If a pupil or student’s placement is interrupted temporarily for public health reasons, for example, because a school or college has had to partially close, the school or college should contact the commissioning local authority to discuss alternative arrangements for their continuing access to education and support and for the continuation of top-up funding for the provision being made. If an absence is expected to be long-term, because a public or personal health issue affects the young person’s attendance and ability to engage in their education, the local authority should review the EHC plan and if necessary, amend it to name a different suitable placement.

8. Local authority high needs central services and support

While the majority of a local authority’s high needs budget is spent on place and top-up funding for schools and colleges, local authorities can also use high needs funding to provide additional or targeted support for children and young people with SEND, as permitted under schedule 2 of The School and Early Years Finance (England) Regulations. This can take the form of preventative and early intervention support services, and access to specialist services or expertise commissioned by the local authority, as well as additional funding to schools and colleges.

Specifically, to support the new government’s ambition for a more inclusive mainstream education system, the regulations allow local authorities incur expenditure and target funding for the purposes both of encouraging the education of children and young people with SEN at mainstream schools, and of collaboration between special and mainstream schools to enable those with SEN to engage in mainstream school activities. 

As in previous years, the amount that the local authority plans to spend on such support and services should be included on the local authority’s s251 budget statement. The actual expenditure should be reported on the same basis in the authority’s s251 outturn statement. The schools forum is expected to discuss the details, including funding and effectiveness of these services.  

8.1 Specialist support services  

Specialist support services can play an important role in enabling mainstream schools and colleges to meet a wider range of special educational needs and supports the presumption in law that all children and young people should be educated in mainstream provision, unless they require more specialist provision, as determined through the statutory EHC assessment process.  

If mainstream provision is to meet a wide range of SEND, it is important that mainstream schools and colleges have access to high-quality specialist support, for example, to help children and young people who have:  

• autism spectrum disorder  
• speech and language needs  
• social, emotional and mental health needs 
• sensory impairment 
• challenging behaviour associated with their SEND 

This typically involves specialist teachers with expertise in supporting pupils with complex needs who are available to advise, train and support other teachers and special educational needs co-ordinators (SENCOs) in mainstream schools and colleges. For example, support could be provided through networking and targeted training or commissioned from a specialist provider. 

It is important that such support is available to mainstream schools (maintained schools, academies and free schools), general FE colleges, sixth form colleges and 16 to 19 academies. They are all statutorily required to identify the SEN of their children and young people and to use their best endeavours to make sure that a child or young person who has SEN gets the support they need. 

Local authorities and mainstream schools and colleges should discuss how such specialist support should be delivered when considering how to spend the high needs funding available to them. Many local authorities employ specialist teachers, funded directly from their high needs budget. Others give special schools additional funding to provide specialist support to other schools and colleges. Such arrangements are frequently accompanied by a service level agreement confirming what will be delivered in return for the additional funding. 

Specialist support for pupils at risk of suspension or permanent exclusion may be commissioned by the local authority or by schools (using funding devolved by the local authority). Further information on centrally commissioned AP services can be found in the ‘Alternative provision’ section below. 

High needs funding cannot be used for local authorities’ costs in relation to SEND administration, assessment, co-ordination and monitoring, as per schedule 1 of The School and Early Years Finance (England) Regulations. For example, educational psychologist costs for the identification of children and young people with SEND, the assessment of EHC needs and the preparation and review of EHC plans, cannot be charged directly to the DSG. Annex 6: health and social care costs provides further guidance on the funding of health and social care costs.

9. Funding overview by education setting type 

9.1 Early years provider settings 

The department funds local authorities to deliver the early years entitlements using early years national funding formulae. The 2024 autumn budget confirmed £1.8 billion in 2025 to 2026 to support the expansion of the entitlements. This means the planned budget for childcare entitlements in 2025 to 2026 will be over £8 billion. 

Local authorities are then responsible for setting individual provider funding rates in consultation with their providers and schools forum, and fund providers using their local funding formula. From 2025 to 2026, local authorities are required to plan to pass through at least 96% of their funding received from the government to early years providers. This new 96% requirement will apply separately to the entitlements for: 

• 9-month-old children up to 2-year-olds of eligible working parents 
• 2-year-old children of eligible working parents 
• 2-year-old children from families receiving additional support 
• 3 and 4-year-olds (universal and additional hours) 

For 3 and 4-year-olds, whilst the minimum pass-through requirement is increasing, there is no change to the approach of how this will be calculated, and the pass-through requirement will apply to the universal and additional hours in combination. For 2-year-olds and under, the requirement will apply to each of the entitlements individually. This means that local authorities cannot meet a combined pass-through requirement on the 2 separate entitlements for 2-year-olds. 

The early years entitlements: local authority funding operational guide 2025 to 2026 includes more information on how the early years block funding is allocated to local authorities and should be distributed to providers to deliver the early years entitlements. 

9.1.1 High needs funding in early years 

Children aged 0 to 5 with more complex needs and those with an EHC plan are also eligible to receive funding from local authorities’ high needs budgets, funded from the high needs block of the DSG.  

Local authorities can meet the costs of children aged 5 and under with high needs in different ways from their high needs budget. These may include SEN support provided directly as a central service for young children with high needs and resources for early years providers to enable them to make the required provision. Place funding may also be used for early years provision, for example, at special schools, supplemented by top-up funding for individual children.  

9.1.2 Special educational needs inclusion fund (SENIF) 

All local authorities are required to have special educational needs inclusion funds (SENIFs) for all eligible children with SEN taking up any of the free entitlements, regardless of the number of hours taken. These funds are intended to support local authorities to work with providers to address the needs of individual children with low level or emerging SEN who are taking up the entitlements. The structure also supports local authorities to undertake their responsibilities to strategically commission SEN services as required under the Children and Families Act 2014.  

Local authorities can establish their SENIFs using funding from the early years block and/or the high needs block of their DSG allocation. Although local arrangements will vary, local authorities should consider the right balance to strike in drawing from these 2 blocks of funding, taking into account the particular pressures on high needs and early years budgets locally.  

9.1.3 Disability access funding 

As set out in the early years entitlements: local authority funding operational guide 2025 to 2026, the disability access fund (DAF) supports eligible disabled children’s access to any of the entitlements.  

9.2 Mainstream schools, academies and free schools 

Mainstream schools without SEN units or RP are funded for pre-16 pupils with SEN as follows:  

• core funding: included within the local schools funding formula  
• top-up funding: agreed and paid on a per pupil basis by the commissioning local authority  

High needs place funding is only available in pre-16 provision to mainstream schools with SEN units or RP. It is available for mainstream schools with sixth forms in the same way as for other post-16 provision.  

Maintained mainstream schools will receive notification of their core funding allocations of pre-16 funding for the new financial year beginning in April, by the end of the prior February. Mainstream academies and free schools will receive notification by the end of March, before the subsequent academic funding year starting in September.  

The core funding for mainstream schools includes funding for pupils with SEND, whose additional support costs are lower than £6,000. Maintained schools and academies should have sufficient funding in their delegated budget to enable them to support pupils with SEN as required, up to the mandatory cost threshold of £6,000 per pupil per annum.  

For pupils aged 5 to 15 years in mainstream schools, a notional SEN budget is identified, and the amount should be shown in a maintained school’s budget notification and is included in an academy’s general annual grant (GAG) notification. This is an indicative amount that schools may use as a guide for how much they might need to spend on supporting their pupils with SEND. The notional SEN budget for mainstream schools operational guide for local authorities explains how their schools’ notional SEN budget can be calculated using local funding formula factors, with the aim of achieving greater consistency in that calculation.  

Local authorities should review their schools’ notional SEN budget calculation for 2025 to 2026 in line with that guidance, to ensure that the budget identified is reasonable as a guide to what schools might need to spend on additional support for their pupils with SEND, taking into account costs up to £6,000 per pupil. Where there is a disproportionate number of pupils with SEND in a school, additional funding may be provided outside the main funding formula, as explained below.  

9.2.1 Additional funding for mainstream schools  

Local authorities can provide additional targeted funding from their high needs budget, and outside the main funding formula for mainstream schools and academies on a consistent and fair basis, where:  

• there is a disproportionate number of pupils with SEND, and/or with more complex SEND (for example, a primary school may have developed a particular expertise or facility for meeting the needs of high achieving pupils with autism, or pupils with physical disabilities, resulting in more pupils with these needs being admitted)

• that number cannot be reflected adequately in the funding they receive through the local funding formula  

They should define the circumstances in which additional funding will be provided from their high needs budget, through a formula or other methodology agreed with schools. In all cases, the distribution methodology should be simple and transparent, and devised so that additional funds are targeted only to a minority of schools which have particular challenges because of their disproportionate number of pupils with SEN and/or high needs, or their characteristics. 

The criteria and budget should be included in the additional factors/commentary section of the APT, and the budgeted and outturn expenditure included in line 1.2.4 (additional high needs targeted funding for mainstream schools and academies) of the s251 returns.  

Where individual pupils require additional support costing more than £6,000, the excess should be met by top-up funding associated with the individual pupil. 

9.2.2 Sixth forms in mainstream schools 

Mainstream school sixth forms are funded for their core funding per student based on the 16 to 19 funding formula (sometimes referred to as element 1) and £6,000 per high needs place (element 2). Funding to support students whose additional support costs are lower than £6,000 is provided through the disadvantage factor of the mainstream 16 to 19 funding formula allocation. Local authorities should assume a national average amount of £6,400 for element 1 for the 2024 to 2025 academic year. This amount comprises the 16 to 19 national funding rate for the 2024 to 2025 academic year, which is £4,843, and additional funding allocated through the 16 to 19 funding formula.  

High needs place funding (element 2) is available to schools for students with SEN requiring additional costs exceeding £6,000. Local authorities should have engaged with their mainstream schools with sixth forms to agree place numbers. Local authorities also have flexibility to agree alternative ways of calculating this element of high needs funding with maintained schools, academies, and free schools. Further information can be found within  the high needs place funding: local flexibility to allocate differently section.  

The department does not require information on changes to places funded in maintained schools, as local authorities fund these directly and have local flexibility to change the number of places, as well as the method of calculating the allocation. Local authorities should, however, notify the department of changes to place numbers for academies and free schools, to ensure that they are funded on the correct basis as part of the annual place change process.  

As explained for pre-16 pupils, where individual pupils require additional support that costs more than £6,000, the excess should be met by top-up funding associated with the individual pupil.  

9.2.3 Special educational needs (SEN) units and resourced provision (RP) in mainstream schools  

Many maintained mainstream schools and academies have SEN units and/or RP attached, offering specialist provision formally recognised by the local authority where the school is located and with high needs places funded by that authority. Both SEN units and RP are usually for pupils with an EHC plan, but may also provide for pupils without an EHC plan, and often cater for a specific type or types of SEN. They sometimes accommodate pupils registered at other schools on a part-time basis. 

SEN units are special provisions within a mainstream school where the pupils with SEN are taught within separate classes for at least half of their time. 

RP consists of places that are reserved at a mainstream school for pupils with a specific type of SEN, taught for at least half of their time within mainstream classes, but requiring a base and some specialist facilities around the school. 

Mainstream schools are funded for  SEN units and RP  through:  

• pre-16 core funding:  

  • a combination of per-pupil funding through the local schools funding formula, plus £6,000 per place for those occupied by pupils on roll (that is, recorded on the school census as sole or dual (main) registered at the school  

  • £10,000 per place for places that are or will be occupied by a pupil registered on the roll of another school, places not occupied at the time of the school census count, but which are likely to be filled and require funding or places for capacity required for another local reason)  

• post-16 core funding: element 1 (based on the 16 to 19 funding formula) plus element 2 (£6,000 per place) based on the number of places to be funded  

• top-up funding for pupils with high needs, whose additional support costs more than £6,000, paid by the resident local authority commissioning the placement(s) 

In the case of place numbers for maintained schools with SEN units and RP, the provider local authority that maintains the school determines the total number of places to be funded, taking full account of places that may be commissioned by other local authorities.  

The department confirms: 

• the number of funded high needs places in mainstream academies and free schools following the annual place change notification process 

• the place funding amount rate, based on occupancy data provided in the APT 

The total number of places funded is based on the outcomes from the place change notification process. The number of places funded at £6,000 per place is calculated based on the number of places occupied by pupils on-roll of the school or academy, as recorded in the APT. This would not exceed the total number of funded places.  

For example, if funding for 10 places was agreed through the place change process, and 12 places were recorded as occupied in the APT, 10 places would be funded at £6,000 per place. This is because we use the place change process to determine the place numbers, not the APT.  

The number of unoccupied places, funded at £10,000 per place, is calculated as the funded places (via the place change process), minus the number of occupied places recorded in the APT. This funding will not be below zero. In the example above, there are no unoccupied places, given the total of occupied places is the same as, or above the number notified as part of the place change process.  

Where there are provision changes such as a new SEN unit or RP at an academy or free school, this must first be approved through the significant change process. Supporting guidance on opening, closing and making changes to schools is also available. A signed deed of variation must be received from the academy trust so place funding can be reflected in the 2025 to 2026 academic year allocation from the department, as notified through the annual place change process.   

Depending on the range and type of services on offer, it is also possible for such provision to be a centrally funded service commissioned by the local authority, normally under a service level agreement with the school or academy. If such an agreement is with an academy, this would be a local arrangement with the SEN unit or RP funded directly by the local authority rather than via the department. More information is included in the 2025 to 2026 place change technical note.

9.3 Maintained special schools, special academies and special free schools  

Pre-16 and post-16 high needs places at maintained special schools, special academies and special free schools are funded at £10,000 per place. Details of how the annual place numbers are determined is detailed in the high needs place funding section and supporting guidance.    

Maintained special schools are notified of their place funding allocations for the financial year 2025 to 2026 (that is, their budget shares) by their local authority (by the end of February 2025). Special academies and free schools receive their funding allocations from  the department (by the end of March 2025), in advance of the academic year.  

Funding for special school growth following the annual place funding allocation is covered in the ‘Where pupil and student numbers differ from funded places’ section.  

The department provides additional place funding to local authorities for new and growing special free schools to cover the cost of their period of growth, ensuring there is no additional cost to the local authority.  

For those special free schools that have reached the end of their period of growth, additional funding has been included in local authorities’ baselines, informed by data from the previous academic year.  Further information can be found in the special free schools adjustments: a guide for local authorities.  

In addition, maintained special schools, special academies and special free schools receive per pupil top-up funding paid by the commissioning (resident) local authority.  

9.3.1 Special schools minimum funding guarantee 

A special school protection, otherwise known as the MFG, will continue to apply to maintained special schools and special academies (including special free schools but excluding NMSS and independent schools) in 2025 to 2026. The MFG to be operated by local authorities for 2025 to 2026 must be 0% using their schools’ 2024 to 2025 funding baseline. The local authority must have a disapplication request approved to use a negative percentage.  

This means that no special school will receive from their provider local authority less funding per pupil in 2025 to 2026 on a like-for-like comparison with their pupil cohort in 2024 to 2025, unless a disapplication request has been approved. The calculation should assume that the number and type of places remains the same between 2024 to 2025 and 2025 to 2026. It should also assume that all pupils in the school are placed by the provider local authority (usually, where the school is located) and that all top-up funding rates received by the school are those set by that local authority.  

See annex 3: special schools minimum funding guarantee for further information on the MFG protection, including worked examples.  

9.3.2 Special schools additional funding streams 

Special schools must also receive the 2025 to 2026 CSBG, which combines the full-year equivalent of the 2024 to 2025 CSBG with the 2024 to 2025 TPAG and TPECG from their provider local authority. In addition, they must receive high needs funding that is equivalent to the historic teachers’ pay and pensions grants, and a continuation of the additional funding first received in 2023 to 2024. See annex 4: historic teachers’ pay and pensions funding and additional funding, for details of how this additional funding is to be calculated by local authorities.

Table 4 below summarises the various funding streams that are relevant for these special schools.

Table 4: main funding streams for special schools’ core staffing and other running costs

Funding element	Value	Data used	Inclusion in 2025 to 2026 MFG
Place funding	Flat rate £10,000 per place	Number of places decided by provider local authority, in consultation with school	Yes
Top-up funding	Variable, may depend on local system of funding bands	Should reflect the cost of provision in excess of the place funding, necessary to make the provision that has been commissioned	Yes
Historic teachers’ pay and pensions funding (previous TPG and TPECG)	Locked at 2020 to 2021 value per place	Number of places decided by local authority, in consultation with school	No, this is a separate high needs funding stream, not to be included in the MFG calculation
Additional 3.4% funding equivalent to mainstream schools additional grant (MSAG)	Locked at 2023 to 2024 value per place	Number of places decided by local authority, in consultation with school	No, this is a separate high needs funding stream, not to be included in the MFG calculation
CSBG (consolidated grant for 2025 to 2026, incorporating pay and pensions funding allocated as separate grants in the previous year)	Value of grant, determined by local authority in consultation with schools, though 100% of  CSBG must be passed on	Local authorities may use national amount per place or vary that to take account of schools’ actual costs	No, this is a separate high needs funding stream, not to be included in the MFG calculation

9.4 Non-maintained special schools

NMSS receive place funding directly from the department and are subject to a grant funding agreement. All NMSS places (pre and post-16) are funded at £10,000 per year.

The department bases NMSS place funding allocations on the pupil number data from the latest October school census, uplifted by the difference between the previous year’s October and January census pupil number data. Only pupils resident in England and within the school’s age range are included in the calculation. If there is a reduction in the number of pupils between the October and January census, the department does not reduce funding. This ensures that no school is funded on numbers less than those recorded in their latest October census. If a school predicts that they will have significantly more pupils than the number of places on which their funding is calculated, and they have concerns about how provision for those pupils will be funded, they should contact the department via the Customer Help Portal.

In addition, NMSS receive top-up funding paid by the commissioning local authority, as well as historic teachers’ pay and pensions high needs funding, and a CSBG allocation directly from the department. 

From 1 January 2025 local authorities’ top-up funding for NMSS in respect of individual pupils’ placements will be subject to VAT. Under section 33 of the VAT Act, local authorities are able to reclaim the VAT they pay. Any invoices submitted to local authorities will therefore need to identify VAT clearly.

9.5 Independent schools

Independent schools, including independent special schools and independent AP, sit outside the high needs place funding system. Where a local authority has commissioned a place in an independent school, the local authority is responsible for funding the school from their high needs budget to reflect the full cost of provision for that child or young person with SEND, rather than the school having an allocation of place funding and top-up funding. Much of the guidance relating to top-up funding will be relevant in local authorities’ decisions about their funding for independent schools. The total expenditure on these placements should be included in the relevant high needs top-up funding line of each local authority’s s251 returns.  

Only educational costs (including deemed educational costs) should be funded by the DSG. In some cases, the integrated package of support will be costed and charged through a single fee. The department encourages schools to be clear, and where requested provide evidence, about which elements of provision (and therefore, cost) should be attributed to education, health and social care so that the local authority can charge non-educational costs to the responsible partners. Further information can be found in annex 6: health and social care costs.  

From 1 January 2025 the fees charged for placements in independent schools will be subject to VAT. Under section 33 of the VAT Act, local authorities are able to reclaim the VAT they pay.  Any invoices submitted to local authorities will therefore need to identify VAT clearly.  

CSBG funding to local authorities includes an amount based on SEND placements in independent schools, as recorded in each local authority’s alternative provision census return. This grant is to support a continuation of any increase in fees charged by independent schools for the 2024 to 2025 financial year period as a result of the 2024 teachers’ pay award and pension employer contribution rate increase, and other staff salary increases. 

9.5.1 Parental placements in independent schools

In the event that a child’s parents make suitable alternative arrangements for their child’s education (for example, by making a private fee-paying placement in an independent school), the local authority’s duty to secure the special educational provision specified in the EHC plan will not apply. The local authority must assure itself that the alternative arrangements are suitable and has the option of providing discretionary top-up funding to ensure they are suitable. More information about how local authorities should discharge their responsibilities for children and young people with SEND in independent schools is set out in the SEND code of practice, in particular paragraphs 9.131 to 9.136.  

9.5.2 Unregistered independent schools

Where a local authority is considering placing a child or young person with an EHC plan on a full-time basis in independent provision, they must ensure the setting is properly registered with the department before any placement is made. Any provision that provides full-time education for 5 or more pupils of compulsory school age, or for one or more pupils of compulsory school age who have an EHC plan or are looked after by a local authority and which is not a maintained school, or a non-maintained special school will be considered an independent school. All independent schools must be registered with the Secretary of State. Further information on the process can be found at independent school registration.  

It is an offence to conduct an unregistered independent school, and anyone who does so is liable on summary conviction to a fine and/or imprisonment. Local authorities making use of unregistered provision for the purpose of providing full-time education to children with EHC plans may prejudice future prosecutions of unlawfully operating settings.

9.6 General further education (FE) colleges, sixth form colleges, 16 to 19 academies and maintained schools and independent learning providers

General FE colleges, sixth form colleges, ILPs and 16 to 19 maintained schools and academies receive core funding based on an amount per student calculated using the 16 to 19 funding formula (element 1) and, for their students with high needs, £6,000 per high needs place (element 2). Top-up funding for students with high needs (element 3) is paid directly by the local authority commissioning the place.

Element 1 funding, based on student numbers, is allocated directly by the department to colleges (or via the provider local authority for 16 to 19 maintained schools) for students aged 16 to 19 and those aged 19 to 25 with EHC plans. The number of students and amount of funding paid has no impact on local authorities’ high needs allocations through their DSG. Funding to support students with SEN where additional support costs are lower than £6,000, is provided through the disadvantage factor of the mainstream 16 to 19 funding allocation, since these students do not count as students with high needs.

For the 2024 to 2025 academic year, local authorities should assume a national average amount of £6,400 for element 1. This amount comprises the academic year 2024 to 2025 national funding rate, which is £4,843 and additional funding allocated through the 16 to 19 funding formula.

The number of high needs places (element 2) funded at £6,000 per place for the 2025 to 2026 academic year is determined through the place change process. As indicated above, it is essential that the provider local authority (that is, the one in which the main college or provider headquarters is located) discusses with their colleges how many places should be funded. Further information about how place funding works, including where students exceed place numbers, can be found in the ‘High needs place funding: local flexibility to allocate differently’ section.

FE colleges may also agree an alternative method of calculating this element of funding with their provider local authority (that is, a calculation that is not necessarily a number of high needs places multiplied by £6,000), subject to the requirements outlined in the high needs place funding: local flexibility to allocate differently section.

There are a number of situations where a 14 to 16-year-old may be studying in a college. These could be:

• students who achieved a level 2 qualification early and are choosing to enrol on a full level 3 course, and home-educated students are counted as 16 to 19-year-olds. Such students are funded alongside 16 to 19-year-olds via the 16 to 19 funding formula for element 1 and £6,000 per place for element 2

• students enrolled in a maintained school or academy but studying part-time in college are not funded as 16 to 19-year-olds, as the maintained school or academy will receive funding in respect of these students via the pre-16 process applicable to that school

• some colleges are eligible to be directly funded by the department for 14 to 16-year-olds

  • these students should be recorded in the ILR accordingly and will be funded for element 1 via the 16 to 19 formula using a separate process. For element 2, these students are counted as 16 to 19-year-olds and funded at £6,000 per place using the same process as for 16 to 19-year-olds. Further details for FE colleges on funding for directly recruited 14 to 16-year-olds in colleges can be found in the enrolment of 14 to 16 year olds in FE guidance.

Further information on high needs top-up funding (element 3) is set out in the high needs top-up funding section.

9.7 Special post-16 institutions (SPIs)

SPIs can receive all their funding from local authorities, for students with SEN placed by a local authority in the college. To be eligible to receive high needs place funding from  the department, however, SPIs must either have already been in receipt of programme funding from the department through the 16 to 19 funding formula (that is, element 1) or have successfully completed the high needs funding: due diligence process for SPIs. To receive place funding from the department, such SPIs must have been proposed by a local authority through the annual place change notification process. Their allocations are determined by the place numbers returned by the local authority in which they are located, through the place change notification for the first year.

All  SPIs in their second year onwards of receiving place funding from the department are allocated funding (element 1 and element 2) based on their ILR R06 return. More information on how element 1 is calculated can be found in the 16 to 19 special post-16 institution revenue funding allocations guide. Element 2 is £6,000 per place and is calculated using the number of students flagged in the ILR as being in receipt of top up funding. In addition, they receive top-up funding paid by the resident local authority that has commissioned the place for a student. Further information can be found in the ‘High needs place funding’ and ‘High needs top-up funding’ sections.  

If the number of high needs students recorded in the academic year 2025 to 2026 ILR R04 return is greater than their funded places, SPIs may receive an in-year growth award as part of the annual exceptional in-year growth process, subject to affordability and meeting the annually agreed criteria. This is a data driven process and no business case is accepted, except those relating to data errors. The department publishes the criteria for calculating elements 1 and 2 of the in-year growth for  SPIs once decisions have been made for the academic year in question - this is normally during that academic year.  The department has published the 16 to 19 funding in-year growth for 2024 to 2025 (academic year) criteria.  

From 1 January 2025 fees charged for placements in SPIs may be subject to VAT. The new VAT rules apply to a SPI: 

1. Which is wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age but under 19. 

2. At which full-time education is provided for such persons. 

3. Where the provision of full-time education falling within sub-paragraph (2) is wholly or mainly provision in respect of which fees or other consideration are payable.

4. Which is not an independent training or learning provider.

Under section 33 of the VAT Act, local authorities are able to reclaim the VAT they pay.  Any invoices submitted to local authorities will therefore need to identify VAT clearly.   

9.8 Centrally funded exceptions (CFE)  

There are a small number of post-16 FE colleges and ILPs funded directly by the department that do not have their allocations agreed as part of the main place change process. Their 2025 to 2026 academic year place funding will be based on the number of high needs students recorded in their academic year 2024 to 2025 ILR R06 return.  

If the number of high needs students recorded in the academic year 2025 to 2026 ILR R04 return is greater than their funded places, they may receive an in-year growth award as part of the annual exceptional in-year growth process, subject to affordability and meeting the annually agreed criteria. This is a data driven process and no business case is accepted, except those relating to data errors. The department has published the 16 to 19 funding in-year growth for 2024 to 2025 academic year criteria.

10. Alternative provision (AP)  and hospital education 

When children of compulsory school age are not receiving suitable education, the local authority has a duty, under section 19 of the Education Act 1996 to arrange it.  

When arranging AP, the commissioner should clearly define the nature of the intervention, its objectives, and the timeline to achieve these, accounting for any statutory SEND responsibilities, especially when an EHC plan is in place.  

A child may be placed in an alternative setting for a period of time because of a suspension or permanent exclusion or where a child has health-related needs, which mean they are unable to attend a mainstream school full-time. Many schools make use of AP services, before the need for suspension or permanent exclusion arises. In most cases the intention is for these children to return to their mainstream school and the length of the placement should be determined by the needs of the pupil.  

When local authorities make arrangements for AP (including hospital education), this is normally funded from their high needs budget. There is flexibility for local authorities to devolve some decision-making and funding for AP to schools, and there is evidence to show that this can be effective in promoting inclusion and accountability. Where a pupil remains on-roll of a mainstream school, the school is effectively acting as a commissioner of  AP and retains accountability for the child’s education. For example, where a pupil is suspended from a mainstream school for longer than 5 school days, the school is responsible for commissioning and funding AP  from the sixth school day of the suspension.  

10.1 Organising and funding AP  

Local authorities, schools and academies use AP to discharge their statutory responsibilities in different ways. When reviewing and determining commissioning, funding of AP should take account of the needs of local schools in determining the demand for AP and how it is delivered and encourage schools to think collectively about their use of AP and how the full cost of provision is to be met. Many local areas have developed strong partnership arrangements which seek to share responsibilities across schools for AP commissioning, funding, and accountability. Such arrangements can include the local authority devolving some decision-making and funding to groups of schools.  

Funding devolved to schools, including AP schools, or partnerships of schools remains as a central budget under the local authority’s central control, and the terms of its use should be covered by a service level agreement or memorandum of understanding with the maintained schools and academies involved. As with other elements of high needs funding held centrally, under the conditions of grant associated with the DSG, the local authority must treat maintained schools and academies on an equivalent basis and make sure that any distribution of such funds is fair and reasonable.  

The local authority should make sure that there is consultation with the schools forum on the way AP funding is used and distributed. The schools forum regulations are intended to ensure that the arrangements for AP funding are properly discussed at local level – with engagement not only from the local authority, but also from the mainstream maintained schools and academies, PRUs and AP academies and free schools. This is explained in the schools forum operational and good practice guide.  

The regulations and schemes for financing schools do not permit local authorities to make a differential charge on maintained schools’ and academies’ budget shares according to their use or intended use of AP. It is possible, however, to use funds relating to pupils leaving the school roll, which have been deducted from maintained schools’ following the redetermination of their budget shares under regulation 39 of The School and Early Years Finance (England) Regulations, or under the similar arrangements with academies to offset some of the cost of places. This is explained further in annex 7: permanent exclusions: funding adjustments.  

10.2 How high needs funding is allocated to AP  

AP can receive high needs funding in different ways through:  

• core funding: the annual allocation of funding based on an amount per place (place funding), which a school receives either directly from the provider local authority (for PRUs, based on the financial year), or from the department (for AP academies and AP free schools, based on the academic year)  

• top-up funding: the funding required over and above the core or place funding, to enable a pupil to participate in education (especially when an EHC plan is in place) is paid by the local authority or school that commissions each place  

• service funding: locally negotiated funding for AP services, such as outreach, which are outside the place funding and top-up funding model, usually based on a service level agreement  

Core funding provides some certainty for schools, but a stable income and financial viability will continue to depend on:  

• developing strong relationships with local authorities and schools that commission places  

• working out with commissioners, top-up funding rates that reflect the costs, including (for example) the costs of under-occupancy when places are not filled. See the section on agreeing top-up funding for AP below  

• where appropriate, developing commissioned services that can provide an income from local authorities and schools on a longer-term basis (for example, through a 2 or 3 year contract)  

PRUs,  AP academies and AP free schools must receive from their provider local authority the 2025 to 2026 CSBG, as well as high needs funding that is equivalent to the previous teachers’ pay and pensions grants, and a continuation of the additional funding received in 2023 to 2024. See annex 4: historic teachers’ pay and pensions funding and additional funding, for details of how the additional funding is calculated.  

Post-16 students in PRUs, AP academies and AP free schools are not funded in the same way as pre-16 students. AP is, by definition, set up to educate children of compulsory school age (up to age 16). A school will therefore not receive AP place funding for post-16 students because this type of provision is out of scope. If an AP school has post-16 high needs students with SEND, usually with an EHC plan, these places can be funded on the same basis as post-16 students with high needs in mainstream schools (using a combination of funding through the post-16 funding formula, £6,000 per place and top-up funding).  

Where the local authority commissions a place at a PRU, AP academy or AP free school, the top-up funding is allocated from the local authority’s high needs budget.  

Where a school commissions a place at a PRU, AP academy or AP free school, the top-up funding may come from centrally held high needs funding that has been devolved to that school or a local partnership of schools (for example, via a service level agreement), or from the a maintained school’s delegated budget share or academy’s general annual grant.  

It is in the interests of the local authority and its schools offering AP to agree the referral process and process for resolving concerns about admissions. If the local authority is unable to place a particular pupil because they are not suited to the type of provision offered by a PRU, AP academy or AP  free school, they would need to make other arrangements.  

10.3 Place funding for PRUs, AP academies and AP free schools  

Each PRU, AP academy or  AP  free school usually has a number of places to offer pupils excluded by schools or who cannot get a school place for other reasons. In this case the commissioner would normally be the local authority. Many AP schools will also have places for pupils who are on part-time or shorter-term placements. In many cases local schools would be the commissioner for these places.  

Although we have not defined a place in the regulations, we expect that a place will generally be available for occupation by a full-time equivalent (FTE) pupil. We recognise that in AP, places may not be filled by the same individual throughout the year, or in some cases, across the week. Identification of AP places is not determined by pupils’ registration status. Where pupils are dual registered with a mainstream school, the time they spend attending a PRU, AP academy or AP free school should be accounted for in the number of places identified.  

Whilst it is important that AP schools are not overfunded where places are not required, there will be occasions when places remain unoccupied, for example, to accommodate unpredictable fluctuations in demand. There will also be places that are occupied by more than one individual attending on a part-time basis. For example, a place may be filled by a child who attends for 2 days a week from one school, and another child who attends for 2 days from another school, with no child present for one day a week. AP schools should also consider with their local authority how to direct resources into outreach work in mainstream schools.  

It may not be appropriate to provide place funding for some AP services where children are receiving their education offsite, such as a home tuition service or an outreach service provided by teachers whose base is the PRU or AP academy/free school. These services should be funded through a service level agreement with the commissioning local authority or school. 

As in previous years, pre-16 AP places will be funded at £10,000 per place in 2025 to 2026, regardless of whether the place will be commissioned directly by a school or by a local authority.  

The provider local authority is responsible for agreeing and submitting the number of AP places to be funded in PRUs and AP academies, in consultation with those schools in the area which may need to commission places. This may require consultation with other local authorities and their schools if they are likely to commission places in the PRU or AP academy. As explained previously, post-16 students are funded on the same basis as post-16 students in mainstream schools.  

Local authorities have flexibility to change the number of places they fund in 2025 to 2026 at PRUs and should only notify the department of changes to the place numbers in AP academies, using the 2024 to 2025 place change notification process. The department will contact  AP free schools directly in November 2024 detailing how their 2025 to 2026 high needs place numbers will be determined. Evidence to support changes in place numbers may be required, and the department recommends that PRUs, AP academies and AP free schools engage early with local authorities and schools commissioning places.  

As with special academies, 2025 to 2026 places funded at AP academies are deducted from the DSG of the local authority in whose area the academy is located, and the department funds the places directly.  

10.4 Place funding for AP free schools 

Place funding for new AP free schools for the first 2 years is based on their financial plan. The department reviews actual pupil numbers against planned places (occupancy) and under-occupancy in year 1, which may have an impact on the place numbers funded for year 2.  

Beyond year 2, the number of funded places is determined by the department annually using evidence of occupancy (pupil numbers) and commissioning evidence from local authorities and schools. The department writes to all AP free schools in the autumn term to begin the place process for the following academic year.  

10.5 AP free school deductions  

For AP free schools, deductions for the 2025 to 2026 academic year are made from the DSG of the local authority where the pupil lives (based on October 2024 school census data). These deductions will be notified to local authorities (April 2025). No deduction is made for places in AP free schools opening during the 2024 to 2025 or 2025 to 2026 academic years. However, a deduction is made from the DSG for places in AP free schools open before or during the 2023 to 2024 academic year.  

AP academies and AP  free schools should receive notification of their 2025 to 2026 allocations of place funding from the department (by the end of March 2025) and PRUs from their local authority (by end of February 2025).  

The deductions for 2025 to 2026 financial year are made up of 2 parts: five-twelfths of the 2024 to 2025 academic year and seven-twelfths of the 2025 to 2026 academic year. 

10.6 Top-up funding for AP (including examples) 

Top-up funding for AP is not usually related to an assessment of SEN. A standard top-up funding rate is often set for each PRU, AP academy or AP free school, which reflects the overall budget needed to deliver the provision for pupils and students attending. The principles of local authorities working constructively with schools and AP providers to co-produce transparent local arrangements for the provision offered and the expected cost rates (as set out in collaboration between local authorities, schools and colleges to organise local authority top-up funding section) are as important for AP as for any other form of high needs provision.  

Cost transparency is an important feature of the high needs funding arrangements. Local authorities and schools should be aware of the full cost of AP in different schools, and placement decisions should be made based on the cost and quality of what is on offer. The local authority should publish clear information about how AP is funded, including top-up funding rates for PRUs and AP academies, and clarity about which organisation is responsible for providing the top-up funding and place funding for AP. When determining top-up funding, local authorities should take account of the overall budget required for the AP to remain financially viable. Local authorities should consult with the schools forum on providing PRUs,  AP academies and AP free schools with increases in top-up funding rates comparable to those that are being considered for maintained special schools and special academies. 

There is often a very fluid movement of pupils and students in and out of AP during a year. The extent of this movement can create uncertainty and volatility in an AP school’s budget planning. Local authorities should recognise such fluctuations and trends to inform a more transparent and simplistic mechanism for administering the distribution of top-up funding.  

One such example is where, at the beginning of the year, the AP school and its main commissioning local authorities and schools agree an estimate of the places they expect to be used. Top-up funding could then be paid on account every month throughout the year and a termly or year-end reconciliation could take place to reflect an actual take-up of places by individual pupils during the period (the difference between estimated and actual uptake). This would give the AP school more certainty over its in-year cash flow, enabling it to employ the staff needed to make the required provision available (recognising that an increase or decrease in pupils may not necessarily directly lead to changes in the number of staff needed). This will ensure a high-quality service throughout the year. The amount and nature of provision can be changed over time to meet local authorities’ and schools’ evolving demand.  

It is important that top-up funding relates to pupils actually occupying places. The aim of the system of place funding and top-up funding is to give a proper balance between sustainable income for the AP school, and flexibility to commission AP that meets the needs of individual pupils. Funding based solely on places, which may or may not be occupied, risks spending scarce resources on places that are not needed either by local authorities nor by schools and academies. It also ties up funding that would otherwise allow decisions to be taken about the most appropriate AP for an individual pupil.  

The department is not prescriptive about how the calculation of top-up funding reflects the period that a child or young person occupies a place. Some AP schools operate based on a daily rate, but it could be more beneficial for planning purposes to calculate the top-up funding using longer periods, for example weekly, monthly, or even termly rates.  

It would also be possible to develop a top-up funding system that more closely reflects the achievement of desired outcomes, as a way of encouraging high quality AP. For example, the AP school could receive an enhanced rate of top-up funding after the end of the placement if the intended outcome for the pupil or student had been achieved. In this example, a mainstream school could be seeking a particular intervention for a year 11 student, which would enable the individual to successfully complete their GCSE exams. It could agree a short-term placement for the student at a local PRU and an additional amount of top-up funding that would be paid after the student’s exam results are known, and if the expected grades had been achieved. Similarly, a local authority may wish to agree that an additional amount of top-up funding is payable if a year 11 pupil is in education, training, or employment in the year after leaving AP. Such arrangements are not mandatory, but could be used to secure better outcomes and improve the quality of AP.  

10.7 Commissioned AP services  

In many cases the services offered by a PRU, or AP academy or free school will not fit neatly into the combination of place and top-up funding intended for full-time educational placements. Teachers at the AP setting may be involved in outreach work with local maintained schools and academies or may be employed by them on a consultancy basis, to advise on behaviour management. The local authority may use a PRU’s staff to provide home tuition to children with medical needs or to provide a service to pregnant teenagers or young mothers who cannot easily attend school. These are examples of services that would normally be funded by the commissioning local authority or school, or group of schools, under a service level agreement that specifies what is required and the funding to be paid.  

Where the local authority commissions the service, the funding would come from its high needs budget.  

Where a school or group of schools commissions the service, the funding would come either from those schools’ delegated budget share, or from centrally held high needs funding that has been devolved to schools. Any distribution of devolved AP  funding should be fair and treat both maintained schools and academies in the same way.  

As with other centrally held AP budgets, the local authority should make sure that there is consultation with the schools forum on the amount retained and how it is used and distributed. For certain centrally held budgets, including for services relating to the education of children with behavioural difficulties and other activities for the purpose of avoiding the permanent exclusion of pupils from schools, the regulations require schools forum agreement to the amount retained.  

10.8 Permanent exclusions adjustments 

Details of the adjustments to schools’ funding when a pupil is permanently excluded or otherwise leaves a school and is admitted to another school or AP can be found in annex 7: permanent exclusions: funding adjustments. 

10.9 Hospital education  

Hospital education is defined in the School and Early Years Finance (England) Regulations as education provided at a community special school or foundation special school established in a hospital, or under any arrangements made by the local authority under section 19 of the Education Act 1996 (exceptional provision of education) where the child is being provided with such education by reason of a decision made by a medical practitioner.  

Although we allocate funding to local authorities for hospital education without reference to the age of the young people receiving the education, local authorities’ duties differ for young people aged 16 to 19. This may affect their decisions on funding education for young people in this age group, such as those in independent hospital schools.  

As in previous years, hospital education should continue to be funded by local authorities based on either an amount per place, or as a centrally funded local authority service. An example of the latter is where the local authority employs teachers directly to work in a hospital or offer home tuition to pupils who are confined to their home, because a medical practitioner has decided that is where they should receive their education.  

Some local authorities commission such services through hospital schools or PRUs. In all cases, local authorities should ensure that there is clarity on how hospital education is provided and funded locally. Local authorities should report their planned and actual expenditure on such provision in maintained schools, or provision funded as a central service, in the relevant tables of the s251 budget and outturn statements.  

Funded hospital education places can be found in maintained special schools (usually a particular type of special school known as a hospital school), maintained PRUs (sometimes known as medical PRUs), special and AP academies and free schools. Often these schools will have a combination of hospital education places and other high needs (AP and SEND) places.  

The School and Early Years Finance (England) Regulations require that hospital education places in maintained schools and PRUs are funded at least at the same level per place as in the previous funding year. This requirement is also reflected in the funding arrangements for hospital education places in academies. The DSG: conditions of grant require local authorities to treat academies the same as maintained schools in their funding arrangements. These requirements will remain in place and be incorporated in the regulations and conditions of grant for 2025 to 2026.  

Local authorities are reminded that the high needs NFF provides them with a 7% increase in hospital education funding, compared with the 2024 to 2025 allocations of hospital education funding. Local authorities should consider carefully, following discussion with their maintained hospital schools, academies, and other providers of hospital education, how much of this increase is passed on to them, taking into account not only any increase in their costs, but also the separate CSBG they will also receive. If a local authority intends to pass on an increase to an academy funded for hospital education places, this must be notified to the department via the 2025 to 2026 place change notification process enquiry window in February 2025.  

The hospital education funding guidance explains the process for those local authorities wishing to apply for additional funding due to new hospital education provision. Local authorities should engage with their maintained hospital schools and academies, other hospital education providers, and the relevant NHS hospital trusts, to plan for 2025 to 2026, including discussion of the education funding implications of changes in medical or mental health provision.  

Medium secure adolescent psychiatric forensic units, which cater mainly for young people aged 16 to 19, are funded using the same hospital education funding methodology of an amount per place no less than their funding per place in the previous funding year.  

Local authorities’ duties may require them to commission hospital education from other independent providers, usually registered as independent schools and not in receipt of funding directly from the department.  

In these circumstances, local authorities would be expected to pay the costs of this education from their high needs budgets. In discharging their duties, the law does not necessarily require local authorities to commission a particular education provider, although decisions about education provision should not unnecessarily disrupt a child or young person’s education or treatment.  

Independent hospital education provision may be funded either as a single service by the local authority in whose area the provision is located or based on the payments for individuals from those authorities where the child or young person normally resides. In both cases, the provider should confirm with the relevant local authority that they are content to commission and fund the education provision.  

If funding is provided as payments for individual children and young people, the provider should receive such confirmation from the local authority in writing (if possible), before delivering the education provision to the child or young person and certainly before requesting any funding.

11. High needs funding: post-16 special circumstances  

Mainstream academy and free school sixth forms, including AP academy sixth forms, and all general FE colleges, sixth form colleges, ILPs, and 16 to 19 maintained schools and academies are funded at £6,000 per high needs place (sometimes referred to as element 2). This funding is deducted from the local authority’s DSG and paid to the schools and colleges via the department, based on the published data on place numbers from the annual place change notification process. For maintained schools and PRUs, this funding remains in local authorities’ DSG high needs allocations to fund schools direct, and local authorities have flexibility to make changes to the place numbers.  

11.1 High needs place funding: local flexibility to allocate differently  

There remains the flexibility whereby a local authority can reach agreement with any of the types of school or college referred to above, that this element of the educational provider funding can be calculated and paid in a different way directly by the local authority, subject to the following requirements:  

• there should be agreement on the alternative funding approach between the local authority and the school or college involved and this agreement should ideally be reached in the autumn before the financial year in which the change takes effect  

• the alternative arrangement must ensure a continuation of the £6,000 cost threshold for top-up funding and reflect high needs students attending from other local authorities to maintain consistency in the high needs funding system  

• in other words, the funding methodology should continue to provide schools and colleges with funds to meet the additional costs of supporting students with SEN up to £6,000 per annum, with top-up funding meeting the costs in excess of that threshold  

• local authorities should be aware that the import/export adjustment will continue to operate as explained above, whatever alternative methodology is used  

The schools and colleges involved must, therefore, continue to provide information about students with high needs through the school census and ILR according to the current definition. This means that such students must have been assessed by the local authority as having high needs and the provider must be receiving top-up funding for their support costs in excess of £6,000. This school census and ILR information provides the data that allows the import/export adjustment to operate fairly for local authorities.  

The local authority can make such alternative funding arrangements by agreement with its maintained secondary and 16 to 19 schools and PRUs without any formal notification to the department.  

Where an alternative funding methodology is agreed with an academy or college, the local authority should notify the department through the place change notification process that the place number is to be reduced. The place number would be zero if the local authority has agreed with the academy or college that the alternative methodology covers the equivalent of all their place funding, including those places filled by students placed by other authorities.  

In all cases, the deduction from the local authority’s DSG high needs allocation would reflect the reduced place number, because the local authority has agreed the change with the academy or college involved and will pay the funding to the academy or college concerned directly.  

It is important for local authorities to note that no changes will be made to the import/export adjustment in the NFF, because the provider local authority (the local authority area where the school or college is based), will still be expected to meet the costs of all the places in the school or college. This includes those places to be occupied by students for whom other commissioning local authorities are paying the top-up funding.  

This flexibility encourages local authorities and their schools and colleges to work together in making special provision for their students. Examples of alternative approaches could be:  

• an agreement to fund a college through a lump sum directly per year over 3 years, to provide certainty to the local authority and college on the level of provision and funding that will be made subject to specified tolerances relating to the actual number of students with high needs receiving support  

• an agreement that a school sixth form will be funded for its students with SEN based on similar proxy measures to those used in the local pre-16 funding formula  

The department may collect further information from local authorities about any alternative funding calculations they devise.  

11.2 Post-16 study programmes/supported internships  

Most young people with high needs attending a school, college or SPI will have an EHC plan. Local authorities must use the evidence from the EHC plan to make consistent, effective and robust assessments of the support the young person will need to move towards a positive outcome.  

Local authorities and the schools and colleges offering places for students with high needs should work together to agree a suitable study programme for a young person, which must be tailored to their individual aspirations and support needs.  

A full-time study programme has minimum planned hours of 580 hours and there is no set maximum. Neither local authorities, nor schools and colleges should set an arbitrary maximum number of hours for a study programme, but instead students should be provided with the number of hours they require to complete the programme. A funding requirement for all programmes is that they meet the condition of funding for maths and English.  

A supported internship is a full-time study programme funded by the department for young people aged 16 to 25 who have an EHC plan, want to move into employment and need extra support to do so. The costs of additional support associated with providing an effective supported internship placement can include indirect costs (for example, engagement with an employer to ensure the suitability of a placement for the young person, or with their family to ensure they are supportive).  

Supported interns can apply for Access to Work funding from the Department for Work and Pensions (DWP) to cover the costs of practical support in the workplace. 

Local authorities should not assume that an application for Access to Work or other sources of funding for supported internships have been successful without receiving written confirmation to avoid top-up funding allocations paying for the support costs twice.  Where the costs excluding any other available funding (such as Access to Work) are more than £6,000, these may be eligible to be funded from local authorities’ high needs budgets. Students on supported internships whose support costs are less than £6,000 must not be regarded as students with high needs, even though they have an EHC plan.  

11.3 Part-time or part year students: post-16  

The department also considers young people to be high needs students when they are part-time or part-year and their additional support funding would total more than £6,000, if provided over the full academic year, as agreed with the local authority in which the student is resident. For more information, see guidance regarding the funding rates and formula, used in the funding arrangements for 16 to 19-year-olds.  

Where a school or college has enrolled, or is considering enrolling, a high needs student who will attend on a part-time or part-year basis, they should hold discussions with the relevant local authority as commissioners of high needs provision. The normal funding approach should then apply, in line with the principles outlined in this guide.  

11.4 Students aged 19 to 25 with EHC plans and schools: funding restrictions  

The department would normally expect 19 to 25-year-olds to receive their further education in colleges (including ILPs and SPIs) as they are better placed to provide an environment that prepares young people for adult life in their local community. Paragraph 30 of schedule 2 to The Schools and Early Years (Finance) England Regulations permits local authorities to incur expenditure from their high needs budgets on young people aged 19 to 25 who are receiving further education in settings other than schools (including 16 to 19 academies, which are classed as FE colleges), provided they have an EHC plan.  

The DSG conditions of grant and The School and Early Years Finance (England) Regulations require that a local authority must not use DSG funding to fund places in maintained special schools for young people who are over 18 years old. There is an exception to this for those aged 19 and over who are continuing to attend a particular course of secondary education which they began before they reached the age of 18. This is to ensure consistency with the law that defines secondary education under section 2 of the Education Act 1996. Special academies are treated the same in this regard.  

Further education can be provided by a school, subject to restrictions such as its age range or academy funding agreement. It is not possible, however, for a local authority to incur expenditure from its high needs budget to support young people receiving further education in mainstream or special schools (maintained, academy, free schools, non-maintained and independent). Exceptionally, a local authority can make a disapplication request to enable the local authority to use its high needs budget to fund further education provision for a student aged 19 or over in a school.  

If a school considers providing post-16 further education study programmes and has the appropriate specialist expertise to prepare students aged 19 to 25 with an EHC plan for adult life (including independent living and employment) it should engage with its local authority. The school would need to establish separate FE provision for that age group. This would normally entail the school setting up a legally and financially separate entity to provide the appropriate environment and curriculum for young people of that age group. Such new post-19 specialist provision would normally be set up as an SPI. To be eligible to receive high needs place funding from the department for the first time, SPIs must have been included in the department’s annual place change notification process by a local authority and must successfully complete the high needs funding: due diligence process for special post-16 providers.  

More information on how new SPIs are funded can be found in the special post-16 institutions section.  

For information on learners aged 19 to 25 without an EHC plan, see annex 1: other information.  

11.5 Students aged over 25  

A local authority may be required to maintain an EHC plan until a young person is 25 years old and this must be reviewed annually to ensure the provision remains appropriate for the individual’s needs. For a student with an EHC plan when they are 24 years old, the plan normally ceases when the student turns age 25, although local authorities have a power to extend an EHC plan until the end of the academic year in which the student turns age 25.  

If a local authority extends the EHC plan until the end of the academic year, the local authority must continue to provide top-up funding to the FE college until that time.  

Place funding is allocated to the FE college by the department for the full academic year and would not normally be clawed back if the EHC plan is not extended.  

Local authorities are not responsible for commissioning provision for students with SEND who are aged 19 to 25 without an EHC plan or who are over the age of 25. Links to the funding arrangements for these students are at annex 1: other information.  

12. Further information  

If, having read this guidance, there are any points which require clarification, you can contact the department via the Customer Help Portal.  

Maintained schools should contact their local authority.  

Additional guidance on SEND support for schools, colleges, children’s services and parents and carers can be found at special educational needs and disability (SEND) and high needs.  

13. Annex 1: other information

13.1 Special educational needs and disabilities (SEND) code of practice  

Local authority maintained schools, academies, general FE colleges, non-maintained special schools, and all independent special schools and SPIs on the section 41 list must have regard to the department’s SEND code of practice: 0 to 25 years on the SEND system for children and young people aged 0 to 25.  

13.2 Alternative provision (AP) statutory guidance 

This document covers statutory guidance local authorities should have regard to when carrying out their duty to arrange suitable education for children who cannot attend mainstream provision. Up to date statutory guidance due to be published shortly, also covers the role that the child’s home school should play when commissioning AP to ensure the child receives a suitable education in a safe environment.

13.3 Further education (FE) student financial support, including free meals 

The department provides a range of financial support for students who need it to enable them to participate in post-16 education, including free meals, bursaries to help with the cost of education (such as travel, books, equipment, and trips), plus support for childcare and residential costs where required. For further information on this, including where the cost of meals is sometimes included as part of the package of support that is agreed with local authorities, details are available at 16 to 19 education: financial support for students.

13.4 Support funding through the apprenticeships funding methodology  

Funding support is available to support apprentices to complete their apprenticeship.

13.4.1 Learning support (including exceptional learning support)  

Learning support is there to meet costs (incurred by the provider) of putting in place reasonable adjustments for apprentices to complete their apprenticeship who have a learning difficulty or disability as defined in section 15ZA(6) of the Education Act 1996 (as amended by section 41 of the Apprenticeships, Skills, Children and Learning Act 2009). 

More information on learning support (including exceptional learning support), can be found in the department’s support for apprentices with a learning difficulty or disability guidance.  

13.4.2 Additional Payments  

Providers and employers will receive an additional £1,000 payment towards the additional cost associated with training if, at the start of the apprenticeship training, the apprentice is:  

• aged between 16 and 18-years-old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)  

• aged between 19 and 24-years-old and has either an EHC plan provided by their local authority and/or has been in the care of their local authority 

Full details on learning support (including exceptional learning support) and additional payments can be found within the relevant sections of the apprenticeship funding rules.  

13.5 Funding for adults aged 19 and above without an EHC plan 

High needs funding can only be used to support adults aged 19 to 25 if they have an EHC plan. There is a range of alternative support available to adults aged 19 to 25 without an EHC plan, and those aged 25 and over who require additional support. 

The nature of the support available will depend on the education or training being undertaken, but support is available for adults being funded through both the adult skills fund and apprenticeship funding. 

13.6 Pupils and students living in Wales or England and attending a school or college across the border 

The department is currently engaging with the Welsh Government on the funding arrangements for pupils and students living in England or Wales who are attending a school or college across the border and will provide further guidance in due course.   

There are no equivalent statutory arrangements for pupils or students from other countries in the UK or elsewhere. Local authorities, schools and colleges are able to negotiate the recovery of costs as they consider appropriate, taking account of other relevant legislation, such as the Equality Act 2010.

14. Annex 2: an example of where pupil and student numbers differ from allocated places

The following is an example of how the high needs funding arrangements should operate when a school or college has more pupils or students with high needs than the number of places for which it has been funded. Although it is illustrated using a college located in a local authority area (the provider local authority) with several other local authorities also commissioning places, similar arrangements may also apply to other schools and colleges, including special academies. 

The example demonstrates how the place funding for schools and colleges and consequent deductions from local authorities’ high needs allocations work together with the import/export adjustment. This shows the flow of high needs funding between local authorities, schools and colleges when a school or college has to make additional special provision for a number of pupils or students that exceeds the funded place number, including where inter-authority collaboration is required: 

1. Following data sharing and discussion with a college and where there is a change from the previous academic year, the provider local authority submits the total high needs place numbers to the department in November, through the place change notification process, in advance of the start of the academic year. 

2. In this example, the local authority and college have agreed on 100 places for the 2025 to 2026 academic year, which comprises the total number of places to be filled by high needs students from all local authorities. 

3. The number of college places to be funded is published by the department in January 2024 and, during the subsequent enquiry window, the college and local authorities check the number, ensuring they are content that it reflects local discussions. 

4. The department issues an allocation to the college in March 2024, in advance of the academic year. This reflects the 100 places, providing £600,000 of high needs funding (100 places × £6,000 place funding). 

5. The provider local authority’s DSG will also be updated in March 2024 and 100 places deducted from their high needs allocation at £6,000 per place, prorated for the academic year, based on the 8 months from August to March (100 places × £4,000). 

6. The resident local authority (the local authority in which the student is ordinarily resident, and which commissions the place) needs to have notified the college directly that the student has high needs and have agreed top-up funding. The provider local authority (if not commissioning the place) and the department does not need to be involved in these conversations. However, the department would encourage neighbouring local authorities to collaborate on the special provision required for their students. This includes cooperation on associated commissioning arrangements and top-up funding levels. 

7. In the lead up to the academic year, several local authorities have commissioned further high needs places in excess of the 100 places that the college has received place funding for. Therefore, the college has 120 high needs students at the start of the academic year 2024 to 2025. 

8. This has resulted in additional costs for the special provision required by these extra 20 students that the college cannot meet through its existing funding streams. This includes the £6,000 high needs place funding in their allocation and standard top-up funding rates in respect of the 120 high needs students. The college should not seek to recover these costs through the top-up funding sought from the resident authorities commissioning places for the extra 20 students. This is because places funded at £6,000 per place are not reserved for individual pupils or specific local authorities and funding changes may arise from the local authority net import/export DSG adjustment. 

9. Therefore, the college discusses with the provider local authority, if possible before the start of the academic year, the scale of the additional special provision that it is being expected to make available and the costs involved. It is agreed that the provider local authority will allocate a further £50,000 of high needs funding to contribute to the additional costs incurred by the college. This is to help meet the additional costs of making the provision required by the additional students, on top of the normal funding streams. 

10. It is important to note that within the department’s lagged funding system, the department would normally expect the costs of in-year growth to be met by the college. At the same time, local authorities will have received an increase in high needs funding to recognise population and other factors that have contributed generally to the costs of growth. Where that growth is significant in a college, it is reasonable for the provider local authority to consider what extra funding might be needed by the college to maintain the required level of provision, on an exceptional basis. The college should not expect the provider local authority to pay an extra £6,000 for every extra student placed over and above the college’s 100 places. The provider local authority should be compensated for the costs of the high needs’ places filled by students resident in other local authorities, including 5 of the additional 20 students via the import/export adjustment in the 2025 to 2026 financial year. This includes the final term of the 2024 to 2025 academic year. 

11. In this example, 50 students live in other local authorities. This is recorded on the college’s ILR in February 2025 and + £300,000 (50 × £6,000) will subsequently contribute to the provider local authority’s net import/export DSG adjustment for 2025 to 2026. 

It is important to note that this example is provided for a college and some details may vary depending on the school or college or place type. 

15. Annex 3: special schools minimum funding guarantee  

The MFG protection for maintained special schools and special academies in 2025 to 2026 is set by a condition of grant that applies to local authorities’ DSG.  

The local authority, in deciding on top-up funding rates for the pupils to be placed in its maintained special schools, special academies it previously maintained, and special free schools located in its area, must comply with the minimum percentage by which the budget of any special school or special academy would change from the 2024 to 2025 financial year to the 2025 to 2026 financial year. The calculation must assume that all the pupils in the special school or special academy (or free school) were placed by the local authority and the number and type of places remained the same in the 2 financial years 2024 to 2025 and 2025 to 2026.  

The MFG percentage for 2025 to 2026 is 0%. The local authority can set a higher percentage increase but must have a disapplication request approved if any of its special schools would have their top-up funding reduced, resulting in a lower (negative) percentage change from year to year.  

The department expects local authorities to respond appropriately to schools’ cost pressures in 2025 to 2026 to secure the provision required for the pupils they place there, taking account of any inescapable cost increases. In considering top-up funding levels, local authorities should also take into account that the place funding rate will remain at £10,000 per place in 2025 to 2026, and also that special schools will receive a CSBG allocation to reflect cost increases already incurred.  

The comparison for the MFG calculation will be schools’ 2024 to 2025 funding baselines. If the top-up funding has been adjusted for one or more schools so as not to breach the 2024 to 2025 MFG, rather than an adjustment made to the rates applied to all schools, that adjustment should be included in the baseline for the 2025 to 2026 MFG.  

The top-up funding must be set at a rate to ensure a school’s total budget is no lower on a per pupil basis to that in 2024 to 2025.  

Where there are extenuating circumstances, the process to request disapplication of the MFG will remain in place, with details set out below.  

The following funding for 2024 to 2025 and 2025 to 2026 should be excluded from the MFG calculation:  

• the TPAG, TPECG 2024 and CSBG   

• high needs (historic teachers’ pay and pensions funding that the school receives in place of the legacy TPG, the TPECG and the teachers’ pensions supplementary fund  

• the additional funding for 2024 to 2025 and 2025 to 2026 that local authorities are required to pass directly to maintained special schools and special academies, as explained in annex 4: historic teachers’ pay and pensions funding and additional funding of this guide  

The department is considering whether, and how, these elements of funding could be included in the MFG calculation from 2026 to 2027 and will provide further guidance on this as required. 

When calculating the protection, local authorities should make sure that they are comparing like for like. Adjustments should be made for changes in the nature of the provision. For example, if previous top-up funding rates included an element for a commissioned service which is no longer provided by the school, the value of that element can be discounted when calculating the MFG protected level.  

Once the MFG assessment confirms 2025 to 2026 top-up funding rates received by the school are in line with the guarantee, they can then be applied to reflect the actual number and type of places at the school. There may be reasons why a local authority is not planning on passing a level of top-up funding to one or more of its special schools sufficient to meet the MFG in 2025 to 2026. For example, a local authority might be working with all its schools to re-balance the top-up funding that is allocated between mainstream and special schools, to enable the former to meet a wider range of needs; or a local authority, given the level of reserves a particular special school has accumulated, might have undertaken a benchmarking exercise and aligned top-up funding levels for its schools to ensure similar provision for pupils with similar levels of need are funded on a consistent basis.  

Where a local reorganisation or review of funding levels takes place and there are changes to bandings, the pupils in the school(s) in 2024 to 2025 and their categories of need should be attributed as far as possible to the new bandings for 2025 to 2026 to assess whether any school will receive less than the MFG.  

Breaches of the MFG should only be in exceptional circumstances. In all circumstances where the MFG is proposed to be breached and the local authority intends to fund one or more schools below the guaranteed level, the local authority must formally request that the relevant condition of grant is disapplied using the digital disapplication request form accompanied by supporting information. Local authorities are expected to produce a worked MFG calculation prior to considering a disapplication request – see example tables in the ‘MFG modelling’ section below.  

Disapplication requests from local authorities seeking exceptions to the MFG rule will be considered on a case-by-case basis and each request will apply for one year only. No prior year approvals will be carried forward. Local authorities submitting repeat requests covering the same schools should ensure the disapplication request is comprehensive, as if a new request was being presented, comprising the necessary up to date supporting information and financial modelling, in line with this guidance.  

Where a local authority wishes to adjust the top-up funding across several schools, for example, following a review of its top-up funding rates and as a result some schools gain funding and others face a reduction, a disapplication will be required, however the request will only be relevant to those schools whose funding would fall below the guaranteed level.  

Consequently, local authorities should not, through this process, seek endorsement of the entirety of a new top-up funding scheme that they are intending to implement across some or all their special schools.  

15.1 Disapplication request and supporting information   

Requests for a disapplication are now made using the digital disapplication request form. Local authorities wishing to submit a request (other than those in the safety valve intervention programme - see below) should complete the digital disapplication request form and read the accompanying guidance and supporting notes. In advance of doing so, local authorities should ensure that in their request there is sufficient relevant and contextual information for an informed, fair and reasonable decision to be made. The core information should comprise: 

• how the impact on specialist education being provided to pupils by the schools that are not meeting the MFG has been considered  

• why this request is the local authority’s preferred option 

• what alternatives have been considered 

• why the alternatives were discounted (an options appraisal)  

• any transitional arrangements that the local authority is putting in place to minimise the impact on special schools and to provide assurance of their ongoing viability  

• relevant local contextual information, for example, the results of recent Ofsted inspections  

Specific supporting information should be included with the request, as follows:  

• financial modelling and the modelling for the preferred option to be in line with the examples provided in this annex, to show the financial impact on those schools not meeting the MFG. The modelling should include the change in total funding between 2024 to 2025 and 2025 to 2026  

• information about any previous changes in funding, which have been approved by the Secretary of State and/or agreed with the schools affected  

• information on the affected schools’ financial health, reserves or deficits and analysis of in-year balances over previous years, as evidenced from data sources and interpretation published data

• details of the local authority’s DSG balance as evidenced from local authority and school expenditure published data and the forecast balance at the end of the financial year 2024 to 2025. If the local authority has a DSG deficit, they will need to provide a copy of an up-to-date recovery plan, and explain how the disapplication of the MFG links with this plan  

• a summary of the consultations that have been undertaken with the schools affected and other interested parties, such as parent/carer groups  

• there is also a requirement that high needs funding arrangements are discussed in the local schools forum, so details of any schools forum consultation or consultations with a wider range of schools and colleges may be necessary  

• an equalities impact assessment of the impact on children and young people with protected characteristics  

The department asked local authorities that were planning to submit a disapplication request to contact the department for an initial discussion before starting the process, with an expectation that a formal request with the necessary comprehensive supporting information was submitted by 18 November 2024. This was to allow sufficient time for decisions to be notified to local authorities in advance of the 2025 to 2026 financial year.  Following the NFF allocations, if there are any requests that local authorities are now actively considering beyond this deadline, you should contact:

LA.Disapplications@education.gov.uk

To note, all local authorities in the safety valve programme have been contacted individually with details about how they should submit any relevant disapplication requests for 2025 to 2026 and where a request is to be made, this should be submitted to the safety valve team at:

SafetyValve.Programme@education.gov.uk.

15.2 Minimum funding guarantee (MFG) modelling  

The worked modelling examples below provide 2 scenarios of how the MFG operates in the event of top-up funding changes in 2025 to 2026 for a 100-place special school. Table 5, a worked modelling baseline example shows the funding in 2024 to 2025, when it was occupied by a total of 90 pupils, 30 in each of 3 different bands. This is considered a baseline, and the same number of places, pupils and levels of need should be used for 2025 to 2026. The calculation then highlights the impact of any proposed changes to the top-up funding rates, assuming the school is offering the same level of provision.  

In table 6, MFG calculation (MFG scenario 1), one of the 3 top-up funding rates has reduced, and one has increased. Overall, the funding for the school would be above the 0% MFG, if the number and types of places remained the same. Therefore, 2025 to 2026 top-up funding rates are in line with the guarantee and funding to the special school should reflect these rates (for pupils placed by the provider local authority), the number of pupils in each band and the actual number of places.  

In table 7, MFG calculation (MFG scenario 2), one of the top-up funding rates has decreased, bringing the funding for the school below the 0% MFG level. Consequently, the top-up funding for this school will need further adjustment to be compliant with the MFG. It will not be necessary for the local authority to adjust all schools’ top-up funding rates.  

As part of the MFG assessment, if any top-up funding rates that are applied across a local authority’s special schools are reduced, this calculation will be needed for each special school. Local top-up funding arrangements vary, although many local authorities have developed top-up funding bands that are the same across all their special schools, it is possible for rates to vary between schools, or for school-level factors to be included. Such arrangements can also be used on a temporary or transitional basis to ensure that all their schools’ funding levels are protected and covered by the MFG. If top-up funding rates in 2025 to 2026 are set at a level which means that one or more of the local authority’s special schools’ funding is less than in 2024 to 2025, taking into account any temporary or transitional top-up funding, and therefore breaching the 0% MFG – on a like for like comparison of 2024 to 2025 and 2025 to 2026 funding levels – a disapplication request must be submitted in respect of those schools.

Table 5: MFG calculation – a worked modelling baseline example

Special schools funding: 2024 to 2025	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£5,000	£7,500	£10,000	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£150,000	£225,000	£300,000	£675,000
Total funding	N/A	N/A	N/A	£1,675,000

Table 6: MFG calculation (MFG scenario 1) - a worked modelling example where the funding is above the 0% MFG

2025 to 2026:	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£4,600	£8,000	£10,000	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£138,000	£240,000	£300,000	£678,000
Total funding	N/A	N/A	N/A	£1,678,000
MFG % difference from 2024 to 2025	N/A	N/A	N/A	0.18%

Table 7: MFG calculation (MFG scenario 2) – a worked modelling example where the funding is below 0% MFG  

2025 to 2026:	Band 1	Band 2	Band 3	Total
Number of places	30	35	35	100
Number of pupils	30	30	30	90
Top-up rate	£4,600	£7,500	£10,000	N/A
Place funding	£300,000	£350,000	£350,000	£1,000,000
Top-up funding	£138,000	£225,000	£300,000	£663,000
Total funding	N/A	N/A	N/A	£1,663,000
MFG % difference from 2024 to 2025	N/A	N/A	N/A	-0.72%

16. Annex 4: historic teachers’ pay and pensions funding and additional funding 

The historic teachers’ pay and pensions funding, and other legacy additional funding that local authorities were required to pass on to schools following the 2022 autumn statement, should not be confused with the separate CSBG for 2025 to 2026. These legacy funding streams, which are part of the DSG high needs funding block, are covered in this annex.

Table 8 below explains the difference between the legacy funding streams and the 2025 to 2026 CSBG, which reflects the additional costs of the 2023 and 2024 teachers’ pay award, the teachers’ pension employer contribution rate increase from April 2024, support staff pay increases for 2024 to 2025, and other more recent cost increases. Further information on the CSBG for 2025 to 2026 can be found in the core schools budget grant (CSBG) 2025 to 2026 for special schools and alternative provision.

Table 8: differences between legacy funding streams and CSBG 2025 to 2026  

Legacy funding, including for historic teachers’ pay and pensions cost increases This funding covers the ongoing costs arising from:	CSBG 2025 This funding covers the ongoing costs arising from:
The teachers’ pay awards in September 2018 and 2019 The increase in employer contributions for teachers pensions from September 2019 Additional cost pressures in 2023 to 2024, for which a 3.4% funding increase was made available, equivalent to the mainstream schools additional grant (MSAG)	The teachers’ pay award from September 2023 The increase in employer contributions for teachers in the Teachers’ Pension Scheme from April 2024 The teachers’ pay award from September 2024, support staff pay increases from April 2024 and other cost increases

For background on how this legacy funding was originally allocated to local authorities, and the rules for how it should have been passed on to schools in 2024 to 2025, the high needs operational guide for 2024 to 2025 provides further information.

This annex explains the modified rules governing local authorities’ allocations of this funding for 2025 to 2026, as set out in the DSG conditions of grant for 2025 to 2026. Local authorities must allocate this funding to: 

• their maintained special schools and PRUs 

• special academies and AP academies they previously maintained or that are located in their area  

• special and AP free schools in their area  

• hospital schools and the equivalent academies in their area 

There is no recoupment for academies and free schools in respect of this funding, so local authorities must fund academies and free schools directly. 

This high needs funding must not result in a reduction either: 

• to the number of places, for which £10,000 per place is allocated to a special or AP school or another amount per place is allocated to a hospital school 

• to the top-up funding paid to the school in respect of individual pupils 

This funding will not affect the value or operation of the NFF import/export adjustments, or of the DSG deductions for academies’ place funding. 

Furthermore, this funding must be disregarded in applying the protection for special schools set out in annex 3: special schools minimum funding guarantee. These are separate high needs funding streams (that is, neither place funding, which remains at £10,000 per place, nor top-up funding). 

16.1 Maintained special schools and PRUs, special and AP academies and free schools, and maintained hospital schools and the equivalent academies 

Local authorities must allocate the historic teachers’ pay and pensions employer contribution grant funding to maintained special schools, PRUs, special and AP academies and maintained and academy hospital schools, on a per place basis according to the number of funded places in the financial year 2025 to 2026, subject to a minimum of 40 places per school. 

The amount per place to be funded should be the same as in 2024 to 2025. The local authority should also include in the allocation of this funding any historic teachers’ pensions supplementary fund paid by the local authority for the financial year 2024 to 2025. 

The other legacy additional funding, originally calculated as 3.4% of the place and top-up funding, should be allocated on a per place basis as follows, using the same place numbers used for funding maintained schools by the local authority, and for funding academies and free schools as published by the department, in the period April 2025 to March 2026: 

• for each special school, academy and free school the full-year amount per place that was used for the period April 2024 to March 2025  

• the full-year amount allocated to each PRU, AP academy and free school for the period April 2024 to March 2025, converted into an amount per place using the place numbers for that period 

For example, a special academy received additional funding of £142,800 (200 places at £714 per place) in 2024 to 2025. The place number is increasing to 220 in academic year 2025 to 2026. The special academy should therefore receive additional funding in 2025 to 2026 amounting to five-twelfths of £142,800 (= £59,500) plus seven-twelfths of 220 multiplied by £714 (= £91,630), which totals £151,130. 

Hospital schools and the equivalent academies should be allocated funding as above, on a basis equivalent to their status as a special school or academy, or a PRU or AP academy. 

There is no requirement to consult schools on these allocations. 

16.2 Data to be used for the calculation of additional allocations 

In all cases the place numbers used must be the total place number published by the department for each academy and free school, or that reported by local authorities for funding their maintained schools, in their annual s251 budget statement. 

The place numbers for the academic year 2024 to 2025 were published in autumn 2024 covering all schools and colleges, except maintained schools. The place numbers for academic year 2025 to 2026 will normally be known by the local authority as a result of the place change notification process, as they are used for their DSG deductions, even though final place numbers for 2025 to 2026 will not be published until March 2025.

A local authority may wish to request information from the department on the number of 2025 to 2026 academic year places to be funded in AP free schools, before requesting a disapplication in the case of an AP free school, although this information will not be available until March 2025. 

Local authorities have provided the 2024 to 2025 academic year place numbers for their maintained schools through their s251 budget returns (published 26 September 2024). Local authorities will have determined their maintained schools’ place numbers for 2025 to 2026 before they are reported in the s251 budget statement for that year and published by the department. 

16.3 New special and AP free schools 

Local authorities must make an allocation of high needs funding for any new special or AP free school opening between April 2025 and March 2026, to reflect the historic teachers’ pay and pension funding and additional legacy funding that other local schools are receiving. Local authorities will continue to have the flexibility to disburse this funding, following consultation, in recognition of specific costs not covered by the £10,000 per place and level of top-up funding that the school is receiving.  

This funding must be an amount per place, subject to a full-year minimum of £660 per place for the historic teachers’ pay and pensions funding and £340 per place for the other legacy additional funding. The place number used should be the number of places used by the department for funding the free school in the period April 2025 to March 2026. There is no requirement for a minimum place number to be used. 

16.4 Request to vary the amounts calculated in accordance with the specified data 

Local authorities can also propose amounts lower than the minimum calculated using the specified data, by requesting a disapplication of the relevant condition of grant. They will be able to seek approval to use different data or a different calculation that gives a lower amount.  

The department expects such requests to be rare, for example, when a reduction in the number of places to be funded in 2024 to 2025 has not been agreed between the local authority and the school. In such cases, the department may seek to resolve any disputed place number, if it relates to an academy, before a decision on the disapplication request. 

Local authorities wishing to submit a disapplication request, other than those in the safety valve programme, should have done so by 18 November 2024 using the digital disapplication request form. This was to allow sufficient time for decisions to be notified to local authorities in advance of the 2025 to 2026 financial year. Following publication of guidance on the rules relating to this legacy funding in this annex, and the information on local authorities’ high needs NFF allocations, if there are any requests that local authorities are now actively considering beyond this deadline, they should contact:

LA.Disapplications@education.gov.uk

16.5 Non-maintained special schools (NMSS)

NMSS will continue to receive the historic teachers’ pay and pension funding directly from the department at a level equivalent to the amounts per place paid in 2024 to 2025, plus any teachers’ pension supplementary fund payments, without any recoupment or deductions from local authorities’ high needs allocations. 

These payments will be distinct from any payments of place funding, which will remain at £10,000 per place. 

16.6 Further education (FE) colleges and special post-16 providers (SPIs)

FE colleges and some SPIs that contribute to the pension scheme receive the teachers’ pension scheme employer contribution grant, which is based on their audited contributions into the pension scheme. 

These arrangements have been confirmed until the end of the 2024 to 2025 academic year.

17. Annex 5: responsibility for children and young people who move between local authorities  

Local authorities are responsible for conducting the EHC plan needs assessment and, where necessary, issuing EHC plans and securing the provision specified for children and young people in the local authority’s area (section 24(1) of the Children and Families Act 2014). Local authorities should fund any special educational provision for children and young people with EHC plans from the high needs block of the DSG, which is allocated on a formulaic basis, including factors relating to the children and young people resident in their area. Further information can be found in the high needs national funding formula: technical note. Therefore, responsibility for SEN and high needs funding is normally based on where the child or young person lives.  

Under the Children and Families Act 2014, local authorities are responsible for children and young people with SEN who are wholly or mainly resident in their area. These duties are based on where the child or young person lives and not on where they are educated. Where a child or young person is educated outside the local authority area where they usually live, it is the local authority where the child normally lives that is responsible for conducting the EHC needs assessment and issuing an EHC plan, where necessary and for securing and funding that provision.  

Some children and young people may require residential educational placements (particularly those with the most complex needs). In such cases, it is the department’s view that the child or young person continues to be considered as living in the local authority area that placed them in the residential provision (since a residential school or college placement, even for 52 weeks of the year, is educational provision and not a place where a child or young person lives. That is, the child or young person will remain resident at their family home), and, therefore, they would continue to have the duty to maintain any EHC plan.  

The high needs NFF includes a basic entitlement factor and import/export adjustment that together ensure local authorities are appropriately compensated for the high needs place funding for schools and colleges. This funding allocation is paid directly to the schools and colleges either by the local authority that maintains the school or by the department in the case of academies, NMSS and colleges.  

Where a child or young person moves from the area of one local authority into the area of another (for example, changes where they usually live), the new local authority becomes responsible for meeting the statutory SEN duties (as detailed in the SEND code of practice section 9.157 to 9.162). This may happen where a child’s family moves, or if a young person decides to remain living where they have been educated. If the child or young person already has an EHC plan, the old local authority is required to transfer the EHC plan to the new local authority on the day of the move, or within 15 working days of becoming aware of the move. The new local authority then becomes completely responsible for maintaining the plan and funding the specified educational provision. The new local authority must review the EHC plan within 12 months of the plan being made or being reviewed by the old local authority, or within 3 months of the plan being transferred (whichever is later). The new local authority may conduct a new EHC needs assessment, regardless of when the previous EHC needs assessment took place, since local variations may mean that arrangements in the original EHC plan are no longer appropriate.  

17.1 Looked after children  (LAC)

Looked after children (LAC) are those who have been taken into care or who are being provided with accommodation by a local authority in its statutory role under the Children Act 1989. More than half of looked after children have some form of SEN, and it is likely that a significant proportion of them will have an EHC plan. A significant proportion of looked after children live with foster parents or in a children’s home and attend schools in a different local authority to the local authority that looks after them. The Care Planning, Placement and Case Review Regulations 2010 distinguish between the responsible authority (the local authority that looks after the child) and the area authority (the local authority in which the child is placed). Local authorities placing looked after children in another local authority’s area (for example, with foster parents) need to be aware of that respective local authority’s SEND local offer if the children have SEN. Where an EHC plan assessment has been started, it must be carried out by the local authority where the child lives (is wholly or mainly resident), which may not be the same as the local authority that looks after the child, as set out in section 10.8 of the SEND code of practice. If a disagreement arises, the local authority that looks after the child will act as the corporate parent in any disagreement resolution.  

When a local authority places a looked after child with an EHC plan in another local authority’s area (for example, with foster parents), the local authority where the looked after child lives (is wholly or mainly resident) becomes responsible for maintaining their EHC plan (including paying any top-up funding), in the same way as any child or young person who moves from one local authority’s area to another.  

The policy intention behind this is that the local authority where the child lives knows their local schools and educational provision better, so they are better able to assess whether the child needs special educational provision on top of what is ordinarily available.  

The Inter-authority Recoupment (England) Regulations 2013 permit the local authority where a looked after child with an EHC plan lives to recoup the cost of primary or secondary education, which includes additional special educational provision (for example, the costs of top-up funding), from the local authority responsible for looking after the child. Recoupment of education costs will not normally be appropriate, however, as from 2018 the high needs funding formula and associated arrangements have been designed to ensure that local authorities’ allocations of funding for SEND are based on the characteristics of the children and young people living in their area, including any looked after children. In addition, there are adjustments to reflect the costs relating to the movement of pupils and students living in one local authority area who receive their education in another local authority area.  

Inter-authority recoupment may remain appropriate in some circumstances, for example for looked after children from Wales. The department also recognises that certain local authorities attract a disproportionate number of looked after children from other local authorities because of the number of children’s or foster homes operating in their area. In such circumstances, the local authorities concerned may wish to come to an agreement on how the costs of educating looked after children are funded through the local authorities’ respective funding allocations, which may include recoupment of educational costs from the local authority looking after the child. In the case of emergency or temporary placements by the local authority responsible for the looked after child/children, it may also be reasonable for the placing local authority to pick up the costs (directly or via recoupment) until a more permanent placement is made and/or the transfer of the EHC plan is arranged.  

It should be noted that the recoupment regulations do not provide for recoupment of costs of FE provision, so costs of additional SEND provision for young people in FE settings cannot be recouped in this way.  

The Education (Areas to which Pupils and Students Belong) Regulations 1996 (the ‘Belonging’ Regulations), as amended, are used to determine which local authority a person belongs to for the purposes of recoupment only. Regulation 1(4) makes clear that the ‘Belonging Regulations’ do not apply for the purpose of determining which local authority’s area a child is in for the purposes of section 24 of the Children and Families Act 2014. They should not be used to determine which local authority is responsible for conducting an EHC needs assessment and maintaining, securing, and funding the provision in an EHC plan, since this must be determined under the Children and Families Act 2014.  

17.2 Post-19 provision for young people accommodated under the Care Act 2014  

For a young person aged 19 to 25, the local authority where they live is responsible for conducting any EHC needs assessment, issuing an EHC plan where necessary, and for securing and funding that provision.  

Children cease to be looked after when they are over the age of 18 (some children will cease to be looked after at 16 or 17 years old and others will continue to be looked after until their 18th birthday). The Inter-authority Recoupment (England) Regulations 2013 apply only to looked after children (up to their 18th birthday), and so do not apply to young people aged 19 or over. Once they are no longer looked after, the recoupment regulations no longer apply. This should not matter as the local authority where the young person lives will have been funded through the high needs funding formula to meet the costs, in the same way as for any other young person who lives in their area.  

Some care leavers will remain living with their former foster parents past their 18th birthday in staying put arrangements, but they are no longer looked after. The local authority which looked after a child remains responsible for meeting their leaving care duties regardless of where the young person may now be living in England or Wales (section 23A (4) of the Children Act 1989).  

This includes providing the young person with support for the expenses associated with living near where they are seeking work, working, or receiving education or training.  

Decisions on adult social care placements may change the local authority responsible for making SEN provision. It is the department’s view that, where a young adult is accommodated under the Care Act 2014 in a residential adult social care placement (as opposed to residential education) made on a long-term basis (for example, with the intention that it is to be permanent for the foreseeable future), it is likely to be considered to be a change in the adult’s residence. Therefore, if a young person aged 19 to 25 has been accommodated under the Care Act 2014, in a permanent residential care placement in a different local authority area, it is likely they will have moved into the area of the new local authority, unless there are factors indicating otherwise. Therefore, for the purposes of the Children and Families Act 2014, the new local authority would be responsible for securing and maintaining any EHC plan.

18. Annex 6: health and social care costs   

Where a child or young person with SEND has relevant health or social care needs, these should be addressed within an integrated EHC plan. Responsibility for securing the provision specified in the plan sits with the relevant statutory bodies: the local authority for education and social care provision, and either the Integrated Care Board (ICB) or (in some cases) NHS England for health provision.  

The high needs funding block of the DSG is intended to meet the educational costs of children and young people with SEN or who require AP. The DSG may only be used for the purposes specified in the DSG: conditions of grant and The School and Early Years Finance (England) Regulations which means that it may not be used to meet non-educational costs, except where specifically permitted. The costs of securing health provision (specified in section G of an EHC plan) should be met by either the  ICB or NHS England. The costs of securing social care provision (specified in sections H1 and H2 of an EHC plan) should be met by the local authority from their social care budgets.  

However, the Children and Families Act 2014 acknowledges that specific types of health or social care provision may be considered as education or training. The Children and Families Act 2014 requires that health or social care provision which educates or trains a child or young person must be treated as special educational provision (that is, deemed educational provision). This particularly applies to therapies such as speech and language therapy, physiotherapy and occupational therapy. This means that it will be recorded in section F of an EHC plan and will be treated as special educational provision and, therefore, in scope of the high needs budget. However, all decisions about whether health care provision or social care provision should be treated as special educational provision must be made on an individual basis, as set out in section 9.74 of the SEND code of practice.

While independent and non-maintained provision frequently offers integrated education, health and social care provision, only educational costs (including deemed educational costs) should be funded by the DSG. In some cases, the integrated package of support will be costed and charged through a single fee. In these cases, the local authority should charge non-educational costs to the responsible partners. The department would expect the relevant partners to have agreed the basis for the placement and its funding before it is confirmed (for example, before a final EHC plan is issued). The social care element of accommodating children with SEND in schools should be charged appropriately.  

19. Annex 7: permanent exclusions: funding adjustments  

The alternative provision and hospital education section highlights the importance of ensuring schools and local authorities explore the most effective arrangements for AP commissioning and funding in their area, including for children who have been permanently excluded. Where pupils are excluded, under  The School and Early Years Finance (England) Regulations, funding should flow in-year from the school that has permanently excluded the pupil to the provision that takes responsibility for the pupil. If a school subsequently admits a pupil who has been permanently excluded during that financial year, it should then receive additional funding.  

The provisions also apply to pupils who leave a mainstream school for reasons other than permanent exclusions and are receiving education funded by the local authority, other than at a school. The provisions also act independently of whether a particular pupil has been on the school census in the first place and whether the school has, therefore, received funding for them.  

Local authorities are responsible for adjusting the budget shares of mainstream maintained schools if a pupil is permanently excluded, so that funding follows the pupil. Further information on this, including calculating the amount to be deducted from the excluding school’s budget and admitting school’s budget (if appropriate), is available in the ‘Redetermination of budgets where pupils have been excluded’ section of the schools operational guide: 2025 to 2026.

Different funding arrangements apply in relation to pupils permanently excluded from PRUs, AP academies, maintained special schools, special academies and children in designated SEN units or resourced places at mainstream schools. These schools receive base funding for each place, which is not linked to individual pupils and so is not withdrawn following a permanent exclusion. Similarly, the calculation for an admitting school would not be used for a PRU, AP academy or AP free school. They also receive top-up funding that is linked to individual pupils. When commissioning places at one of these types of school, local authorities and schools should formally agree with the providing school what proportion of this top-up funding will be returned if a pupil leaves the school (for any reason). See sections ‘Top-up funding for alternative provision (including examples)’ or ‘Further information on the approach to top-up funding for PRUs, AP academies and AP free schools’ above for further information.  

The only exception to this is where pupil premium is payable in respect of a pupil attending a PRU or special school maintained by the local authority. In this situation, local authorities must adjust the school’s budget in accordance with the same formula that applies to mainstream schools. In the case of AP and special academies, local authorities should claim from the academy an amount equivalent to the pupil premium (as calculated according to the formula in the regulations) or pay the academy the relevant amount when a previously permanently excluded pupil joins the academy.  

Information about regulations covering the movement of funds in relation to permanently excluded pupils who are placed in provision in other local authorities can be found under the section ‘Inter-authority funding transfers’ in the schools operational guide: 2025 to 2026. The regulations relate to situations where a pupil is permanently excluded from a maintained school in one local authority, and is either:  

• subsequently provided with education in the same financial year at a maintained school, or otherwise than at school in a second local authority  

• subsequently provided with education in the same financial year at a PRU, or otherwise than at school in a second local authority, and then at a maintained school or otherwise than at school in a third local authority

20. Annex 8: important dates

The timeline below shows the implementation of the 2025 to 2026 high needs funding arrangements, including actions for local authorities and schools and colleges.

Schools and colleges must ensure the school census or ILR guidance is followed on all items that are, or will be, used for funding purposes, including elements of the NFF. It is critical that all schools and colleges check the latest guidance to make sure that they understand what is required, including identifying those pupils or students for whom they receive high needs top-up funding.

October 2024

Department for Education:

• 2025 to 2026 guidance on the place change notification process published and local authorities workbook issued  

• January 2024 school census data for special academies and free schools published  

• 2023 to 2024 and 2024 to 2025 high needs place numbers updated (as of 1 October 2024)

Local authorities:  

• continue discussions with all types of schools and colleges and other local authorities to ensure positive strategic demand and supply planning to enable agreement to be reached in 2025 to 2026 high needs place numbers, in preparation for completion of the data return to the department   

Schools and colleges:  

• continue discussions with local authorities and reach agreement in 2025 to 2026 high needs place numbers, in preparation for the local authority data return to the department   

• all maintained schools, academies, NMSS and PRUs, to complete the autumn school census  

• FE colleges, sixth form colleges, ILPs, 16 to 19 academies and  SPIs are to submit 2024 to 2025 ILR R14  

November 2024  

Department for Education:  

• the  AP free schools 2025 to 2026 place process launched  

• provisional high needs NFF allocations for 2025 to 2026 published 

Local authorities:  

• deadline for local authority submission of 2025 to 2026 high needs place number changes and requests for local authority hospital education funding changes to the department   

• deadline for requests to disapply conditions of grant relating to funding from the schools block of the DSG  

• local authorities’ DSG updated  

Schools and colleges:  

• complete discussions with local authorities and reach agreement for 2025 to 2026 high needs place numbers, in preparation for the local authority return to the department   

• AP free schools: discuss commissioning arrangements with local authorities and schools for the 2025 to 2026 academic year  

December 2024  

Department for Education:  

• 2025 to 2026 DSG schools, central school services and high needs block allocations and DSG conditions of grant published  

• indicative 2025 to 2026 DSG early years block allocations published  

FE providers:  

• FE colleges, sixth form colleges, ILPs, 16 to 19 maintained schools and academies, and SPIs submit 2024 to 2025 ILR R04  

January 2025  

Department for Education:  

• 2025 to 2026 high needs place change notification outcomes published on GOV.UK  

• 2023 to 2024 R14 ILR data returned by colleges published  

• 2-week enquiry window for local authorities and relevant schools and colleges to raise place change related issues 

• The School and Early Years Finance (England) Regulations 2025 are published  

Local authorities:  

• calculate additional funding allocations for special and AP maintained schools and academies and consult schools on the data and calculations used  

• check published outcomes and ensure queries are discussed with relevant schools and colleges and, if necessary, those raised during the 2-week enquiry window  

• this should include checking the outcomes for schools and colleges located in other local authorities, where a local authority places large numbers of students  

• deadline for submitting the final 2025 to 2026 APT to the department. This covers all mainstream maintained schools and academies: including pupil numbers on the October 2024 census in RP and SEN units to support the calculation of funding for occupied and unoccupied places  

Schools and colleges : 

• schools and colleges to check changes to 2025 to 2026 funded place numbers are correctly reflected in the published outcomes, ensure any queries are discussed with the relevant local authority and, if necessary, raised with the department during the 2-week enquiry window  

• deadline for AP free schools 2025 to 2026 place number returns  

• all maintained schools, academies, NMSS and PRUs to complete spring 2025 school census  

February 2025  

Local authorities:  

• 2-week enquiry window closes for raising queries with the department regarding 2025 to 2026 funded place numbers  

• review of, and amendments to EHC plans must be completed by 15 February for pupils moving into, or between, schools in that calendar year  

• 2025 to 2026 budgets issued to mainstream schools, special schools and PRUs  

Schools and colleges:  

• 2-week enquiry window closes for raising queries with the department regarding 2025 to 2026 funded place numbers  

• FE colleges, sixth form colleges, ILPs, 16 to 19 maintained schools and academies and SPIs to submit 2024 to 2025 ILR R06  

March 2025  

Department for Education:  

• publication of the 2025 to 2026 high needs place numbers for schools and colleges  

• 2025 to 2026 academic year allocations to be issued to FE colleges, sixth form colleges, free schools, academies, NMSS, SPIs, ILPs and 16 to 19 academies  

• local authorities’ DSG  updated  

Local authorities:  

• additional high needs funding allocations to special and AP maintained schools and academies, calculated according to the requirements and guidance set out in annex 4: historic teachers’ pay and pensions funding and additional funding 

• review of and amendments to EHC plans, including specifying the post-16 provision and naming the school or college, must be completed by 31 March for students moving from a secondary or special school to a college or apprenticeship in that calendar year  

• complete EHC plan review process by 31 March for students moving between post-16 colleges, where a young person is expected to transfer to a new post-16 college in the new academic year  

Schools and colleges:  

• check high needs allocation is received and correct  

June 2025  

Department for Education:  

• issue to local authorities the NFF import/export adjustments data at school and college level, the special free school adjustments data and guidance on the import/export data error notification process (supporting information about new special free school adjustments can be found in the DSG: technical note 2024 to 2025 and special free schools adjustment: a guide for local authorities)  

Local authorities:  

• review NFF import/export adjustment data  

FE providers:  

• FE colleges, sixth form colleges, ILPs, 16 to 19 academies and SPIs to submit 2024 to 2025 ILR R10  

July 2025 

Department for Education:  

• 2025 to 2026 high needs place numbers updated and published (as of 1 July 2024)  

• 2025 to 2026 DSG update to reflect final school and college level allocation decisions, NFF import/export adjustments and special free school adjustments (supporting information can be found in the DSG: technical note 2025 to 2026)  

• local authorities’ DSG updated  

• local authorities notify the department of potential data errors in the NFF import/export adjustments

1. Findings from Phase One - DBV in SEND and ↩

2. High needs budgets: effective management in local authorities ↩