Guidance

Schools budget support grant 2026: conditions of grant

Published 8 July 2026

Applies to England

Introduction  

Legislation

The schools budget support grant 2026 (SBSG 26) 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.

Purpose

The Department for Education (DfE) will provide schools additional funding in financial year 2026 to 2027 to support them with overall costs, including the:

• costs of the schools teacher pay award from September 2026
• local government services pay award in respect of support staff in 2026 to 2027

We are providing around £635 million in the financial year 2026 to 2027 through the SBSG 26 to support with increased costs for:

• mainstream schools (for reception to key stage 4 provision) including special units and resourced provision (£522 million)
• special, alternative provision (AP) and hospital schools (£98 million)
• local authority centrally employed teachers and support staff (£14 million)

We are also providing:

• £18 million for schools with early years (EY) provision
• around £49 million for post-16 provision in schools and academies

Taken together, this is an increase of £700 million in financial year 2026 to 2027 for schools.

Funding for 16 to 19 provision in schools and academies will be delivered via 16 to 19 allocations. Further information can be found on 16 to 19 funding: information for 2026 to 2027.

Funding for EY settings is being allocated through the early years teachers’ pay grant (EYTPG) 2026.

Period

These conditions of grant cover the financial year 2026 to 2027.

The funding for:

• mainstream primary, secondary and all through schools will be incorporated into core budget allocations for 2027 to 2028, by being rolled into the schools national funding formula (NFF) for 2027 to 2028
• special, AP and hospital schools will be incorporated into the high needs funding block of the dedicated schools grant (DSG) for 2027 to 2028
• local authority centrally employed staff (CES) will be rolled into the central schools services block (CSSB) for 2027 to 2028

Eligibility 

Types of settings

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

• reception to key stage 4 provision in maintained mainstream schools
• special units and resource provision (SURPs) located within mainstream schools
• maintained special schools and pupil referral units
• special and AP academies and free schools
• independent special schools
• hospital schools and other providers of hospital education

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

• reception to key stage 4 provision in mainstream academies and free schools (including studio schools and university technical colleges), excluding the funding relating to academies’ and free schools’ SURPs which is paid through local authorities
• city technology colleges
• non-maintained special schools

Local authority centrally employed teachers and support staff

Local authorities are eligible to receive funding for their CES.

Dependent on local definitions, it may cover the following teachers and support staff:  

• peripatetic teachers
• music teachers and support staff employed by the local authority that are part of the music hub partnership
• home tutors
• teachers who are employed by education authorities to provide education in institutions other than schools (for example hospitals, home tuition, assessment centres and pupil referral units)

Payments 

Calculation 

Allocations of this grant have been calculated using the methodology provided in the SBSG 26 methodology.  

Payment timetable

For the 2026 to 2027 financial year DfE will pay SBSG 26 as follows:

• payment 1 - the main allocation to all local authorities (for local authority centrally employed teachers (CET) and their maintained schools), academies (including free schools and city technology colleges) and non-maintained special schools
• payment  2 - to take account of new and growing schools and updated data for special and AP schools

Payment	Local authorities	Non –maintained Special schools	Academies
Payment 1	30 October 2026	30 October 2026	9 November 2026
Payment 2 where applicable	31 March 2027	31 March 2027	8 April 2027

Mainstream school closures, openings and academy conversions

For mainstream schools that open in September 2026, we will:

• confirm SBSG 26 allocations in February 2027
• make payments in March 2027 for  local authority maintained schools and April 2027 for academies

We will calculate their allocations using pupil number data from the October 2026 census. 

The allocation will be pro-rated to the proportion of the 2026 to 2027 financial year that the setting is open.

DfE will make a revised allocation to mainstream schools that are not fully open and are still growing their year groups since opening. This is schools that have been open for fewer years than the number of year groups in the setting at the start of the autumn term 2025. DfE will confirm the setting’s final allocation for 2026 to 2027 in March 2027, revising the indicative allocations published in October 2026. The revised allocation will be based on pupil numbers in the October 2026 school census. 

Closures

If a school closes during the financial year, the local authority (for maintained schools) should allocate the grant for the proportion of the financial year the setting is open.

Academy conversions

Local authorities should pay SBSG 26 allocations to any and all schools listed as maintained schools in the local authority area on the relevant allocation spreadsheet. In a small number of cases, schools that convert to academy status on 1 October 2026 will still be listed as local authority-maintained schools. In such cases, DfE will pay the funding directly to the successor academy.

The grant allocation is intended for the school and it will be assumed the local authority passed on the entire grant funding to the school immediately upon receipt from DfE. In addition, any unspent grant funding should remain with the school after it converts. 

In respect of calculating a school’s final accounts, any pro-rated amount up to the point of conversion is included in the balance calculation for the school. The remaining amount which relates for the period after the school has converted should be accounted for by the academy.

Local authority duties

Local authorities will be required to certify that:

• they have passed on the correct amount of funding to schools
• where funding has been spent centrally, that it has been spent in line with these conditions of grant

DfE will issue a certification form in spring 2027. Local authorities must pass funding on to their maintained schools in a timely manner in line with their scheme for financing schools.

Mainstream schools

Local authorities must pay SBSG 26 funding to each:

• maintained primary and secondary school
• all-through maintained school
• maintained school, academy and free school with a SURP

School level allocations will be published in October. Local authorities can increase the funding for mainstream school SURPs in the event that places are locally funded and not included in the published place numbers, using SBSG 26 or other high needs funding.

Local authorities must comply with the condition above irrespective of any deficit relating to the expenditure of the school’s budget share.

SBSG 26 funding for mainstream schools is not part of:

• maintained schools’ budget shares and academies’ general annual grant
• the individual schools’ budget

Special and AP schools, and other providers of hospital education

Local authorities must comply with the following requirements in setting their local arrangements for passing on the 2026 to 2027 SBSG 26 funding to:

• the schools they currently maintain
• academies they previously maintained
• free schools located in their area
• schools and other providers of hospital education

Local authorities must allocate an amount:

• per place for each eligible school
• for each hospital education provider

For these allocations local authorities can:

• use the rates and place numbers that DfE used for their allocations
• vary the amounts and place numbers to take into account local circumstances and locally funded places following consultation with their schools

In all cases, local authorities must distribute 100% of the total funding allocated for special, AP and hospital schools, and their mainstream schools with SURPs.

Once local authorities know their SBSG 26 allocations they should confirm the allocations for individual special schools, AP and hospital schools, taking account of the relevant funding rates and their:

• maintained schools’ place numbers for academic year 2026 to 2027
• local academies’ and free schools’ place numbers for academic year 2026 to 2027

This will give them certainty over their 2026 to 2027 budgets as soon as possible.

Independent special schools

The allocation methodology that a local authority applies to its maintained schools, academies and free schools is not applicable to independent schools that are funded by the local authority for their placement of pupils with SEND. This element of SBSG 26 funding allocated to local authorities, based on their independent school placements, is to support:

• a contribution to any increase in high needs placement fees for 2026 to 2027 already charged by independent schools on account of any increase in teachers’ and other staff salary costs arising from the 2026 pay awards applicable to the public sector
• the payment of any increase in school fees for 2026 to 2027 if, due to the timing of fee and salary agreements, those costs have not been reflected in the fees already charged for 2026 to 2027

Permitted use of funding

Academies and non-maintained special schools must only spend SBSG 26 funds for the purposes of the school. 

Local authorities must ensure that their maintained schools only spend SBSG 26 funding for the purposes of the school and in accordance with their local scheme for financing schools.

Local authorities must use the funding allocated for CES to support the schools budget as defined in the School and Early Years Finance (England) Regulations 2026. It can be used for no other purpose.

Assurance

Carry forward

In all local authorities and schools, SBSG 26 funds may be carried forward past March 31, 2027.

Records required

Local authorities and settings are required to maintain and keep clear records of income and expenditure in relation to this grant including evidence of the use of funds.

Further information

Books, other documents and records relating to the recipient’s accounts shall be open to inspection by the Secretary of State for Education 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 recipient has used its resources.

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

Variation 

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

Recovery of funding

If a local authority or setting fails to comply with the terms and conditions set out in this document, the Secretary of State may recover some or all SBSG 26 funding that has been allocated. This will be notified in writing to the local authority, school or college.

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

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.

Overpayments

If a setting or local authority 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 or school will be notified of this in writing.

Enquiries 

For queries relating to these terms and conditions use the customer help portal.