Guidance

A guide to new 16 to 19 free school revenue funding: 2025 to 2026

Updated 8 October 2025

Applies to England

© Crown copyright 2025

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This publication is available at https://www.gov.uk/government/publications/16-to-19-free-school-revenue-funding/a-guide-to-new-16-to-19-free-school-revenue-funding-2023-to-2024

This guidance is for new 16 to 19 free schools opening in the 2025 to 2026 academic year.

It sets out:

  • how we’ll calculate revenue funding for new 16 to 19 free schools
  • the funding rates for the 2025 to 2026 academic year
  • the financial governance and accountability requirements for trusts

The financial management and governance self-assessment tool helps trusts to assess a free school’s financial governance and compliance before opening.

This guidance does not cover funding for:

School resource management

Effective schools make the best use of resources to have the maximum impact for their pupils. Schools that do this well tend to:

  • plan their curriculum and finances together, known as integrated curriculum and financial planning
  • have a strategic approach towards financial planning for the longer term (3 to 5 years)
  • deploy their staff effectively and efficiently, linked to their long-term plan
  • have robust challenge from financially skilled governors and head teachers
  • have skilled staff responsible for managing finances and procurement
  • have transparent financial systems and processes

School resource management (SRM) offers a suite of free tools and guidance to help schools and academy trusts get the best value from their resources and maximise the impact on pupil outcomes.

A self-assessment checklist is also available. This will help academy trusts check that they are managing resources effectively and identify any adjustments they need to make.

You can access Department for Education (DfE) get help buying for schools procurement service for free and impartial support, advice and guidance. Here you can access approved DfE-frameworks which can help you save time and money on regular purchases such as supply teachers, energy, cleaning services, and ICT.

School resource management advisers (SRMA) provide free, independent and tailored advice and support on using your schools resources to maximise outcomes for pupils.

To receive regular updates about school resource management tools, support and guidance, sign up for the school business professional newsletter.

Financial planning

Free schools should plan their expenditure using the most up to date financial template. This will make sure your school is affordable within the funding we provide.

Contact your Regions Group delivery officer for the latest version of the template which contains the 2025 to 2026 funding rates.

If you do not have a delivery officer contact the regional office for your area.

You should update your financial plan as you:

  • develop your plan for the school
  • appoint staff
  • develop site plans
  • establish your costs
  • get confirmation of your funding arrangements

You should review your financial plans regularly to make sure they reflect the:

  • likely number of pupils – based on the number of applications received
  • funding arrangements for each new academic year

We need assurance that free schools are on-course to be financially viable on opening. For secondary free schools with post-16 provision to provide a sustained and viable curriculum, we advise a minimum of around 1,000 pupils (around 200 capacity across all years for a school sixth form).

Submitting your financial plans

We ask free schools in the pre-opening stage to submit their current financial plans before entering into a funding agreement. This should include a version modelled around the minimum number of pupils you need to be financially viable.

You’ll need to resubmit your financial plans before your readiness to opening meeting. This should be based on the latest available number of accepted offers.

Submit your plans with evidence to underpin your pupil number assumptions which must be realistic and achievable. Your plans should reflect:

  • your income which you base on your estimates of available grants
  • your outgoings
  • the likely number of pupils

Plans should show that you will not go into deficit at any point. We expect to see in-year surpluses of no more than 5%, including any contingency.

Your delivery officer will provide you with the date that you will need to provide a final finance plan ahead of opening, which will be used to determine your initial funding.

The financial benchmarking service allows you to compare your spending patterns to schools in similar circumstances.

Funding

In 2025 to 2026, the following funding will be available once open:

  • national 16 to 19 formula funding
  • business rates grant
  • teachers’ pay additional grant
  • teachers’ pension employer contribution grant
  • special educational needs or alternative provision commissioner top-up funding (where appropriate)
  • post-opening grant

Payments

DfE usually calculate and pay the funding for each free school. We pay 16 to 19 funding monthly in equal instalments. This is usually on the first working day of the month. The only exception will be in your first month of opening when we will pay you on the sixth working day of the month.

National 16 to 19 formula funding

We use a national funding formula to calculate allocations for 16 to 19 institutions each academic year.

More information on the funding rates and formula is available from:

New free schools planning to offer 16 to 19 provision in their first 2 years of opening will be able to submit a business case before they open. Your delivery officer will contact you if you’re in scope to check if you want to submit a business case.

If we approve your business case, we’ll use the approved factors instead of using averages. We’ll use your data to calculate institution specific factors.

2025 to 2026 national funding rates

For new free schools, we’ll assume that all pupils are full-time and under 18 unless you tell us otherwise. Pupils will attract the band 5 national funding rate of £5,105 per student.

Retention

For new free schools, we’ll use the national retention average of 0.98516 for the 2025 to 2026 academic year.

Programme cost weighting

For new free schools, we’ll use the national programme cost weighting average of 1.06076 for the 2025 to 2026 academic year.

English and maths funding

For new free schools, we’ll use the national average instances per student of 0.09904 for English and maths funding.

This is a new funding element for the 2025 to 2026 academic year. Find out more information about 16 to 19 funding: maths and English condition of funding.

Disadvantage funding

For new free schools, we’ll use the local authority average for disadvantage block 1 and the national average of 0.14059 for disadvantage block 2.

Area cost uplift

You can find more information about the area cost uplift from the guidance on 16 to 19 funding: how it works.

High value courses premium

For new free schools, we’ll use the national average of 0.32744 for the 2024 to 2025 academic year.

Find more information about high value courses premium.

Discretionary bursary funding

You can find more information about discretionary bursary funding from the 16 to 19 Bursary Fund guide 2024 to 2025.

High needs funding

You’ll receive £6,000 per student for each high needs place identified by local authority commissioning plans and decisions.

More information about high needs funding is available.

Other elements of the national 16 to 19 formula funding

Other elements of the funding formula are not applicable to new free schools. This includes:

  • the large programme uplift
  • advanced maths premium
  • T levels
  • core maths premium

Find out more from funding for 16 to 19 year olds in schools.

Pupil number adjustment

We need robust and realistic estimates of pupil numbers to ensure that we fund the school accurately. In the first year of opening, an early pupil number adjustments exercise will happen. If the October census shows that the school has not admitted the predicted number of pupils, we’ll recover any excess funding in the following academic year.

If a 16 to 19 free school has recruited more pupils than they got funding for, DfE will carry out an in-year reconciliation. We will pay any additional funding in February of the current academic year. We will initially base allocations on an estimated number of pupils and local authority average pupil characteristic data.

Any positive or negative adjustment will use the actual pupil characteristics returned in the October census. They will replace the averages initially used if it produces a more favourable outcome for the school.

From the second year of opening, we will carry out the in-year reconciliation for the number of pupils. We will pay any additional funding in July of the current academic year. Any recoveries will start in the following academic year.

If academies have a positive pupil number adjustment and an outstanding pupil number adjustment, we will:

  • reduce the pupil number adjustment by the amount of the outstanding debt
  • if there is a net negative adjustment, use the positive amount to offset the debt and confirm any agreed deferrals or repayment plans against the lower amount

More information is available in the guidance for academies funded on estimated pupil numbers.

Teachers’ pay and pension employer contribution funding

Teachers’ pay

In 2025 to 2026, teachers and headteachers in maintained schools are receiving a pay award of 6.4%. 

DfE is providing £615 million to schools in 2025 to 2026 to support schools with additional costs, including staff pay awards.

Of the £615m of additional funding, £470m is going to mainstream schools through the schools budget support grant (SBSG) and £80m is going to high needs settings through the existing core schools budget grant (CSBG).

The funding rates for the SBSG in 2025 to 2026 are published on schools budget support grant (SBSG) 2025 to 2026: methodology.

Teachers’ pensions

The teacher pension employer contribution grant (TPECG) has provided £1.1 billion in 2024 to 2025 to support with the increase to the teachers’ pension employer contribution rate.

TPECG funding will be rolled into the schools’ national funding formula (NFF) from 2025 to 2026 to ensure it remains a protected part of schools funding. Academies will receive an additional payment of TPECG to cover the period April to August 2025, before this funding is rolled into the general annual grant (GAG) from September 2025.

Business rates grant

Free schools pay business rates at the 80% discounted charitable rate. They get a grant to cover the actual costs paid.

You can claim for national non-domestic rates. Your billing authority may submit a claim on your behalf.

Post-opening grant – central route projects only

We provide 16 to 19 free schools with a post-opening grant. Free schools set up through the local authority presumption route are not eligible for the post-opening grant.

The post-opening grant covers additional costs in establishing a new publicly funded school which are not covered by the general annual grant. It provides funding in 2 elements as the free school grows:

  • non-staffing resources, paid on a per-pupil basis
  • a leadership grant

We pay the resources element each year that the school builds up to capacity for each new pupil expected to be on roll. We do not revise it after opening to reflect actual pupil numbers. We take these numbers from the final finance plan you submit before opening.

We pay £500 for each new mainstream pupil in the 16 to 19 phases (years 12 to 13). We pay it over the first 3 months of the academic year. 50% paid in month 1, 25% in month 2 and 25% in month 3.

We pay the leadership element each year based on the number of year groups that the school will ultimately have, that do not yet have pupils. The second element of leadership, is a fixed-rate payment of £135,000. This is 80% in the first year and 20% in the second.

Risk protection arrangement

Risk protection arrangement (RPA) is an alternative to commercial insurance, whereby government funds cover any losses that arise. The RPA will cover losses that are in scope of the RPA membership rules.

The RPA membership year runs from 1 September to the following 31 August. You can join at any time. Free schools can join the RPA scheme and receive cover before opening. There is no cost or premium to join the RPA in pre-opening. Free schools in the pre-opening stage, should discuss joining the RPA scheme with their delivery officer.

Once a school is open, we will deduct the per-pupil cost at source from the free school’s general annual grant. The cost of RPA for the academic year (1 September 2025 to 31 August 2026) will be £27 per pupil.

Free schools do not have to join the RPA scheme and can make alternative insurance arrangements.

Financial governance and accountability

Trusts will need to ensure that spending decisions are transparent, and in the school’s best interests. Free schools will need:

  • sound financial procedures
  • the capacity to handle public money
  • good governance arrangements

On opening, you will need to:

  • have a robust framework to manage your funding
  • make sure you maintain proper accountability and procedures

Academy trust handbook

You must comply with the academy trust handbook throughout the pre-opening period and once open. It sets out the financial management and governance requirements for academy trusts.

Non-compliance with the handbook is a breach of contract.

The handbook includes requirements on:

  • financial oversight
  • financial planning
  • internal control
  • financial monitoring and management
  • the proper and regular use of public funds
  • auditing

The handbook sets out that the accounting officer is personally responsible to Parliament, and to the accounting officer of DfE, for the resources under their control. This personal responsibility extends to ensuring regularity, propriety and value for money. The accounting officer also has responsibilities for:

  • keeping proper financial records and accounts
  • the management of opportunities and risks

Financial statements

All academy trusts with a funding agreement must submit an audited annual report and financial statements to DfE by 31 December. This includes trusts with free schools.

The academies accounts direction explains the requirements for preparing and auditing academy trusts’ annual financial statements. Before signing your funding agreement, prepare your financial statements following company law.

Trusts must set their accounting reference date to 31 August at Companies House. This is the date you will use to produce your financial statements.

Trusts must file their accounts by 31 May with Companies House.

Other financial returns

Once open, trusts must also submit the following financial returns to DfE:

You are responsible for keeping up to date with the latest deadlines and requirements. More information about academies financial returns is available.

Document exchange

Document exchange is a secure, online service accessible via DfE sign-in. It enables academies to receive and exchange documents with DfE.

As soon as you open it, it will add you to the document exchange. It will use your information from get information about schools.

Contact us using the Customer Help Portal if you have any queries.

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