Guidance

Special free schools adjustment: a guide for local authorities

Updated 8 June 2023

Applies to England

1. Introduction

This guide is for local authorities, particularly those with special free schools in their area and those commissioning places in special free schools outside their area.

It may also be useful to special free schools and others with an interest in high needs funding.

Further information about high needs place funding can be found in the high needs funding: 2023 to 2024 operational guide.

This document explains:

• how funding adjustments are made to a local authority’s dedicated schools grant (DSG) for new and growing special free schools, to ensure this does not result in an unfunded cost

• how the funding local authorities receive for new and growing schools will be determined

• how and when this will be allocated to local authorities through the high needs national funding formula (NFF) and Education and Skills Funding Agency’s (ESFA) allocations process

1.1 Updates for 2023 to 2024

We have defined those special free schools that are new and growing and those that are not, for the purpose of this funding adjustment process.

We will review this guidance in 2023.

2. Place numbers at special free schools

We have published a list of the 2022 to 2023 place numbers, including all special free schools.

Local authorities should discuss with special free schools the places to be funded in the 2023 to 2024 academic year, notifying ESFA of any changes to the place numbers through the place change notification process, which will be published in the autumn.

Special free schools opening from October 2022 will not be included in the 2023 to 2024 place change notification process and so will be funded in both the 2022 to 2023 and 2023 to 2024 academic years based on their agreed financial plan. These schools will be included in the place change process for 2024 to 2025 onwards.

When determining place numbers, as with any education provider type, it is important that the place numbers reflect the total number of places that all local authorities are planning to commission, and not just those of the local authority in which the school is located. A school should not be funded for places that are unlikely to be occupied by pupils during the academic year.

3. Determining local authority funding for special free schools

ESFA deduct funding for places at special free schools from a local authority’s high needs allocation and pay it directly to schools, as for special academies. To ensure new special free schools’ place funding does not create an additional cost for local authorities, we provide additional funding for places in these special free schools.

For those schools identified as having reached the end of their period of growth as a new free school, before or in the 2022 to 2023 academic year, the additional funding has been included in local authorities’ baselines used to calculate the 2023 to 2024 high needs funding formula allocations. Place funding for these schools will therefore be allocated to local authorities through the relevant NFF factors, as for maintained special schools and special academies, and no further adjustments will be made.

As last year, for those local authorities with new and growing schools, the additional funding will be based on the number of places requested in the place change process and calculated as shown in calculating local authorities’ additional funding for new and growing schools.

4. How we identify special free schools that are no longer new and growing

Schools identified as reaching the end of their period of growth in or before 2022 to 2023 continue to be funded through the NFF. This will not change in the event of subsequent expansions and increased capacity.

For 2023 to 2024, we have defined special free schools that have completed their initial period of growth as no longer new and growing if:

• the school was open before or during the 2015 to 2016 academic year

• where both:

  • the school’s 2022 to 2023 funded places are at least as high as its total capacity on get information about schools (GIAS) as of May 2022

  • the January 2022 school census shows at least 90% of all places are occupied, where the number of places is the lower of:

    a) the 2022 to 2023 funded places or

    b) the total capacity on GIAS as of May 2022

A special free school will not be considered new and growing for the purposes of the adjustment, where it has opened to admit pupils transferred from other provision (for example, from a closing special academy), which was previously funded through the local authority’s DSG.

5. How to define new and growing special free schools

Special free schools that do not meet the above criteria are considered as new and growing for this process. Additional funding will be made available to local authorities for these schools in the high needs block, outside the NFF .

The additional funding available to local authorities for additional places for the 2023 to 2024 academic year will not exceed the school’s planned capacity as recorded on GIAS. Where the number of places requested by a local authority in the place change process exceeds the school’s capacity as shown on GIAS, the additional cost of the higher number of places will be met out of the local authority’s high needs allocation.

Schools should review their GIAS data monthly to ensure accuracy.

6. Calculating local authorities’ additional funding for new and growing schools

We use the basic entitlement factor and the import/export adjustment in the NFF and further adjustments as set out in a worked example of new and growing special free schools’ deductions and allocations, to ensure local authorities attract the right amount of additional funding for new and growing special free schools in their area.

The school census data from all special free schools are included in the calculation of the basic entitlement factor and import/export adjustments within the high needs formula, so local authorities will attract funding for pupils in special free schools in their area. We will allocate this funding on a financial year basis, as for special academies. The mechanism and timings for this are detailed below.

6.1 December 2022

DSG allocations reflect the £4,660 per-pupil basic entitlement factor in the NFF which includes pupils in special free schools, based on the October 2022 school census.

6.2 March 2023

DSG deductions for place funding at special free schools are updated to reflect places for the 2022 to 2023 and 2023 to 2024 academic years.

Deductions are made at:

• £4,167 per place for 2022 to 2023 (£10,000 * 5/12 for April to August)

• £5,833 per place for 2023 to 2024 (£10,000 * 7/12 for September to March)

6.3 May and June 2023

Special free schools form part of the overall import/export adjustment, which also includes special academies, mainstream schools and further education (FE) colleges. They are not shown separately in the net import/export adjustment in the DSG allocation but can be identified in the school and college level information, issued to local authorities in June.

The special free schools adjustment calculation is also issued to local authorities.

6.4 July 2023

The special free school adjustment will be reflected in the 2023 to 2024 DSG update. Local authorities will receive an additional £6,000 for every pupil identified on the January 2023 school census as living in their area and attending a special free school. The funding will flow through the import/export adjustment, ensuring that local authorities with special free schools in their area are funded through the formula, with no additional cost for pupils imported from other local authorities. The table in calculating the local authority allocation adjustment demonstrates how this works.

A further adjustment will be made for the difference between the place funding deducted (other than where the increased cost relates to place numbers exceeding capacity), and the additional funding received through the basic entitlement factor and import/export adjustments.

7. A worked example of new and growing special free schools’ deductions and allocations

The calculation of the adjustment for local authorities can be divided into several parts. These are funding:

a) received through the high needs national formula basic entitlement factor (October 2022 school census)

b) adjustments based on the import/export data (January 2023 school census)

c) deducted for the number of places funded at £10,000 per place at the school (or the place number capacity of the school, if lower than the number of funded places)

d) for a further adjustment, if additional funding is required, to reflect the difference between the amount deducted (c) minus the funding received through the basic entitlement and import/export adjustment (a + b)

We have provided an example below to illustrate how these are calculated. In this scenario:

• 40 places were funded in the 2022 to 2023 academic year

• the local authority requests that 65 places are to be funded in the 2023 to 2024 academic year (to allow for general growth in the number of pupils to be placed at the school)

• a total capacity of 60 places is recorded on GIAS

• 38 pupils are recorded in the October 2022 and January 2023 censuses

• 8 pupils are resident in other local authorities in the January 2023 census

8. Calculating the local authority allocation adjustment

Step 1: the basic entitlement element is included in the December DSG allocation. It uses the October 2022 census (38 pupils at the school) and multiplies this by the basic entitlement rate of £4,660, less £660 (teachers’ pay and pensions funding) = £4,000. This gives funding of £152,000 (a).

Step 2: calculate the import/export element (b). The import/export adjustment is calculated at local authority level: the following table illustrates how the additional funding related to a particular school, flows through the import/export adjustment.

In this scenario, local authority 1 receives £180,000 from ESFA, plus £48,000 through the import/export adjustment, so will be compensated for all 38 pupils at the school. It also shows that local authority 2 will receive £48,000 from ESFA, which will then flow through the import/export adjustment to local authority 1.

Row	Calculation element	Local authority 1	Local authority 2
i	Pupils resident in local authority	30	8
ii	Additional ESFA funding (row i * £6,000)	£180,000	£48,000
iii	Pupils attending school	38	0
iv	Net import/export adjustment - pupils (row iii - i)	8	-8
v	Net import/export funding adjustment (row d * £6,000)	£48,000	-£48,000
vi	Actual funding change (row ii + v)	£228,000 (b)	£0

Step 3: ESFA calculate the number of places for which additional funding will be provided (c). This is based on the places funded or the total capacity on GIAS if lower than places funded, so in this scenario:

• 40 places funded at £10,000 per place for April to August ((40 * £10,000) * 5/12) = £166,667, plus

• 60 places funded at £10,000 per place for September to March ((60 * £10,000) * 7/12) = £350,000

This gives a total financial year amount of £516,667 (c).

Step 4: calculate the difference between the amount for which additional funding will be provided and funding received to give you the further adjustment, if required. To illustrate:

• the amount for places to be funded by ESFA is £516,667 (c)

• less funding received (basic entitlement £152,000 as in step 1 above (a), plus the import/export adjustment £228,000 as in step 2 above (b)) totalling £380,000

• giving a difference of £136,667 (c - (a + b))

This amounts to a further adjustment of £136,667. If the difference were a negative amount, we would not seek to recover funding.

To note, in this example the local authority chose to fund 5 more places than the 60 places in the school’s planned capacity due to general growth. The actual DSG deduction will be for the 65 places recorded in the place change return.

9. Annex 1: schools funded through the national funding formula for 2023 to 2024

This table lists those special free schools that, for the purpose of the NFF, have completed their initial period of growth.

For more information about how these are identified see how we identify special free schools that are no longer new and growing.

Local authority establishment number	School name
2067000	St Mary Magdalene Academy: The Courtyard
2067001	The Bridge Integrated Learning Space
2137000	The St Marylebone Church of England Bridge School
3017001	Riverside Bridge School
3097003	The Grove
3127001	Pentland Field School
3137003	The Rise Free School
3367001	Wolverhampton Vocational Training Centre
3527000	Pioneer House High School
3537003	The Springboard Project
3587002	The Orchards
3837004	Lighthouse School Leeds
8017003	Venturers’ Academy
8037002	SGS Pegasus School
8417000	Marchbank Free School
8527050	Rosewood Free School
8557003	Foxfields Academy
8667003	Churchward School
8687000	Forest Bridge School
8707000	Thames Valley School
8737008	Martin Bacon Academy
8747000	Medeshamstede Academy
8787009	Ace Tiverton Special School (Charlton Lodge)
8817002	Grove House School
8877000	Inspire Free Special School
8897002	Eden School
8957001	NAS Church Lawton School
8957002	The Axis Academy
9097003	Cumbria Academy for Autism
9267002	The Wherry School
9337000	The Mendip School
9357009	Churchill Special Free School
9357016	Sir Bobby Robson School
9377006	Quest Academy
9407003	Red Kite Academy
9417000	Daventry Hill School
9357020	Sunrise Academy