Guidance

Core schools budget grant (CSBG) 2025 to 2026 for special schools, special post-16 institutions and alternative provision: conditions of grant for the 2025 to 2026 financial year

Updated 22 May 2025

Applies to England

1. Introduction

1.1 Legislation

The core schools budget grant (CSBG) will be paid by the Secretary of State for Education as a grant under section 14 of the Education Act 2002. In accordance with section 16 of that Act, the Secretary of State attaches the following terms to the grant payable.

1.2 Purpose

The CSBG will provide £688 million to support schools and post-16 institutions with their overall costs in the 2025 to 2026 financial year. Within this total, the Department for Education (DfE) has set aside:

• £480 million for the CSBG to continue support provided through the 2024 to 2025 CSBG and separate teachers’ pay and pensions grants paid in 2024 to 2025, specifically the teachers’ pay additional grant (TPAG) and teachers’ pension employer contribution grant (TPECG), for special and alternative provision (AP) schools’ additional staff costs
• £125 million for employer national insurance contributions (NICs) costs, and
• £83 million for teachers’ and other staff 2025 pay awards.

DfE, on behalf of the Secretary of State for Education, will pay the CSBG funding to local authorities for maintained special schools and pupil referral units, special and AP academies, independent special schools, special post-16 institutions (SPIs), independent learning providers and providers of hospital education.

Non-maintained special schools (NMSS) will be funded directly by DfE.

1.3 Period 

These conditions of grant cover the financial year 2025 to 2026. 

We will confirm in due course how this CSBG funding will continue to be provided in 2026 to 2027.

2. Eligibility

The following settings are eligible to receive funding via local authorities:

• maintained special schools
• special academies and free schools
• independent special schools
• pupil referral units (PRUs) (5 to 16 provision)
• AP academies and free schools (5 to 16 provision)
• maintained hospital schools, equivalent academies and other providers of hospital education
• SPIs
• independent learning providers (ILPs)

The following settings are eligible to receive funding directly from DfE:

• NMSS

3. Payments

3.1 Calculation

Allocations of this grant are calculated using the methodology provided in the CSBG methodology document.

3.2 Payment timetable

DfE will pay the CSBG to local authorities and NMSS as set out in the following table:

CSBG 2025 to 2025 payment schedule	Allocations published	Payment 1	Payment 2	Payment 3	Payment 4
Continuation of 2024 to 2025 CSBG and pay & pensions grants	May 2025	May 2025
NICs increase funding	May 2025		September 2025
2025 pay award funding	October 2025			October 2025
Above elements of funding using updated data	March 2026				March 2026

DfE will pay NMSS in the same months as set out above.

4. Local authority requirements

4.1 The rate at which CSBG funds are passed on to schools

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

As set out below, these 2025 to 2026 CSBG conditions of grant provide the opportunity to retain these flexibilities and provide continuity for schools or move, subject to appropriate consultation, to a simpler approach that reflects the methodology used to allocate the funding to local authorities.

4.2 Special and AP schools, and other providers of hospital education

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

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

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

• the full-year equivalent of the 2024 to 2025 CSBG, which they received^{[footnote 1]}plus the 2024 to 2025 TPAG and TPECG, and

• five-twelfths of their 2024 to 2025 academic year place numbers and seven-twelfths of their 2025 to 2026 academic year place numbers

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

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

For the NICs and 2025 pay awards increase elements of the 2025 to 2026 CSBG, which do not have a 2024 to 2025 equivalent, local authorities can use for its allocations to schools the rates and place numbers that DfE has used for their allocations to the authority or, following consultation with their schools, vary the amounts per place. In the latter case, local authorities must distribute 100% of the total funding allocated in respect of those schools.

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

4.3 Independent special schools, special post-16 institutions (SPIs) and independent learning providers (ILPs) 

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

4.3.1. For independent schools only

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

4.3.2 For independent schools, SPIs and ILPs

• the increase in high needs placement fees for 2025 to 2026 charged by independent schools, SPIs and ILPs on account of the NICs increase from April 2025. Funding for the costs of the 2025 staff pay increases for SPIs and ILPs is being allocated outside the CSBG.

4.4 Non-maintained special schools (NMSS)

NMSS will receive their funding direct from DfE at the rate per place calculated according to the 2025 to 2026 CSBG methodology.

4.5 The CSBG and other funding streams

In all settings CSBG funding for mainstream schools is not part of maintained schools’ budget shares nor part of the individual schools’ budget. It is not part of academies’ general annual grant (GAG). It is not to be counted for the purpose of calculating the special schools minimum funding guarantee for 2025 to 2026.

Local authorities can use the relevant elements of this CSBG funding, however, to contribute to the payment of independent special schools’, SPIs’ and ILPs’ fees, where those fees have been increased to take account of the additional NICs and staff pay costs.

5. Assurance

5.1 Eligible spend

Local authorities will be required to certify that they have passed on the funding to schools in line with these conditions of grant. DfE will issue a certification form in spring 2026.

Local authorities must ensure that their maintained special schools, PRUs and hospital schools only spend CSBG for the purposes of the school or unit.

Special and AP academies (including those providing hospital education), NMSS, independent special schools and SPIs must only spend CSBG funds for the purposes of the school or institution.

5.2 Carry forward

In all schools and institutions, CSBG funds may be carried forward past 31 March 2026.

6. Further information

Books, other documents and records relating to the CSBG recipient’s accounts shall be open to inspection by the Secretary of State and by the Comptroller and Auditor General.

The Comptroller and Auditor General may, under section 6 of the National Audit Act 1983, carry out examinations into the economy, efficiency and effectiveness with which the CSBG recipient has used its resources.

Local authorities and NMSS shall provide information as may be required by the Secretary of State to determine whether they have complied with these conditions.

7. Variation

The basis for allocation of grant may be varied by the Secretary of State from that set out above, if so requested by the local authority or NMSS.

8. Recovery of funding

If a local authority or NMSS fails to comply with the terms and conditions set out in this document, the Secretary of State may recover some or all of the CSBG that has been allocated. This will be notified in writing to the local authority or NMSS.

Recoveries will be made by invoice or by offsetting the amount against subsequent payments due from DfE.

The recipient must notify DfE immediately through the Customer Help Portal  if it becomes aware of any instance of error, suspected fraud or financial irregularity in the use of the funds.

9. Overpayments

If a local authority or NMSS identifies that it has been overpaid, it must contact DfE to arrange repayment of the excess. Where DfE identifies an overpayment, it may seek to recover the excess. The local authority, school or SPI will be notified of this in writing.

10. Enquiries

For queries relating to these terms and conditions please use the Customer Help Portal.

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