A guide to new mainstream free school revenue funding: 2026 to 2027
Updated 7 September 2026
Applies to England
© Crown copyright 2026
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This publication is available at https://www.gov.uk/government/publications/mainstream-free-school-revenue-funding/a-guide-to-new-mainstream-free-school-revenue-funding-2023-to-2024
This guidance is for free schools opening in the 2026 to 2027 academic year.
It sets out:
- how we will calculate revenue funding for new free schools
- the funding rates for the 2026 to 2027 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:
- special free schools
- alternative provision free schools
- 16 to 19 free schools
- free schools open before September 2026
- any initial funding to help free school proposers develop their projects before opening the school
- capital funding including annual costs of leasing premises
- Value Added Tax (VAT) - when open you can claim back any VAT paid on non-commercial activity, directly from HMRC via the VAT scheme for academies
Maximising value for pupils programme
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
Maximising value for pupils programme is a shared endeavour between government, schools and trusts to help address the barriers that prevent schools from getting the best value from their budgets. It focuses on 4 pillars:
The programmes provide a suite of free tools and guidance to help schools and academy trusts get the best value from their resources, including the Financial benchmarking and insights tool (FBIT) – a service that allows you to compare your spending with similar institutions across England and identify potential savings.
Academy trusts are required to complete the self-assessment checklist annually to confirm they are managing resources effectively and meeting the right financial health and resource management standards. Local-authority-maintained schools should use the Schools financial value standard.
You can access DfE’s Get help buying for schools service for free, impartial support, advice and guidance, including access to DfE-approved frameworks to help save time and money on regular purchases such as supply teachers, cleaning services and ICT.
DfE’s Energy for schools service helps state-funded schools and trusts switch to the same energy contract used by DfE.
The free DfE banking comparison tool helps schools and trusts compare the interest rate and associated return from current banking arrangements with products available in the market.
School resource management advisers (SRMAs) are accredited sector experts who provide free, independent and tailored peer-to-peer advice to schools, academy trusts and local authorities on using resources to deliver the best possible outcomes for pupils. As part of the SRMA programme, a free one-to-one mentoring service is also available for school business professionals.
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 2026 to 2027 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. To provide a sustainable, broad and balanced curriculum:
- primary provision should have a minimum of 2 forms of entry of 30 pupils (total of 60)
- secondary provision (years 7 to 11) should have a minimum of 4 forms of entry of 30 pupils (total of 120)
Do not base your financial plans on fewer pupil numbers unless we have agreed this.
For presumption free schools, your local authority and trust will determine the minimum number of pupils you need to be financially viable. We expect local authorities to provide sustainable underwriting arrangements to support the pupil forecasts they have agreed.
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 will 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.
You need to provide a final finance plan ahead of opening. This will be used to determine your initial funding. Your delivery officer will give you the date that you need to do this by.
The financial benchmarking service allows you to compare your spending patterns to schools in similar circumstances.
Funding
In 2026 to 2027, the following funding will be available once open:
- local pre-16 formula funding
- national 16 to 19 formula funding
- pupil premium
- business rates grant
- special educational needs top-up funding (high needs)
- teachers’ pay additional grant
- teachers’ pay, national insurance and inclusion funding
- teachers’ pay and pension employer contribution funding
- universal infant free school meals (FSM) with universal funding
- FSM
- post-opening grant (free schools set up through the local authority presumption route are not eligible for this grant)
Payments
DfE usually calculates and pays the funding for each free school. We pay schools their 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 DfE will pay you on the sixth working day of the month.
Local formula funding (pre-16)
We provide funding for schools, high needs and early years through the dedicated schools grant (DSG). The national funding formula (NFF) distributes school funding to local authorities. We base the formula on the individual needs and characteristics of every school in the country.
We will fund any new free schools consistently with other schools. This includes free schools that:
- are not yet open but are in the pipeline
- will enter the pipeline during 2026 to 2027
In 2026 to 2027, local authorities will remain responsible for setting local funding formulae which determine individual schools’ budget allocations. However, we require local authorities to move their local formulae closer towards the national funding formula in 2026 to 2027.
It is these local formulae that underpin how much core funding each academy and free school receives through the general annual grant (GAG).
Further information on the factors that make up the local formulae, as well as the minimum per pupil funding levels that local authorities must comply with in their formulae are available in the schools operational guide: 2026 to 2027
National 16 to 19 formula funding
We use a national funding formula to calculate allocations for 16 to 19 institutions each academic year. You can find more information on the funding rates and formula from:
- 16 to 19 funding: how it works
- 16 to 19 funding: 2026 to 2027 rates and formula
- 16 to 19 funding: information for 2026 to 2027
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 are in scope to check if you want to submit a business case.
If we approve your business case, we will use the approved factors instead of using averages. We will use your data to calculate institution specific factors from year 3.
2026 to 2027 national funding rates
For new free schools, we will assume that all students are full-time and under 18 unless you tell us otherwise. Students will attract the band 5 national funding rate of £5,133 per student.
Retention
For new free schools, we will use the national retention average of 0.98696 for the 2026 to 2027 academic year.
Programme cost weighting
For new free schools, we will use the national programme cost weighting average of 1.0615 for the 2026 to 2027 academic year.
English and maths funding
For new free schools, we will use the national average instances per student of 0.0963 for English and maths funding.
This is a new funding element for the 2026 to 2027 academic year. Find out more information at 16 to 19 funding: maths and English condition of funding.
For new free schools, we’ll use the national average instances per student of 0.09904 for English and maths funding.
Disadvantage funding
For new free schools, we will use the local authority average for disadvantage block 1 and the national average of 0.1388 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 course premium
For new free schools, we will use the national average of 0.33134 for the 2026 to 2027 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 2025 to 2026.
High needs funding
You will 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.
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 will recover any excess funding in the following academic year.
If a school has recruited more pupils than they got funding for, DfE will carry out an in-year reconciliation. They will pay any additional funding in February of the current academic year. DfE 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 carry out the in-year reconciliation for the number of pupils. They 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, DfE 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.
Where local authorities have already funded for growth in pre-16 pupil numbers to meet basic need, we will deduct the amount they have paid from any positive pupil number adjustments. This will ensure that academies are only funded for the growth once.
Pupil premium
The pupil premium provides schools with extra funding to improve education outcomes for disadvantaged pupils. It is not a personal budget for pupils and carries no individual entitlements.
In the 2026 to 2027 financial year schools will receive the funding for each pupil registered as eligible for FSM at any point in the last 6 years (FSM6).
Schools will also receive funding for each pupil who has left local authority care through:
- adoption
- a special guardianship order
- a child arrangements order
- a residence order
We make pupil premium payments in quarterly instalments. We calculate a school’s pupil premium allocation from the information it submits in the October school census (the January census is used for pupil referral units and alternative provision). We apply allocations from the start of the next financial year (April), paid in arrears so first payments are made in June.
Local authorities will also receive funding for each looked-after child in their care. The funding should be used on evidence informed interventions that are clearly linked to robust personal education plans and in line with the menu of approaches, in consultation with the child’s school. They can pass all the funding on to schools or retain some to fund activities that will benefit a group, or all, of the local authority’s looked-after children.
Implications of the FSM expansion on the pupil premium
From the start of the 2026 to 2027 academic year, DfE is delivering an expansion to FSM eligibility to include all pupils from households in receipt of Universal Credit. There will then be 2 categories of FSM:
- Targeted FSM, which continues to be based on the existing £7,400 income threshold
- Expanded FSM, which will apply to meals only, covering pupils who do not qualify for targeted FSM, but who are in households in receipt of Universal Credit
Following the expansion of FSM, only pupils eligible for targeted FSM will be part of the FSM6 cohort. This means that pupils who become eligible for FSM for the first time through the new expanded FSM category will not attract pupil premium funding.
Legacy staff pay and pension employer contribution
In 2025 to 2026, schools received additional funding to support the cost of pay rises and increases in national insurance contribution rates.
For mainstream schools, this additional funding was distributed through the schools budget support grant and the National Insurance contributions grant. The funding from these grants will be rolled into the schools’ NFF from 2026 to 2027 to ensure it remains a protected part of school funding.
Academies and free schools will receive an additional payment for these grants to cover the period April to August 2026, before this funding is rolled into the general annual grant from September 2026.
Inclusive mainstream fund
In 2026 to 2027, DfE is allocating £400 million through the new inclusive mainstream fund (IMF). This funding is on top of schools’ and academies’ core allocations through the NFF, and will help equip schools to improve the inclusivity of their universal practice, providing them with more resource to meaningfully embed inclusion and remove commonly occurring and predictable barriers to learning.
Details on how this funding will be distributed, including a calculator tool for settings to see an estimate on how much funding they will receive through the IMF, are available atInclusive mainstream fund: 2026 to 2027.
For 2026 to 2027, the 2025 to 2026 core schools budget grant and other legacy (staff costs) funding is being incorporated into local authorities’ dedicated schools grant, following other legacy funding streams that have already been consolidated. Local authorities are required to pass this funding on to special schools. The rules are explained in annex 4 of the high needs funding operational guide for 2026 to 27.
Business rates grant
Mainstream free schools pay business rates at the 80% discounted charitable rate.
Special educational needs top-up funding (high needs)
Mainstream free schools get extra funding for pupils aged 5 to 19 with high needs from the local authority which commissioned the place. These pupils usually have an education, health and care plan.
We expect schools to fund the first £6,000 of additional educational costs (over and above standard teaching and learning) for each high needs pupil from their own budget.
More information about high needs funding is available.
Universal infant free school meals
State-funded schools in England must provide free lunches to infant pupils who are not otherwise entitled to benefits-related free school meals.
Schools will receive an initial provisional payment in October based on:
-
the pupil numbers estimate we use to issue your indicative funding letter
-
the average universal infant free school meals take up rate in your local authority
We will adjust it to reflect actual pupil numbers in July. We will base this on meal take-up to date from the October and January school census. The July payment will also include an additional allocation for the first 2 terms of the next academic year.
Find out more about universal infant free school meals.
Post-opening grant - central route projects only
We provide 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 it at the following rates:
-
£250 for each new mainstream pupil in the primary phase (reception to year 6)
-
£500 for each new mainstream pupil in the secondary and 16 to 19 phases (years 7 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 amount we pay depends on how many year groups (cohorts) are empty. We pay it in equal monthly instalments.
Primary
| Number of year groups empty | Funding amounts |
|---|---|
| 6+ | £80,500 |
| 5 | £67,500 |
| 4 | £54,000 |
| 3 | £40,500 |
| 2 | £27,000 |
| 1 | £13,500 |
| Maximum | £283,000 |
Secondary (regardless of whether the school plans to have a sixth form)
| Number of year groups empty | Funding amounts |
|---|---|
| 4 | £125,000 |
| 3 | £93,500 |
| 2 | £62,500 |
| 1 | £31,000 |
| Maximum | £312,000 |
All-through (regardless of whether the school plans to have a sixth form)
| Number of year groups empty | Funding amounts |
|---|---|
| 6+ | £125,000 |
| 5 | £93,500 |
| 4 | £62,500 |
| 3 | £54,000 |
| 2 | £40,500 |
| 1 | £27,000 |
| Maximum | £402,500 |
Nurseries
Free schools do not receive funding under the free school programme for nursery places. To receive funding for nursery places, free schools should register with their local authority. They will provide funding for the government entitlements where appropriate.
From 2025 to 2026, the entitlements are:
- the 15 hours entitlement for eligible working parents of children from 9 months to 2 years old (increasing to 30 hours from September 2025)
- the 15 hours entitlement for disadvantaged 2 year olds
- the universal 15 hours entitlement for all 3 and 4 year olds
- the additional 15 hours entitlement for eligible working parents of 3 and 4 year olds
Government funding is intended to deliver 15 or 30 hours a week of free, high quality, flexible childcare. The 15 or 30 hours must be able to be accessed free of charge to parents. There must not be any mandatory charges for parents in relation to the free hours. Government funding is not intended to cover the costs of meals, other consumables, additional hours or additional services.
Local authorities should ensure childcare providers are aware they can charge parents for the following extras in connection with the free hours but these charges must be voluntary for the parent:
-
consumables to be used by the child, such as nappies or sun cream
-
meals and snacks consumed by the child
-
extra optional activities such as events, celebrations, specialist tuition (for example music classes or foreign languages) or other activities that are not directly related or necessary for the effective delivery of the early years foundation stage (EYFS) statutory framework
Providers can also charge parents for any additional, private paid hours according to their usual terms and conditions provided taking up private paid hours is not a condition of accessing a free place.
Local authorities must take all steps available to ensure the free entitlements are available free of charge and therefore that providers do not charge parents for certain services in connection with the entitlement hours, including top-up fees.
For further information on the entitlements, please see the early education and childcare statutory guidance for local authorities.
Free schools are also able to offer nursery provision which exceeds any local authority funded entitlement. This includes for under 3 year olds. Subject to your funding agreement, you can charge parents for these places. You can so this through a subsidiary company, or by contracting an independent provider who levies charges.
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 2026 to 31 August 2027) will be £29 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:
- an academies budget forecast return (BFR) by the end of August
- audited financial statements for the year ending 31 August, by the following December
- internal scrutiny summary report for the year ending 31 August, by the following December
- academies accounts return academies accounts return for the year ending 31 August, by the following January
- the land and buildings collection tool as at 31 August, by the following November
- a financial management and governance self-assessment within 3 months of opening
- a School resource management self-assessment checklist by the specified annual deadline
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.