Guidance

A guide to new special free school revenue funding: 2026 to 2027

Updated 7 September 2026

Applies to England

This guidance is for special 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:

• mainstream free schools
• alternative provision free schools
• 16 to 19 free schools
• special 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:

• commercial
• assets
• workforce
• developing capability, including digital and commercial skills

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.

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 do not have recommended minimal viable numbers (MVN) for pupils of special schools. These will depend on the specific type of provision and number of places that commissioners need.

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:

• per-place (FTE) funding
• pupil premium
• business rates grant
• special educational needs top-up funding (high needs)
• legacy (staff costs) funding
• universal infant free school meals (FSM)
• post-opening grant (free schools set up through the local authority presumption route are not eligible for this grant)

Special free schools are established in response to demand from local authorities, and their support is essential. Trusts would need to have supplied evidence of demand to support the establishment of the school.

Funding in special free schools comprises of:

• per-place funding for all places for pre-16 and 16 to 19 pupils with education, health and care (EHC) plans
• top-up funding for each pupil placed in the free school

DfE pays the fixed per-place funding for a number of places which is subject to regular review. The per-place rate is £10,000 in 2026 to 2027.

The top-up funding comes from the local authority commissioning the place. The local authority determines the funding based on the pupil’s assessed needs and the cost of meeting those needs in the school. The special free school gets this top-up funding for as long as the pupil attends the school. The local authority pays the top-up funding directly to the school. More information about high needs funding is set out in the high needs funding: 2026 to 2027 operational guide.

Special schools can only admit pupils without EHC plans in certain circumstances. The SEND code of practice and your funding agreement provides more information.

Special free schools’ continuing financial viability depends on the ongoing support of local authorities, both in terms of a commitment to commission placements, and their willingness to provide associated top-up funding.

We base place funding for the first year on the evidence you provide in pre-opening of the estimated number of FTE places required for the number of pupils attending the free school. You will have to provide evidence of commissioned places during pre-opening.

We include funding for special free schools in local authorities’ high-needs allocations. The local authority will propose the number of places we fund at special free schools from their second year of opening onwards through the place change notification process. The local authority will consult with the free school.

Further information on high-needs funding is available.

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 we will pay you on the sixth working day of the month.

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 2026 to 2027 financial year schools receive funding for each pupil registered as eligible for free school meals 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

If a pupil has registered as eligible for free school meals at any point in the last 6 years and has also left local authority care for one of these reasons, they will attract funding.

We make pupil premium payments in quarterly instalments. We calculate a school’s pupil premium allocation from the information it submits in the Autumn school census. We apply allocations from the start of the next financial year (April), paid in arrears so you will receive the first payment 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.

Children from service families attract a separate grant – the service pupil premium. This grant is to support of children whose parents are or were in the armed forces.

Legacy staff pay and pension employer contribution funding

In 2025 to 2026, schools received additional funding to support the cost of pay rises and increases in national insurance contribution rates.

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 (DSG), 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 2027.

Business rates grant

Free schools pay business rates at the 80% discounted charitable rate.

We expect special free schools to be exempt from business rates because their pupils fall within the disability exemption. Free school trusts should apply to the local Valuation Office Agency to seek such an exemption.

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 FSM.

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 funding amounts.

PE and sport premium

Free schools with primary age pupils receive PE and sport premium. We base this on the number of pupils in years 1 to 6. In cases where schools may not have set year groups (for example, in some special schools), we base this on the number of pupils aged 5 to 10. This grant is to make improvements to the quality of physical education (PE), physical activity and sport schools offer. We pay this separately to general annual grant funding.

We base school allocations on the January school census. For example, January 2025 census for the 2025 to 2026 academic year. For free schools that open in September 2026, we will base the funding will on the data from the autumn 2026 census. We will make payments in the following March.

The free school will receive PE and sport premium funding for a new academic year from DfE in 2 separate payments. These are:

• 7/12 of the funding allocation in November 2026 (or in March 2027 for new schools)
• 5/12 of the funding allocation in May 2027

Post-opening grant - central route projects only

We provide special 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 pupil in the primary phase (reception to year 6)

• £500 for each new 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.

The leadership element for special schools is a fixed-rate payment of £170,000. 50% in the first year, 30% in the second, and 20% in the third. We pay it in equal monthly instalments.

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 DfE accounting officer, 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.