Dedicated Schools Grant consultation: Mainstream schools document 2025

The Dedicated Schools Grant (DSG) is a ring-fenced grant provided by the government for the financing of schools' budgets, the provision of high needs and early years services, and the central provision of local authority (LA) responsibilities for all schools.

The DSG is constituted of four blocks that combine to form the overall ring-fenced grant: Schools Block, High Needs Block, Central School Services Block and the Early Years Block, together totalling £941.662m[1] in the 2025-26 financial year.  Each block is distributed to local authorities based upon a national funding formula per block, including a National Funding Formula (NFF) for mainstream schools and an Early Years National Funding Formula (EYNFF) that each consider various factors including pupil numbers and characteristics.

Allocations of DSG made by the Department for Education (DfE) to local authorities based on the NFF and EYNFF are updated annually to reflect any increases in funding made available by the Government, as well as any new conditions or rules for allocations to schools at local authority level.  So far, the DfE have not provided an indication of the level of DSG funding for 2026-27 but have published a summary policy document[2], which sets out limited information to allow some planning, including the DfE's intention to use the same National Funding Formula factors as in 2025-26, and to roll the Schools Budget Support Grant and National Insurance Grant into the NFF for 2026-27,

Each local authority is responsible for ensuring that DSG funds are used appropriately, including the distribution of the Schools Block and Early Years blocks of the DSG to schools and early years providers within the allowable rules set out in DSG guidance and conditions issued by the DfE.  Each local authority is required, under regulations[3], to set up and maintain a Schools Forum which must be consulted on certain funding issues including any proposed changes to the funding formulae for schools and early years providers.  In addition, local authorities are also required to consult with schools and early years providers for any changes to the funding formulae. 

The Local Authority (LA), Norfolk County Council, will review the outcome of the consultation responses and prepare relevant inputs for Schools Forum Members ahead of their November meeting, where views, recommendations and decisions will be sought, as appropriate, for the individual elements.

Ultimately, the LA is the decision-maker for the final local funding formulae (though Schools Forum Members do have some related decision-making powers, e.g. for the de-delegation of services)[4].  The feedback received from schools and early years providers through the consultation informs the views and recommendations from Schools Forum Members, and so are an important part of the decision-making process.

The results of the consultation will also inform further work on High Needs funding arrangements for medical needs alternative provision.

The timing of the consultation during October, and the subsequent November Schools Forum meeting, allows for any disapplication of regulations requested (in certain circumstances) to be submitted to the Secretary of State within the usual timescales expected, and for budgeting deadlines to be met including the submission of the DfE's Authority Proforma Tool in January.

Final recommendations for the local funding formula for 2026-27 will be presented to Norfolk County Council's Cabinet in January for their recommendation, with the Full Council due to agree the final budget in February 2026.  

This timeline means that schools, early years providers and settings will be informed of their final budgets by 28 February 2026.

If you would like to know more about the Dedicated Schools Grant and how schools funding and / or early years funding works, then please visit The Dedicated Schools Grant  on the Schools and Learning Providers website.

[1] Source: Dedicated Schools Grant 2025-26, Norfolk

[2] Schools national funding formula (NFF) summary policy document for 2026 to 2027 - GOV.UK

[3] The Schools Forums (England) Regulations 2012 (legislation.gov.uk)

[4] Source: Schools_forums_powers_and_responsibilities.pdf

Norfolk's Dedicated Schools Grant (DSG) consultation takes place at a time of significant challenge and opportunity for the education and inclusion system. Mainstream schools across the county are operating under significant financial pressures, with budgets and resources stretched.  These pressures are not only a local concern, but reflect a national picture, where the sustainability of school funding is under increasing scrutiny.

At the same time as those financial pressures are being seen, there is increasing identification of additional and special educational needs in schools, with a greater proportion of children than ever are being educated outside of mainstream schools.  Again, this is a picture seen both locally and across the country.

This consultation comes at a time of a wider national reform agenda, with the whole sector (and country) awaiting Government announcements about Special Educational Needs and Disabilities (SEND) and Alternative Provision (AP) reforms and the outcome of the Curriculum and Assessment review.  The Government have indicated that SEN reforms will now be announced this autumn and be encompassed as part of a Schools White Paper.  This is expected to set out a reformed vision for inclusion, accountability and funding.

The delay in their publication continues to create uncertainty for local authorities and schools alike, alongside parents, carers, children and young people. Norfolk, like many areas, is awaiting clarity on the expectations for local delivery, the shape of future funding settlements, and the future of statutory overrides for DSG deficits.

Despite these constraints, there is a strong and visible commitment across Norfolk's education system to work collaboratively to improve outcomes for all children. This includes a shared ambition to transform the experience and provision for children and young people with Special Educational Needs and Disabilities (SEND) and those requiring Alternative Provision (AP). Norfolk's Area SEND and AP Strategy (NASAPS) with its associated priorities and actions, along with the Local First Inclusion (LFI) transformation programme[1], are key vehicles for delivering this change.

NASAPS is a strategy for Norfolk co-produced with children and young people, Family Voice Norfolk, and professionals across health, education, social care, and the voluntary sector. The priorities are structured around five thematic areas:

• My Learning and Development
• My Changes and New Beginnings
• My Adult Life
• My Family is Supported
• My Friends and Activities

The LFI transformation programme aims to rebalance the system by investing in inclusive practice, expanding specialist provision, and ensuring that funding follows need in a sustainable and transparent way.

In the face of the uncertainty currently faced across the system, Norfolk Local Inclusion Partnership (LIP), which oversees NASAPS and delivery of the strategy, is actively strengthening governance, engaging with children, families, and professionals, and using data to drive improvement.

This consultation is, itself, a key part of this journey—ensuring that schools, settings, and stakeholders have a voice in shaping the future of funding and provision. It also reflects our commitment to transparency, co-production, and evidence-led decision-making.

Whilst the DSG consultation may contain technical questions, it is not, ultimately, just a technical exercise - it is a strategic opportunity to align funding decisions with our collective mission: to ensure that every child in Norfolk, regardless of their needs or background, can flourish in a system that is inclusive, ambitious, and financially sustainable.

[1] Underpinned by Norfolk's Safety Valve agreement with the Department for Education (DfE)

This consultation is taking place from 3 to 24 October 2025 via an online survey.

The primary audience for this consultation is mainstream schools given the focus on the Norfolk's funding formula for distribution of the Schools Block.

However, all education leaders and settings are invited to take part in the elements that relate to the High Needs Block arrangements for Medical Needs Alternative Provision.

3.1 Consultation document

There are several parts to this consultation, and this report will address each one in turn and, where appropriate, will reference other elements of the consultation that are, or may be, related.

Published alongside this document are:

• Technical papers for Notional SEN (Special Educational Needs) and Minimum Funding Guarantee levels, available on the main Dedicated Schools Grant (DSG) consultation web page
• An online survey to be completed with your responses (please ensure that only one response is submitted per school)

Please do take the opportunity to read all of this information prior to submitting any responses to ensure that you are fully informed and aware of the work underway in Norfolk, the proposals related to funding and the engagement that is sought.

3.2 Briefing and engagement sessions

During the consultation period, we are holding briefing and engagement sessions (one face-to-face and two online) intended to support you to understand the contents of the consultation, how you can be a part of it and to support you to be able to respond effectively to the consultation.  

We would encourage all to also respond via the consultation survey at www.smartsurvey.co.uk/s/DSG-Consultation-mainstream-2025 after reading all the documentation.

The mainstream schools consultation briefing and engagement dates, times and locations, along with booking or joining links, are:

These events are also all listed at Schools, Colleges and Settings Key Events Calendar on our Schools and Learning Providers website.

As the consultation period goes on, we will publish responses to questions that arise during any of the consultation events alongside the consultation materials found on the Dedicated Schools Grant (DSG) consultation web page.

You can also find more about the grant information on The Dedicated Schools Grant

The areas for consultation are:

a.    Proposal for application of National Funding Formula principles, factors and values for Norfolk mainstream schools

b.    Approach to Schools Block to High Needs Block funding transfer consideration

c.    Amending Notional SEN percentage and methodology to reflect the removal of the block transfer alongside the ongoing, annual Notional SEN percentage increase towards the national average

d.    Review of different Minimum Funding Guarantee (MFG) levels for ensuring affordability of the mainstream schools funding model

e.    High Needs funding arrangements for Medical Needs Alternative Provision

f.     LA maintained schools only: Changes to Scheme for Financing Schools

As previously advised, no information has been received from the Government regarding the overall level of Dedicated Schools Grant (DSG) funding, or the National Funding Formula factor rates for mainstream schools for 2026-27.

Historically, the Department for Education (DfE) provided provisional DSG allocations in July for the next financial year covering each of the four funding blocks.  The Local Authority (LA) would then use this provisional information to provide illustrative funding allocations for the following financial year for each school in Norfolk, within technical papers, to demonstrate the potential implications of any proposed changes to the funding formula at an individual school level and to help to inform consideration of the consultation questions.

So far, only a summary document[1] has been released by the DfE, which does not provide the required level of detail for modelling of 2026-27 technical papers.  However, the LA are of the view that it is important to go ahead with the consultation and to seek responses based on principles that can inform decisions that may need to be made quite quickly, rather than await further information expected during autumn but without a clear timeframe from the DfE.  Therefore, along with principle-based questions, technical papers based on 2025-26 financial year funding are provided as part of the consultation to inform responses.  The LA will provide updated technical papers utilising 2026-27 provisional information once this has been provided by the DfE.  This approach was supported by Norfolk's Schools Forum[2] at their meeting on 24 September 2025.

The LA need to be able to consult Schools Forum at their November and January meetings, and we hope that these are informed by additional detailed information from the Government to support financial planning at those points in time.  In the meantime, it is important for us to consult with the schools' sector on principle, to be able to have this feedback to combine with the information from central Government once received.

[1]  Schools national funding formula (NFF) summary policy document for 2026 to 2027 - GOV.UK

[2] Norfolk Schools Forum is a body set up by the local authority under the requirements of the Schools Forum (England) Regulations 2012, with a consultative role on DSG funding but also some decision-making powers as set out in Schools_forum_operational_and_good_practice_guide.pdf and Schools_forums_powers_and_responsibilities.pdf

The Dedicated Schools Grant (DSG) is a ring-fenced grant provided by the government for the financing of schools' budgets, the provision of high needs and early years services, and the central provision of local authority (LA) responsibilities for all schools, with funding distributed to the LA via national formulae (such as the schools National Funding Formula (NFF) or the Early Years National Funding Formula (EYNFF)) set utilising various factors including pupil numbers and characteristics.

The DSG is constituted of four blocks that combine to form the overall ring-fenced grant: Schools Block, High Needs Block, Central School Services Block and the Early Years Block, together totalling £941.662m[1] in the 2025-26 financial year:

The current financial year, 2025-26, is the first following the previous 3-year funding settlement. There is not yet a formal announcement regarding funding levels for 2026-27. We await further detail, expected in the autumn.

[1] Source: Dedicated Schools Grant 2025-26, Norfolk

7.1.    Factor / Values and Allowable Ranges

A National Funding Formula (NFF) is used to distribute Schools Block Designated Schools Grant (DSG) funding to local authorities for mainstream schools.

The National Funding Formula is currently an indirect formula, with DSG funding allocated to local authorities for local decision-making on the local formula to be implemented.  This local decision-making is following consultation with schools and Schools Forum and is required to be within the regulations using specified funding factors within a range of specified allowable values.

Since 2023-24 the government has required local authorities to move their mainstream schools' local formula closer to the National Funding Formula, transitioning towards the implementation of a direct national funding formula over time at 10% per year, except where the local formula already 'mirrors' the National Funding Formula by being within 2.5% of the Department for Education's (DfE) published factor values.  Norfolk already 'mirrors' the NFF.

The DfE has stated that this requirement will continue in 2026-27, suggesting that the direction of travel toward a national approach continues.  However, at this time, the local authority has not received any formal confirmation from the current Government regarding its intention to either pursue or depart from the principle of a direct National Funding Formula that would remove local aspects and / or adjustments within final allocations to schools.

7.2. Factor / Values and Allowable Ranges

The National Funding Formula (NFF) is made up of multiple funding factors and values either on a per-pupil or per-school basis.

The formula set at a local level by each local authority (LA) is expected to utilise all funding factors with the local values utilised being within allowable ranges set out for each authority by the DfE.

In Norfolk, we previously moved to align with mirroring the NFF factor values early on.  For 2025-26 the local values were slightly varied (lowered) compared to NFF values to ensure affordability of the model (negating the need for a cap upon gains).  Norfolk's formula is still considered to be mirroring the NFF by the DfE, as Norfolk's formula factor values remained within 2.5% of the published NFF factor values.

For reference purposes, Norfolk's current funding factors compared to National Funding Formula in 2025/26 are shown in the table below.  Please note that the DfE have not yet provided the NFF funding values for 2026-27 so these values subject to update:

* Acronym definitions:
- FSM = Free School Meal
- IDACI = Income Deprivation Affecting Children Index

The DfE usually publish an allowable range of funding factor values for each authority each year, based on the National Funding Formula, to support the intention for all LAs' allocation formulae to become closer to the National Funding Formula values funded through DSG.  This has not yet been published for 2026-27.

7.3. Presumption for application of National Funding Formula principles, factors and values for Norfolk schools

While the new Government has not explicitly confirmed it will continue with the previous Government's confirmed intention to move towards a direct National Funding Formula (NFF) - whereby funding would be allocated directly to schools based on a single formula (i.e. resulting in the removal of local aspects and / or adjustments within final allocations to schools) - the continuing requirement for a 'tightening' of local formulae towards National Funding Formula factor values suggests that this will remain the national direction of travel.

As already noted, Norfolk already 'mirrors' the DfE's NFF principles, factors and values as shown in relation to the 2025-26 formula facts and values.  Given the national guidance to date and Norfolk's previous decisions, it is presumed that the NFF principles, factors and values will continue to be applied in the Norfolk formula for 2026-27 and that this formula will continue to 'mirror' the NFF.

Therefore, there is no specific consultation on this aspect of the local formula, and this information is included for reference and context for elements that are to be consulted upon.

7.4. Action upon receipt of the 2026-27 provisional DSG allocations

It is possible that the DfE will publish provisional DSG allocations for 2026-27 during the consultation period. 

If this occurs, the LA will consult with the Chair and Vice-Chair of Schools Forum to agree on a course of action, including consideration of:

• The publication of revised technical papers
• Any extension of the consultation period
• Any additional questions for the survey, and / or
• The addition of any additional briefing sessions

Consideration will need to be given to ensuring that the consultation is live for a sufficient period of time, along with sufficient time to analyse the responses to the consultation, prior to Schools Forum meeting, whilst remaining within a timescale suitable to meet the DfE's requirements for submission of Norfolk's final funding formula.

Alternatively, if further information is received from DfE following the consultation period, the LA will:

• Publish the provisional DSG allocations
• Share further technical papers to assist schools' planning for 2026-27
• Inform the Chair and Vice-Chair of Schools Forum and agree whether any additional Schools Forum consideration is required.

Executive summary

For a number of years, Norfolk has transferred a portion of the Dedicated Schools Grant (DSG) Schools Block funding to the High Needs Block each year, as permitted by national regulations. This principle is part of Norfolk's current Safety Valve agreement, which presumes a 1.5% annual transfer until the High Needs Block (HNB) deficit is resolved.

This practice is intended to support high needs provision for the high number of pupils educated outside of mainstream education in Norfolk as well as seeking to mitigate the high level of High Needs Block (HNB) deficit.

However, after extensive engagement with school leaders and Schools Forum over several years, the Local Authority (LA) is of the view that continuing the block transfer is counterproductive. In effect, the approach has resulted in funds being removed from mainstream schools and then redistributed back to them via Element 3 (top-up) funding, creating inefficiencies and challenges for mainstream inclusion strategies.

For 2026-27, the LA proposes to end the block transfer, allocating all Schools Block funding directly to mainstream schools via a local formula that closely mirrors the national one. The funding previously provided as Element 3 will instead be built into schools' core budgets, and the HNB's Element 3 budget will be adjusted accordingly. This change aims to provide schools with greater certainty and stability of funding, increase accountability for supporting pupils with high needs SEND, and encourage mainstream inclusion.

The LA recognises that there will be a need to review the Notional SEN budget in line with this change, and this is covered later in the consultation.

The proposed changes will result in increased budgets for the majority of schools due to the mechanics of the funding formula (all else remaining equal), but some schools will not see a change as they would continue to benefit from funding protections that are a feature of the formula.

In summary, the LA's current position is that consulting on a block transfer for 2026-27 would contradict previous collaborative efforts and the drive for mainstream inclusion.  The LA will engage with Schools Forum if, at a later point in time, the LA is required by the Department for Education to pursue a block transfer.

8.1. Background of Block Transfers in Norfolk

The DSG Schools Block is ring-fenced in line with the Dedicated Schools Grant (DSG) conditions of grant, but local authorities can transfer up to and including 0.5% of their Schools Block funding into another block, for example the High Needs Block, with the approval of their Schools Forum.  Without Schools Forum agreement, or where they wish to transfer more than 0.5% of their Schools Block funding into one or more other blocks, local authorities must submit a disapplication request to the Secretary of State.

Norfolk's currently approved Safety Valve agreement with the DfE (underpinning Norfolk's Local First Inclusion transformation programme) assumes a year-on-year transfer of c. 1.5% between the Schools Block and the High Needs Block until in-year balance is achieved and is sustainable, and the resolution of the cumulative HNB deficit.  This was accompanied by a significant increase in Element 3 funding back to mainstream schools.

Over multiple years, the Local Authority (LA) has undertaken significant engagement with multiple school leaders, previous DSG consultations and consultation with Schools Forum in relation to the benefits and challenges of a Schools Block to High Needs Block transfer.  This engagement and listening has led the LA to the view that:

• The block transfer is counter-productive when considering the whole system
• That it is not delivering in line with its original purpose, which was to support the funding of high needs provision for an increased number of students outside of mainstream provision and, therefore, increased pressure on the high needs block. 
• Instead, it is removing funding from mainstream schools at a time when Norfolk's strategy, along with the national narrative, is to increase mainstream inclusion. 

In Norfolk, this has led to a cycle of funding being removed from the Schools Block and a significant increase in Element 3 (top-up) funding from the High Needs Block into mainstream schools; in effect, removing monies from mainstream schools to then, effectively, redistribute via Element 3 (top-up) funding.

8.2. Proposed block transfer approach for 2026-27

Therefore, the LA proposes to remove the block transfer from the Safety Valve agreement for 2026-27 onwards.  In effect, this would mean:

• All Schools Block funding is allocated to mainstream schools via the local formula (mirroring the national formula as closely as possible)
• Funding in 2025-26 allocated via Element 3 would, in effect, be 'reallocated' via the Schools Block funding formula into mainstream schools' core budgets, equivalent to the existing block transfer (£9.7m in 2025-26)
• The Element 3 budget of the High Needs Block would be adjusted to reflect that the funding is already held within mainstream schools

This would enable the maximum funding into mainstream schools allocated via the National Funding Formula, supporting schools to have certainty of resource and to plan effectively, whilst also enabling increased accountability of all mainstream schools to support children with high needs SEND. 

The direction was set during 2024-25 when the new Element 3 model was confirmed, with funds equivalent to the block transfer from September 2025 allocated to schools as formulaic Element 3.  Distribution was based upon the local funding formula and how funds would have been allocated for that period of time if the block transfer had not existed.  This approach recognised that these funds were for SEND provision and were taken into consideration, along with a school's notional SEN allocation, when considering the funding of SEND provision within a school's Graduated Provision Map and, therefore, what additional cohort Element 3 funding they may require. 

Without the block transfer in place, it will be necessary to consider amending the size of the Notional SEN budget in Norfolk to support the same level of resource in Norfolk to continue to be utilised for SEND provision.  This is considered later in the consultation.

8.3. Impact upon schools' budget allocations

Due to the mechanics of the mainstream schools funding formula (mirroring the National Funding Formula), not all schools will see increases in their budgets as a result of this change (if all else remained equal, i.e. there is no change to pupil numbers, characteristics, factors and values).

This is because the funding formula restricts growth in funding for some schools to support protections that ensure that all schools have a Minimum Per Pupil Level (MPPL) of funding and that schools are protected that would otherwise see reductions on a per-pupil basis.  Please later sections on the Minimum Funding Guarantee for more information.

This situation would occur regardless of whether there is a block transfer in place, but the impact is accentuated when one exists.  This means that some schools are disproportionately impacted by a block transfer, i.e. they do not receive significant gains in funding that they would have received due to reduced values for all factors combined with funding required from the overall Schools Block allocation to cover the costs of protections (MPPL and MFG).

As detailed above, in preparation to move away from a block transfer, the decision was taken for formulaic Element 3 to be distributed from for the autumn and spring terms utilising the 2025-26 local funding formula. 

• The amount distributed is based upon the proportion of the £9.7m (1.43%) 2025-26 block transfer relating to those two terms (c. £5.7m). 
• The distribution of these funds reflected the impact of both schools being allocated additional gains, alongside reductions in the protection mechanisms in the formula required. 
• This reflected what would have happened in 2025-26 if there had been a lower block transfer. 

In effect:

• Some schools saw significant allocations of formulaic Element 3 (i.e. those that had growth restricted due to protections and the block transfer);
• Others saw a moderate allocation (i.e. where they may have had some protections that would then no longer be required);
• Others saw no allocation (i.e. where the level of protection required was reduced but not eliminated).

Removing the block transfer for a whole year would mean that the majority of schools would see an increase in their core budget from the Schools Block (if all else remains equal).  But, similar to the 2025-26 formulaic Element 3 allocations, there will still be some schools who will only see a small increase or nothing at all.  In a small number of cases, schools would actually see a very small reduction due to the interplays of protections unwinding.

The initial six columns (D to I) of the Notional SEN technical paper (v2) (Excel doc, 109 KB) provide an illustration of the impact of removing the block transfer both in terms of cash changes and impact upon MFG and MPPL protections.  This uses 2025-26 allocations, funding, factors and values and presumes no other changes. 

8.4. Link with funding for SEND provision

Under the new Element 3 model, schools are capturing their SEND provision on Graduated Provision Maps with consideration given to Notional SEN allocations and any formulaic Element 3 for the school when allocating Element 3 funding at a cohort level.   This means that any school who did not receive much, or any, formulaic Element 3 has not been disadvantaged in 2025-26 - where effective and efficient provision is required to meet identified needs, then it is funding has been identified via one of these sources.

There will be no need for formulaic Element 3 funding in 2026-27 if there is no block transfer in place, because this proportion of funds would already be held within the mainstream sector.

Presuming that Notional SEN allocations are updated to reflect this shift of resource from the High Needs Block to the Schools Block year-on-year (see later in the consultation), an expectation would remain that schools across Norfolk would still be expected to utilise similar resources for SEND provision, but:

• Schools would have greater stability of the funding
• Funding would be more closely aligned to the NFF factors and values
• And, alongside the new approach to Element 3, schools can plan effectively and efficiently for high levels of inclusion with the mainstream system to support children with high SEND

8.5. Summary

In summary, at this time, the LA are of the view that it would be contrary to the previous collaborative work with schools, and the intention to support increased inclusion in mainstream schools, to consult on a block transfer for 2026-27 as this would be in direct contradiction to our previously stated view. 

These materials are intended to transparently lay out the impact of moving away from a block transfer and it should be recognised that the impact will be different for different schools.  

It should be noted that the principles describe presume no significant change to the funding landscape for schools and based upon the best available information to the LA at the time of launching the consultation.  Clearly, the principles discussed may need to be reconsidered once long-awaited reforms are announced.  If this is the case, the LA commits to continuing an open and honest dialogue to seek the right solutions for Norfolk schools and pupils.

The LA has made this case to the DfE and, whilst the LA continue to have a dialogue with the DfE regarding Norfolk's Safety Valve agreement, the LA has not yet had confirmation from the DfE of agreement to this amended approach.

If the DfE subsequently require the LA to apply for a block transfer, the LA will engage with Schools Forum to seek their view, utilising previous consultation and engagement feedback received from school leaders.

Executive summary

Notional SEN (Special Educational Needs) allocations refer to portions of a mainstream school's budget that are earmarked, though not separately allocated, to support pupils with SEND (Special Educational Needs and Disabilities). This allocation forms part of the Schools Block of the Dedicated Schools Grant (DSG) and is determined by local authorities (LAs) through their local funding formula, following consultations with schools and relevant forums. Importantly, the Notional SEN budget acts as a guide for schools' spending decisions on SEND provision but does not alter the actual funding received by schools.

Mainstream schools are expected to use their Notional SEN allocation to cover the costs of provision for pupils requiring SEN Support, as defined by the SEND Code of Practice, and to contribute towards the costs for pupils with high needs (up to £6,000 per pupil per year). It is worth noting that the Notional SEN budget is not designed to provide £6,000 for every pupil with SEND, as many require less expensive support, and effective high-quality teaching along with inclusive learning environments and curriculum may reduce the need for additional provision.

Historically, Norfolk's Notional SEN budget was significantly below the national average, prompting local and national calls for increases to bring it in line with other areas. Incremental changes were introduced from 2024, with further adjustments planned for 2025-26 and 2026-27. As of 2025-26, Norfolk's Notional SEN budget stands at £60.8 million, representing 9.11% of its Schools Block funding, still trailing the national average of 12.1%. The calculation is based on several factors, including per-pupil entitlement, deprivation indices, low prior attainment, and a proportion of school lump sums.  The methodology for calculating Notional SEN in Norfolk was updated in line with Department for Education (DfE) guidance for 2025-26.

Additionally, as covered previously in the consultation, the LA proposes removing the Schools Block to High Needs Block transfer.  This results in funding that had been used for mainstream SEND provision being reallocated back into the Schools Block from the High Needs Block (comparing year-on-year).  There is a proposal to amend Norfolk's Notional SEN allocation budget to replicate the 2025-26 block transfer funding. This would move Norfolk's Notional SEN allocation to 10.41%.

Alongside this, the LA proposes continuing to increase the size of the Norfolk's Notional SEN allocation to progress towards the previously reported national average.  This would move Norfolk schools towards the expectations of those in many statistical neighbour authorities and is particularly important as Norfolk participates in the DfE 'Safety Valve' programme, which requires demonstration of alignment with national expectations.

The proposals are for an increase of formula funding included in the Notional SEN allocations of 1.69% (to align with the 2025-26 national average of 12.1%) or 1.09% (to align with the previous national average of 11.5%).

It is important to emphasise that these adjustments do not represent additional funding for schools, but rather to identify a larger proportion of schools' overall budgets as Notional SEN, providing a guide for schools' SEND spending decisions. Norfolk's approach to Notional SEN closely follows DfE recommendations, using a blend of pupil entitlement, deprivation, and low prior attainment factors to ensure resources are appropriately identified for supporting pupils with SEND.

9.1. What are Notional SEN Allocations

Notional SEN refers to a portion of a mainstream school's budget that is identified (but not separately allocated) to support pupils with SEND.  It is not a separate pot of money, but rather an indicative amount within a school's overall budget.

As part of the Schools Block of the DSG, LAs are responsible for calculating the amount of this notional budget within their local mainstream schools funding formula factors.  LAs are expected to decide on the formula, following discussions and consultation with schools and Schools Forum in relation to both the size the Notional SEN budget and methodology for allocation, and are expected to ensure that this is kept under review.

In any consideration of Notional SEN (element 2) funding it is important that it is remembered that it is a notional allocation only and does not change actual budget allocations for schools.  Instead, it is an identified amount within a maintained school's delegated budget share or an academy's general annual grant that is intended to inform school's spending decisions.  It is neither a target nor a constraint on a school's duty to use its 'best endeavours' to secure special provision for its pupils with SEND.

Mainstream schools are expected to:

• Meet the costs of special educational provision for pupils identified as having special educational needs within the definition of 'SEN Support' (i.e., those pupils with SEND but who do not have an Education Health and Care Plan) in accordance with the SEND Code of Practice (Children & Families Act 2014); and
• Contribute towards the costs of special educational provision for pupils with high needs (some of whom have education, health and care (EHC) plans), up to the high needs cost threshold set by the regulations (currently £6,000 per pupil per annum). This cost threshold is calculated by reference to the additional costs of provision, above the costs of the basic provision for all pupils in the school. High needs top-up funding is provided above this threshold on a per-pupil basis by the LA that commissions or agrees the placement.

It is important to note that the Notional SEN budget is not intended to provide £6,000 for every pupil with SEND, as most pupils' support will cost less than that, if anything directly at all.  It should be taken into consideration that no additional provision may be required if inclusive learning environments, curriculum and high-quality teaching are in place. Nor is the Notional SEN budget intended to provide a specific amount per pupil for those with lower additional support costs, even though the LA may make reasonable assumptions about what those costs might be for the purpose of ensuring that their schools' Notional SEN budget calculation is realistic.

It has always been important to achieve consistency across the county for SEND funding and for access to specialist services, and formula funding, locally and nationally, is the mechanism that aims to achieve this in an objective way.  However, in addition to the obvious reasons that consistency should be an aim, there are pragmatic reasons that relate to the allocation of additional funding.  We need to be certain, for example with the allocation of Element 3 funding (top-up funding from the High Needs Block), that schools have access to support where this is necessary to ensure the inclusion of children and young people whilst also ensuring that the High Needs Block is not used incorrectly, where individual school budgets can and should be the source of funding.

9.2. Norfolk's Notional SEN Context

Historically, the Notional SEN budget in Norfolk was very low compared to both national averages and statistical neighbour authorities.  This meant that, in Norfolk, there was a much lower expectation of the proportion of core schools' budgets to be used for SEND provision than our statistical neighbours, and on average across the whole country.  This was an issue recognised locally, particularly given the growing cohorts of children (and, therefore, the proportion of the school population) with identified SEND.

It was also identified by the DfE, who have been previously clear that they expect Norfolk's Notional SEN to move towards the national average, linked with Norfolk being part of the DfE's 'Safety Valve' programme.  The DfE published national guidance[1], enabling review against other LAs and expected Norfolk to demonstrate that all reasonable steps were taken to align with national expectations.

This was particularly relevant in Norfolk due to the low rate of notional SEN funding, at 6.61% of formula funding in the 2023-24 financial year, compared to the national average at that time of 11.5% (as reported by the DfE in 2023-24)[2].

As a result:

• The LA first set out the need to consider changes to Notional SEN funding to Schools Forum during the autumn of 2022 and this led to inclusion in the DSG consultation in autumn 2023 and changes to Notional SEN % within budget shares from April 2024, and the methodology used from April 2025.
• In June 2025, the DfE provided the latest data regarding Notional SEN allocations in a summarised analysis of local funding formulae submitted by all LAs for 2025-26.  Section 20 of that analysis provided an overview of both the percentage of funding allocated to Notional SEN as well as the formula factors used to allocate it[3].
• Some 109 (72%) local authorities are allocating between 7.5% and 15% of Schools Block funding as Notional SEN.  The overall percentage of formula allocation which is designated as the Notional SEN budget across all local authorities in 2025-26 is 12.1%, which was a slight increase from 12.0% in 2024-25, although there remains a wide variation across local authorities.

The latest data available for statistical neighbours is for 2024-25.  Statistical neighbours are identified by central government.  - Norfolk did increase the % for 2025-26 to 9.11% from 7.61%, but statistical neighbours (especially those with lower percentages may well have also increased theirs):

Given these factors, and with the publication of operational guidance for Notional SEN funding in mainstream schools from the DfE, it is right that we continue to reflect further on Norfolk's below national average level beyond the additional total of 2.5% that was added in the 2024-25 and 2025-26 financial years.

9.3. Norfolk's Current (2025/26) Notional SEN Budget

Norfolk's current Notional SEN budget is £60.826m, representing 9.11% of Schools Block funding within the funding formula.

Norfolk uses basic per-pupil entitlement funding, FSM/FSM6/IDACI deprivation data, low prior attainment and part of schools' lump sums to calculate Notional SEN funding.

The table below summaries Norfolk's 2025-26 Notional SEN budget:

* Acronym definitions:
- AWPA = Age Weighted Pupil Allowance
- BPPE = Basic Per Pupil Element
- FSM = Free School Meal
- IDACI = Income Deprivation Affecting Children Index
- LPA = Low Prior Attainment

The proportion of factors currently used to calculate Notional SEN in Norfolk are as follows:

Norfolk's Notional SEN methodology was updated for 2025-26, in line with DfE recommendations.

Inflation to the Notional SEN budget over the years has not kept pace with the national average, with Norfolk's percentage (9.11%) still behind the 2025-26 average nationally of 12.1%.

National Picture: For reference

Information previously shared by the DfE showed that most LAs calculate their schools' Notional SEN budget using a combination of funding from the basic entitlement factor, the deprivation factors, and the low prior attainment factors in the local funding formula. There is currently no national approach to the calculation of schools' Notional SEN budget for pupils with SEND through the National Funding Formula, but the DfE have provided a recommended approach stating that stated that they expect the calculation of the Notional SEN budget to include[4]:

• A small part of the basic entitlement funding
• A larger part of deprivation funding, reflecting the higher prevalence of lower-level SEN amongst disadvantaged pupils, and
• The majority or whole of the low prior attainment factor funding, as this is the best proxy we currently have for pupils with low-cost, high incidence SEND

Other elements of the funding formula may also be used; for example, a proportion of the lump sum could reflect any fixed costs of making SEND provision that would apply to all local schools or diseconomies of scale relevant to small schools (Norfolk currently takes this approach as part of its Notional SEN methodology).

Norfolk's Notional SEN methodology aligns with the DfE's guidance and recommended approach.

Formula factors used to allocate Notional SEN nationally are as follows in 2025-26 (number of authorities shown using each):

Prior attainment is the factor most commonly contributing to Notional SEN with150 local authorities using it in their 2025-26 formulae.

The majority of local authorities are also assigning a percentage of their basic entitlement and deprivation funding into Notional SEN.

9.4. Potential impact of increasing the Notional SEN budget

If a school is committing the proportion of its budget to SEND provision that is indicated by its Notional SEN allocation, then an increase in the overall budget for Norfolk (and subsequent increase the individual school's notional allocation) is likely to mean that the school will need to shift the proportion of its spend to SEND from other provision.

This shift would move Norfolk's schools towards the national average, in line with DfE expectations, and statistical neighbours.  However, it is recognised that this could have an impact for some schools as spend may need to re-allocated from non-SEND related expenditure into SEND provision.

Adjusting the notional SEN allocation for a school also changes the expectations of the level of funding that schools would ordinarily utilise for SEND provision prior access to other funding (e.g. Element 3 top-up funding).  However, at a time when more and more children are having SEND identified, there is also a rationale for increasing the proportion of schools' spend to meet those needs, as well as bring Norfolk schools in line with expectations of neighbouring authorities and the national average. 

9.5. The impact of removal of the block transfer and proposed corresponding increase in Notional SEN budget

As detailed earlier in the consultation, it is currently proposed that Norfolk moves away from Schools Block to High Needs Block transfer from 2026-27.

Presuming that this happens, both the LA and Schools Forum have acknowledged that it is important that the funds currently being spent on SEND provision through the High Needs Block continues to be spent on SEND provision once 'reallocated' through the Schools Block.  Otherwise, as Norfolk, we will be reducing our provision and spend on SEND at a time when data indicates that needs are increasing, and Government are seeking greater levels of inclusion within mainstream schools.

A mechanism to deliver this expectation, is for the Notional SEN budget in Norfolk to be increased in line with the proportion of funding that will 'reverse' back into the Schools Block, c. 9.7m (1.43% of the 2025-26 Schools Block).  Due to the denominator in the calculation increasing with the additional funds, Notional SEN as a proportion of the Schools Block would only increase by 1.3%, leading to a Notional SEN budget to c. 10.41% (all else remaining equal).

The additional funding in the Schools Block would be distributed to schools via the local funding formula (based upon the NFF as detailed earlier in the consultation), enabling the values per factor to be increased nearer to the NFF values (i.e. schools would see gains in their base allocations).  As a reminder, this would mean that:

• Some schools see significant cash gains as their gains were limited by protections required
• Other schools who were subject to protections would no longer require them and may see small cash gains
• Other schools would not see any cash gains because protections were still in place (i.e. they were already receiving more cash than would be indicated via the factors and values alone)

As shared in section 8, illustrations of these changes are shown in columns D to I within the Notional SEN technical paper (v2) (Excel doc, 109 KB) utilising the 2025-26 allocations, factors, values and protections.  These show where schools would see cash increase and / or where cash would remain the same, but protection levels would reduce.  The Formulaic Element 3 allocations from September 2025 were calculated on the same basis, with the intention of supporting the move towards the removal of the block transfer.

However, the Notional SEN allocations increase (to reflect the additional funds in mainstream schools for SEND) would be differently distributed to the cash impact across schools' budgets.  This is because the Notional SEN formula is a sub-set of the overall funding formula, but without the MFG and MPPL protections built in.  Therefore, schools could see:

• Increases in funding allocations (cash increase) and a lower level of Notional SEN increase - this is due to increases having been previously limited due to the protections of other schools combined with the reduction in protections resulting in more than the £9.7m being redistributed
• Some increases in funding allocations (cash increase) but a higher level of Notional SEN increase - this is due to the school having had some protections in place that the increased funding will have mitigated the need for through the gains in the underlying factors and values, with the Notional SEN allocation recognising these increases in the underlying factors and values
• No increase in funding allocations (cash stable) but a higher level of Notional SEN increase - this is due to the school still having protections in place despite the increased funding having mitigated some of the need for them through the gains in the underlying factors and values, with the Notional SEN allocation still recognising these increases in the underlying factors and values

It may feel unfair to schools that do not see any cash increases (or smaller cash increases that Notional SEN) that they would be expected to spend more of their existing budgets on SEND.  However, this represents that those schools were already benefiting from additional funds over and above those that would be allocated by the underlying NFF factors and values. 

Illustrations of the impact using 2025-26 allocations, factors, values and protections are shown in columns N to P of the Notional SEN technical paper (v2) (Excel doc, 109 KB).

Link with Element 3 model

In Norfolk, we have recently moved to a new model for the allocation of Element 3 based upon provision identified by schools to meet the needs of the children (via Graduated Provision Maps), taking into account the school's Notional SEN allocation (i.e. the clear expectation that schools are using this level of resource for SEND provision), any Formulaic Element 3 funding identified for the school, and then topping up funding with Element 3 (i.e. to support the needs of those with high SEND regardless of whether they are identified at SEN Support or have an EHCP).  This has been termed 'cohort Element 3 funding'.  This new approach to Element 3 funding has evolved through our work with schools and is linked to the concept of Notional SEN funding within national DSG guidance and the SEND Code of Practice.

If the block transfer is removed, the key principles of this model will remain, except that there will be

• No need for Formulaic Element 3 - all funds within the Schools Block will be allocated to schools via the NFF factors and values, which will have mirrored the approach taken with the Formulaic E3 but for a full year effect
• An expectation that schools contribute the revised level of Notional SEN allocation to meeting the costs of their SEND provision - schools that see an increase in Notional SEN exceeding any additional cash, will need to consider how they adapt their overall school provision to achieve this contribution, taking into consideration that they will be benefiting from funding protections to support transition following changes in pupil-led characteristics.  Team Around the School meetings will provide regular opportunities for schools to discuss their SEND provision and to consider options ahead of any changes.

Alternative approach

The LA have considered whether it is possible to more closely align the distribution of additional Notional SEN allocations at a school level with the additional funding that would be received following the ending of a block transfer.  Despite considering multiple modelling options, it is not possible to match the values due to the mechanisms of the funding formulae. In principle, the application of protections within the schools funding formula that do not exist within the Notional SEN formula that prevent this option.

It could be possible to apply MFG technical adjustments to the funding formula to closely match the Notional SEN allocation distribution.  However, this would result in schools that would have been due to gain under the NFF factors and values seeing reduced gains, whilst some schools who are already in receipt of protection, continuing to see high levels of protection and, arguably, being double funded for the monies added in relation to Notional SEN along with the 'normal' protection funds.  This could take many years for these protections to 'flow out' of the formula and whilst this was the case, those schools due to receive gains would continue to have them dampened (as they have done to date). 

The LA is of the view that this is not a viable option to consult on given that it would introduce additional complications to Norfolk's funding formulae with impact for, potentially, years to come.  Additionally, it would require formal agreement of the DfE, who may not agree to the adjusting of MFG for these purposes.

9.6. Size of the Notional SEN allocation in Norfolk

As shared above, over the last two financial years, Norfolk has moved towards the national average incrementally, with an initial identification of a further 1% of formula funding as Notional SEN for 2024-25, and then an additional 1.5% in 2025-26. 

The LA had originally planned to identify an additional 2% of formula funding as Notional SEN in 2026-27 (noting that the steer the LA had received from the DfE was that they would expect Norfolk to progress to ensure that, as a 'Safety Valve' local authority, all possible steps were being taken to adopt national guidance).

However, the LA are aware that a lot has happened since this original direction of travel was indicated, including a more challenging financial climate for schools and a significant increase in the proportion for children in mainstream schools with identified SEND (and an increase in the proportion of children educated outside of mainstream schools).  Additionally, nationally, we await SEN reforms that may, or may not, have an impact upon both how SEND is funded and expectations of both schools and the LA.  However, locally, we are required to continue to plan within the current frameworks. 

Therefore, it is necessary to consider the size of Norfolk's overall Notional SEN allocation for 2026-27, with the information that we have currently.   

Presuming that the block transfer is 'reversed' from 2026-27, and the Notional SEN budget for Norfolk is increased by the previous block transfer amount (£9.7m, 1.43%) to reflect this 're-allocation' of funds in the Norfolk system, the Notional SEN budget for Norfolk would represent 10.41% of the overall Schools Block (including the block transfer element) at 2025-26 levels (only increased by 1.3% due to the increase of the denominator as previously discussed - the School Block funding available increasing from £667.687m to £677.387m).  

Therefore, to achieve the 2025-26 national average for Notional SEN, Norfolk would need to increase the Notional SEN budget by a further 1.69% to 12.1% (£81.964m based on the 2025-26 Schools Block without block transfer) - option 1.  At 2025-26 Schools Block levels, this is equivalent to an additional £11.438m in Norfolk purposed for SEND provision in mainstream schools. 

The alternative would be to achieve the national average for Notional SEN at the time that this direction of travel was set, which was 11.5% (£77.899m based on the 2025-26 Schools Block without block transfer) - an increase of 1.09% - option 2.  At 2025-26 Schools Block levels, this is equivalent to an additional £7.373m in Norfolk purposed for SEND provision in mainstream schools. 

The LA is of the view that it is important that the expectation of Norfolk schools in relation to the proportion of budgets that is spent on SEND provision continues to increase towards the national average and closer (or aligned) with our statistical neighbours.  Norfolk is likely to remain under pressure from the DfE to achieve to align with the national picture and statistical neighbours if the decision is taken to set a Notional SEN budget below the national average for 2026-27.  They may also expect to see that schools are using their core budgets for SEND provision at a level that they believe is reasonable to support the proposal to remove the block transfer from the 'Safety Valve' agreement. 

Therefore, the LA is also consulting on three options for identifying more of the local mainstream schools' formula funding as Notional SEN in 2026-27, working towards alignment with the national average:

• Option 1 = 1.69% (to aim for the 2025-26 national average in 2026-27)
• Option 2 = 1.09% (incremental, to aim for national average at the time Norfolk began to increase its % share, with a view to reaching the current national average in 2027-28)
• Option 3 = Do not support

9.7. Methodology for calculation of the Notional SEN allocation

Norfolk's Notional SEN methodology was reviewed for 2025-26, with an intention to move to a final methodology over time with the following approximate proportions of formula funding, as discussed with Schools Forum in December 2024, and in line with DfE recommendations:

• Basic Per-Pupil Entitlement 2%
• Deprivation (IDACI/FSM/FSM6) 40%
• Low Prior Attainment 98.80%
• Lump Sum 6%

The methodologies modelled for 2026-27 for each option are shown on rows 410-415 of the Notional SEN technical paper.

9.8. Summary

This section of the consultation covers both the impact of the proposal to remove the block transfer on Notional SEN along with the proposal to continue Norfolk's progression towards aligning the size of the Notional SEN budget with the national average and statistical neighbours.

The Notional SEN technical paper (v2) (Excel doc, 109 KB) provides an illustration of the 2025-26 Notional SEN percentage uplifted by the value of the 2025-26 block transfer of 1.43% (£9.7m) adding 1.3% to Notional SEN.

It then goes on to share the impact of the two options presented to increase the size of the Notional SEN budget to align with (or closer to) the national average:

• Option 1 - 1.69% of formula funding to aim to reach the 2025-26 national average of 12.1% in 2026-27, or
• Option 2 - 1.09% of formula funding to aim to reach the 2025-26 national average in 2027-28.

The higher the Notional SEN %, the more of the funding formula is identified as Notional SEN and expected to be used by schools to fund SEND provision, though this is within the context of increasing identification of SEND need across schools.

The exact amount to which individual schools' figures change through the options depends on the proportion of factors that those schools have within their budget share which is dependent on their pupil characteristics (the Notional SEN methodology).

[1] Latest version of DfE guidance: The notional SEN budget for mainstream schools: operational guidance 2025 to 2026 - GOV.UK

[2] The DfE provided national data on Notional SEN based on data from LA's 2023-24 formulae, with 75% of authorities allocating between 5% and 15% of their Schools Block funding as Notional SEN at that time.

[3] Schools block funding formulae 2025 to 2026: Analysis of local authorities' schools block funding formulae - GOV.UK

[4] Section 3, The notional SEN budget for mainstream schools: operational guidance 2025 to 2026 - GOV.UK

Executive summary

For the 2025-26 financial year, the allowable range for the Minimum Funding Guarantee (MFG) in mainstream schools was set between -0.5% to 0.0% per-pupil. The Local Authority (LA) used a 0.0% MFG, replicating the funding floor through the National Funding Formula (NFF) while protecting schools against losses during tight budget periods. However, for 2026-27, the LA is considering whether the continued use of the maximum MFG allowable by the Department for Education (DfE) remains the most appropriate option.

The cost of the MFG mechanism, to ensure affordability, is that schools who would otherwise gain (i.e. due to changes in pupil-led factors) received a reduced gain.  I.e. a lower level of MFG protection would mean that protected schools would receive less protection and need to adjust their spend accordingly, due to less 'smoothing', while schools without protection would see increases in their 'gains' in line with NFF factors and values.

The document highlights the differences in how the DfE's funding floor and the MFG protections work. The DfE funding floor does not protect MFG allocations included within a school's budget share from the previous year, whereas a 0% MFG replicates the DfE's funding floor for NFF and protects against losses of the per-pupil amount already within a school's budget share.

The amount of MFG within schools' budgets tends to reduce over time as the overall level of DSG Schools Block funding increases at a higher rate than the MFG percentage used. This reduction is also dependent on pupil demographics, which can affect individual schools' formula allocations.

The document provides technical illustrations of different MFG levels applied to the 2025-26 formula, with or without a block transfer, to show the potential impact on schools.

In summary, the document outlines the current and potential future methodologies for ensuring the affordability of the mainstream schools funding model, considering the impact of MFG and the transition towards a direct NFF.

10.1. What is Minimum Funding Guarantee and why is it important

Minimum Funding Guarantee (MFG) is a mechanism used to protect schools against significant changes in the overall level of funding received through the pupil-led factors of the funding formula, intended to support stability in schools' individual budgets, allowing adjustments to be made over time.

The level of protection set locally within limits set by the Department for Education (DfE).  For 2025-26, the allowable range for MFG in mainstream schools was -0.5% to 0.0% per-pupil, meaning that the funding formula could either allow schools to lose funding on a per-pupil basis compared to the previous year, or to protect them against losses.

The cost of the MFG mechanism, to ensure affordability, is that schools who would otherwise gain (i.e. due to changes in pupil-led factors) received a reduced gain, i.e. a lower level of MFG protection would mean that protected schools would receive less protection and need to adjust their spend accordingly, due to less 'smoothing', whilst schools without protection would see increases in their 'gains' in line with National Funding Formula (NFF) factors and values.

The DfE's MFG arrangements for 2026-27 will be announced in the autumn along with other school funding information.  For now, it can only be assumed that the allowable MFG range might be similar to 2025-26, being -0.5% to 0.0% per-pupil compared to the previous year's funding.  However, it could also be an amended range or a fixed percentage requirement (for example, the range for 2024-25 protection was 0% to 0.5%).

Additionally, as another form of protection, the DfE identify Minimum Per Pupil Levels (MPPLs) of funding.  These are set by the Government and have to be adhered to regardless of other local decisions made.  This consultation is not concerned with MPPLs, but schools should be aware that they are a protection that exists when considering MFG.

Visit the Norfolk Schools and Learning Providers website for further information about Minimum Funding Guarantee (MFG) and Minimum Per Pupils Levels (MPPL). Details of how the Minimum Funding Guarantee protection is applied are included in section 20 of the DfE's Schools operational guide: 2025 to 2026 - GOV.UK.

10.2. Norfolk context

In November 2023, Schools Forum voted to remove the previous hard cap on gains in the local funding formula for 2024-25, instead reducing the National Funding Formula factor values, within the DfE's allowable range, to enable allocations to schools to balance within the DSG funding envelope from DfE following a 1.45% Schools Block to High Needs Block transfer approved by the Secretary of State in line with Norfolk's Safety Valve agreement.

If a Schools Block to High Needs Block transfer does not take place, then a reduction to factor values may not be needed for 2026-27 (or the adjustment may be less).  This would enable Norfolk to mirror the National Funding Formula factor rates even more closely than it already does.

Each year, as well as reducing the National Funding Formula factor values, the Local Authority (LA) has included within consultations the maximum allowable Minimum Funding Guarantee (MFG) protection, creating stability, and protecting schools against per-pupil funding losses between years.

For 2025-26, the LA used 0.0% MFG (maximum protection allowable), which replicated the funding floor through the National Funding Formula, whilst also protecting schools against losses at a time when budgets are tight and remaining in line with previous agreements to replicate NFF methodologies are closely as possible.

10.3. Review of Norfolk's previous approach to maximising protection

Following discussion with Schools Forum, the LA has been asked to consider whether the continued use of the maximum Minimum Funding Guarantee allowable by DfE remains the most appropriate option within current contexts for 2026-27.

Whilst the DfE applies a funding floor, which prevents against reductions in the DfE's NFF per-pupil formula between years, and the DfE allows alignment of MFG on the same basis, there is a difference in how the two protections work.  The DfE funding floor itself does not protect Minimum Funding Guarantee allocations included within a school's budget share from the previous year, whereas the application of a 0% Minimum Funding Guarantee not only replicates the DfE's funding floor for NFF (mirroring NFF methodology) but also protects against losses of the per-pupil amount already within a school's budget share, including any Minimum Funding Guarantee embedded within it.

A future direct National Funding Formula might not include local flexibility/MFG arrangements.  If a direct NFF is implemented by DfE at some time in the future, the DfE may need to consider temporary transitional arrangements for schools that have MFG protection locally within their budget shares at that point, but there is currently no information on the approach that would be taken nationally in this scenario.

In the current year (2025-26), the Schools Block to High Needs Block funding transfer is a significant factor in the level of MFG.

• Norfolk currently has £3.088m of MFG in 2025-26 financial year, but this would have been reduced to £0.562m in the current year without the block transfer due to higher factor values then being possible.
• If there is no block transfer for 2026-27 (proposal indicated earlier in the consultation) and presuming that DfE's own National Funding Formula factor values increase (information awaited from the DfE regarding provisional changes as detailed elsewhere), then the level of MFG required in 2026-27 should reduce significantly even on the same basis of 0% MFG.
• If we reduce the Minimum Funding Guarantee (MFG) percentage, it allows some schools to receive less funding per pupil than before. This speeds up the process of aligning school budgets with the National Funding Formula (NFF), which means schools would be funded more directly based on the NFF's factor values.  However, the local funding formula would no longer mirror the Department for Education's (DfE) "funding floor" - a safeguard built into the NFF that protects schools from losing funding at NFF level due to changes in pupil numbers or characteristics from one year to the next.  

The amount of MFG within schools' budgets tends to reduce over time as the overall level of DSG Schools Block funding increases at a higher rate than the MFG % used.  Therefore, this reduces the MFG requirement on an overall per-pupil basis, although it is also dependent on pupil demographics, which can affect individual schools' formula allocations.

Local authorities can choose how much Minimum Funding Guarantee (MFG) protection to apply (within the DfE limits). Reducing this protection means some schools may see faster reductions in their budgets — which would need to be carefully managed.  At the same time, this would allow more funding to flow through the formula itself, meaning other schools could receive slightly higher allocations based on their factor values.

10.4. Modelling the impact

Without provisional DSG allocations or an APT (Authority Proforma Tool) modelling tool:

• It is not possible for the LA to provide reliable technical illustrations of what different options could mean in practice for individual schools in 2026-27 although it is expected that the overall cost of MFG required should be significantly less without a block transfer in place. 
• Instead, a technical paper is provided based on current funding arrangements in 2025-26, using 2024-25 MFG baselines as the comparison. 

The LA has provided a technical paper for the 2026-27 consultation (Excel doc, 107 KB) based on different levels of MFG applied to the 2025-26 formula, with or without a block transfer included, as an illustration of the potential options and impact.

10.5. Which schools would be impacted

MFG protection is due to changes in pupil characteristics between years, not due to one particular school type or another.  It is likely that some MFG amounts still in place relate to historic changes in the overall funding formula, e.g. Funding Reform, or National Funding Formula, that may have reduced over time but have not been reduced fully due to ongoing block transfers reducing the funding available to put through formula factor values (which would otherwise have reduced the amount of MFG protection needed more quickly).

There is no obvious pattern to the distribution of MFG amongst schools, other than by DfE-prescribed formulaic calculation which protects schools on a per-pupil basis compared to the previous year.  For example:

• 46% of secondary/all-through and 50% of primary schools had MFG in 2025-26, which is quite a similar proportion.
• The size of school also does not determine the level of MFG protection that a school currently has, for example, one school with 16 pupils has a similar MFG protection amount to another school that has 1,428 pupils, whilst there are schools between those sizes with considerably more or less MFG.

10.6. Illustration of the financial impact for Norfolk of protection at different levels

The technical paper shows that in 2025-26:

• 196 out of 400 schools (49%) received a Minimum Funding Guarantee protection of 0% costing a total of £3.088m, with individual schools' protection amounts ranging between £6 and £152,992. 
• At a lower -0.25% MFG protection, 145 schools (36%) would have received a total of £2.174m MFG with individual protections ranging between £79 and £122,356.
• At the minimum level of MFG protection, -0.5%, 120 schools (30%) would have received a total of £1.619m MFG with individual protections ranging from £133 to £115,383.
• The difference between the maximum 0% MFG protection and minimum of -0.5%, of £1.469m, represents approximately 0.2% of overall formula funding that would have been allocated across schools with formula gains if the lower MFG percentage had been used in 2025-26, but with 76 fewer schools then being protected against per-pupil losses.

As an alternative, the technical paper also demonstrates the impact using 2025-26 budgets but without the £9.7m Schools Block to High Needs Block transfer (as no block transfer is proposed for 2026-27).  In that scenario:

• 40 out of 400 schools (10%) would have received MFG protection at 0% MFG costing a total of £0.562m with individual protection amounts ranging between £90 and £89,070.
• At a lower -0.25% MFG protection, 32 schools (8%) would have received a total of £0.467m with individual protections ranging between £43 and £83,952.
• Based on the minimum level of MFG protection, -0.5%, 23 schools (6%) would have received a total of £0.404m with individual protections ranging between £644 and £78,937.

The table below is provided as a summary:

Executive summary

Norfolk is undergoing significant reform of its Alternative Provision (AP) system as part of the Local First Inclusion strategy, aligning with a national model that prioritises early support, time-limited placements, and the principle that AP should be a temporary intervention rather than a permanent solution for children. This transformation is underpinned by strong partnerships and collective responsibility among all stakeholders, aiming to use AP as an outcomes-based intervention to successfully reintegrate children into mainstream schools.

Substantial financial investment has been made to expand AP, particularly through primary and secondary Specialist Resource Bases (SRBs), pupil planning meetings, and enhanced outreach for pupils at risk of exclusion. However, a growing number of children are absent from school primarily due to physical or mental health needs. In response, the Local Authority (LA) is redesigning its "Medical Needs" service, involving schools and partners in developing new identification, assessment, and support approaches, especially as youth anxiety now accounts for most medical needs AP cases. A key aim is for the child's home school to remain central to their education and support, promoting a sense of belonging and responsibility to aid reintegration.

Currently, children absent due to medical needs and educated mainly through AP are funded via the High Needs Block, but their funding also remains with their home school, resulting in double funding. This differs from arrangements for other areas such as SRBs, or exclusions, and undermines the shared accountability for outcomes for these children. The rising demand for medical needs AP has significantly increased costs, leading the local authority to seek a fairer funding model where schools contribute to the cost of AP services they use.

Although technical solutions involving census changes were considered, complexities with Department for Education guidance led the authority to propose a more straightforward approach. The new proposal suggests schools make a pro-rata contribution to the cost of AP for medical needs, similar to existing SRB arrangements. This would be calculated based on the duration of AP used, ending when the child returns to school. If a pupil changes schools during AP, the original school would remain responsible for contributions for the rest of the financial year, and any additional high needs funding would be paused during the AP placement.

It is proposed that these arrangements would apply when the local authority arranges the majority (over 50%) of a child's education through medical needs AP. For hybrid arrangements where less than 50% is provided by the authority, no contribution would be required from the school. The plan does not prevent schools from making their own arrangements using their existing funding for children who are too unwell to attend, provided these are suitable and meet the child's needs.

11.1. Context

As part of Local First Inclusion, Norfolk is undergoing a radical transformation of its Alternative Provision (AP) system, reflecting the national three-tiered model of delivery: early support and outreach, time-limited and transitional placements and the central principle that Alternative Provision should be an intervention, not a destination, for children. Central to this strategy is the key tenet of strong partnership, collaboration and collective responsibility of all parts of the system which facilitates the best use of AP as a outcomes-based intervention for children and restores them successfully back into school.

Norfolk continues to invest heavily in the transformation of AP in both revenue and capital terms, through the introduction and expansion of Tier 2 time-limited placements through its primary and secondary Specialist Resource Base (SRB) programme, Local Pupil Planning meetings and enhanced outreach support for children at risk of exclusion. However, there is an equally important group of children whose "exclusion" from school is centred upon their physical or mental health needs, which act as their primary barrier to education.

As part of the overarching AP transformation strategy, a fundamental redesign of the local authority's "Medical Needs" service is also underway. A series of partnership workshops are planned for the autumn term to co-produce a new approach to the identification, assessment, support and alternative provision offer for children who are too unwell to attend school. These include key representatives from schools.  This redesign explicitly seeks to respond to the increasing social phenomenon of youth anxiety that now comprises most children in receipt of AP under Medical Needs.

Critical to this is ensuring that the system retains the child's home school as the central stakeholder in the AP Medical Needs offer and supports a continued sense of responsibility and belonging to, and for, children by their home school, with the ultimate aim of their successful reintegration.

11.2 Current arrangements

To date, children enrolled in schools who are absent due to medical needs and are receiving education either wholly or mainly through local authority (LA), arranged alternative provision under S19 Education Act, are funded by the High Needs Block.  However, they remain part of the school census, with their funding remaining in their school's budget.

Currently, even where children receive their full education provision through the medical needs AP offer, schools retain the full funding for the child, including pupil led factors. There is currently no contribution from schools to the cost of their alternative provision, meaning that the child's education is, in effect, being funded twice: once from the school's budget and, again, from the high needs block. This is contrary to other areas of spend, such as sessional Specialist Resource Bases or following a permanent exclusion. It also undermines one of the critical aims of the redesign of the Medical Needs AP offer by negating the collective, moral ownership of children between the LA and schools in ensuring the AP arranged for children is outcomes based and facilitates their return to school.

Additionally, the significant rise in demand for AP for children who cannot attend school due to illness / medical needs is resulting in further cost pressures to the High Needs Block for the provision itself, as well as to ensure the appropriate infrastructure inside the LA (Norfolk County Council) for coordination, oversight, procurement and commissioning. For context:

• Prior to the first COVID pandemic lockdown, the cost of medical needs alternative provision was £0.654m.
• The outturn in 2024-25 was £2.06m.

In addition to promoting collective responsibility for children, we also consider that a contribution towards the cost of AP for children under Medical Needs reflects a fairer approach to funding by locating contributions with those schools making use of the Medical Needs AP service.

11.3. Department for Education (DfE) guidance

As reflected in minutes from Norfolk's Schools Forum, the Local Authority initially identified that assigning children who receive LA arranged Medical Needs Alternative Provision to the annual AP census would provide the technical means to consider attribution of funding and was originally planned to be the basis of the consultation.

The is because the AP Census Guidance 2025 states:

"Some pupils may legitimately appear on the AP census and the school's census. For example, where their main source of education could be in an AP setting listed above, but they could also be registered at a maintained school or academy that has not arranged the AP.

"In this case, the local authority is taking responsibility for the pupil's education and to reflect this, the pupil will be recorded on the AP census. The pupil is, however, registered at the school and so to avoid double counting, such pupils should also be recorded at the mainstream school or PRU* (including AP academy or AP free school) as having a registration status of 'S' - current subsidiary (dual registration). The pupil will be funded through the dedicated schools grant by way of the high needs block and not the school census registration."

*PRU = Pupil Referral Unit

However, the LA has identified inconsistencies upon further research into the relevant associated DfE guidance relating to the School Census, pupil admissions register coding and use of the D (dual registered) code.  Therefore, the LA considers it would render this means of managing arrangements, and upon which to consult upon, too technically complex, confusing and possibly contradictory.  Accordingly, the LA has identified a simpler option to consult upon that is aligned with other contributions that schools make for other areas of spend.

Therefore, the LA is consulting upon the application of a contribution from schools to the cost of delivering alternative provision under its medical needs offer. This provides simplicity and also reflects the guidance set out in the DfE Statutory guidance: Arranging education for children who cannot attend school because of health needs which states.

"Alternative provision for children with medical needs is funded from local authorities' high needs budgets. However, where a child remains on the roll of their home school but requires a period of time in alternative provision due to their health needs, the local authority and home school may wish to consider the transfer of a portion of the school's funding associated with that child to the alternative provision. This would ensure that the funding follows the child. This arrangement would cease when the child is reintegrated back to their home school or are no longer on the roll of the home school."

11.4. Proposal

The LA proposes to apply a school's contribution to the cost of a child's Alternative Provision for medical needs, replicating that which is in place for sessional SRBs, namely:

• Basis of Contribution: The contribution would be a pro-rata amount of the Basic Per Pupil Element (BPPE) funding, applied for the duration of the time the pupil is in AP to the nearest term.
• Pro-Rata Calculation: The amount charged would be calculated proportionally based on the length of time alternative provision is in place. Contributions would end at the point the child reintegrated back to school and the AP was no longer required.
• Change of School: If the child's home school changes during a placement, the initial home school continues to be responsible for the contribution for the rest of the financial year.
• Element 3: As with any change of provision within a school, the school's Graduated Provision Map should be amended reflecting any reduction in provision whilst the child is placed in AP, and this may impact upon Element 3 funding in accordance with published Element 3 guidance.
• Hybrid arrangements: The LA proposes that such a charge would apply where the LA is arranging all or the majority of a child's education through its Medical Needs alternative provision offer. Recognising that a child with medical needs may also have hybrid arrangements (i.e. be attending school for part of their education when they are able and receiving medical needs provision for part of the week), the LA proposes that a charge would apply where the LA is arranging more than 50% of the child's overall education. Where the LA is arranging AP for less than 50% of a child's overall education provision, a contribution from the school will not be applied.

Finally, the LA recognises that schools also make their own arrangements for children who are too ill to attend school and the LA does not need to make arrangements under its Section 19 duties where such arrangements are suitable for children.  This proposal is not intended to prevent schools from making their own arrangements directly for children on their roll, utilising the pupil's core funding, pupil led factors and SEND funding.

 
This concludes the consultation for all academies; the following pages apply to maintained schools only.

Maintained Schools Consultation Only

This section provides summary information relating to the maintained schools only elements of the consultation, with further information provided in appendices as indicated.

Executive summary

Local authorities must publish Schemes for Financing Schools, outlining the financial relationship between themselves and the maintained schools in their area. These schemes are governed by statutory guidance under the School Standards and Framework Act 1998, which details mandatory, recommended, and optional inclusions. Updates to the local scheme may occur via directed revisions from the Secretary of State, which must be adopted verbatim, or through local revisions, which require consultation with all maintained schools and approval from relevant Schools Forum members.

The current proposed changes are best described as minor technical updates that should not affect the daily management of school budgets. To ensure transparency and compliance, Norfolk County Council is consulting maintained schools to clarify aspects of the scheme and align it with current national guidance. Any agreed changes will be formally adopted following a review by the maintained Members of Schools Forum, and the updated scheme will be published on the Norfolk Schools website.

The specific proposals under consultation include:

• Clarification of lease arrangements in section 2.8 of Annex J, particularly regarding *IFRS16 leases
• Amendments to section 4.2 allowing the return of non-BMP funds to schools rejoining the Building Maintenance Partnership [BMP], and
• Revisions to Annex K to reflect updated national guidance on responsibilities for redundancy and early retirement costs

*IFRS = International Financial Reporting Standards

12.1. Background

Local authorities are required to publish Schemes for Financing Schools setting out the financial relationship between them and the schools they maintain.

Guidance is provided to authorities listing the items that must, should or may be included, and is issued under the School Standards and Framework Act 1998.

The local scheme is updated in the following circumstances:

• Directed revisions - the Secretary of State may require the revision of part or any scheme. These revisions must be included in the local scheme using the text of the directed revisions
• Local revisions - for changes other than directed revisions, local authorities must consult with all maintained schools in their area and receive approval of Schools Forum members representing maintained schools

The proposed changes within this consultation are minor technical updates that are not expected to impact on the day to day running of schools' budgets.

For reference purposes, the current scheme is available on the Norfolk Schools website.

12.2. Consultation requirements

The Government's statutory guidance Schemes for financing schools - GOV.UK states that, other than for directed revisions, local authorities must consult all maintained schools in their area and receive approval of the Members of their Schools Forum who represent maintained schools.

Therefore, the Local Authority (LA) is consulting with Norfolk's maintained schools on proposed changes as part of the wider autumn Designated School Grant (DSG) consultation with all schools.  This is to enable the LA to provide additional clarification within the scheme or to bring the local scheme into line where wording differs from current national guidance.

The outcomes of this consultation will be reported back for the maintained Members of Schools Forum to agree (or otherwise) and any revisions agreed will then be updated in Norfolk's Scheme for Financing Schools.  An updated version of the document will then be uploaded onto the Norfolk Schools Website.

12.3. Proposed changes

In July 2025 and September 2025, Schools Forum considered the LA's proposal to consult upon changes to the scheme during the DSG Autumn consultation. This included consulting upon the following sections.

Leases - (Local updates) 

The local authority proposes to add further clarification to the wording in section 2.8 of Annex J of the local scheme in respect of leases, further to the changes already made to the scheme in 2024-25, in respect of Norfolk's requirements for IFRS16 leases.

Building Maintenance Fund - (Local updates)

The local authority proposes a change to the scheme in section 4.2 of the local scheme in respect of allowing non-BMP funds to be returned to a school if they opt back into the Building Maintenance Partnership (BMP) fund.

Annex K - Responsibility for redundancy and early retirement costs - (Local updates)

The local authority proposes to update Annex K of the local scheme, based on revised/current wording of the guidance note for responsibilities relating to redundancy and early retirement costs in national guidance.

Please review Appendix A for further information regarding the proposed changes to wording that are being consulted upon, before answering the following questions.

Leases - (Local updates)

Section 2.8 of Annex J

Current wording (wording to be removed in bold)

"Subject to government legislation on capital expenditure control, schools will have freedom to redeploy expenditure from their delegated budget into capital items. Schools must not enter into finance leases. Schools must not enter into operating leases without the approval of the Children's Services Assistant Director - (Business and Compliance)."

*IFRS = International Financial Reporting Standards

Building Maintenance Fund - (Local updates)

Section 4.2e

Current wording

• "For mainstream schools that do not contract into BMPP* the total amount lodged should be up to a maximum of £650 per pupil on roll at the time of the previous October Census, or £360,000, whichever is the lower.
• For special schools that do not contract into BMPP the total amount lodged can be up to a maximum of £815 per place at the time of the previous October Census.
• Schools with community assets that are required to have a sinking fund for regular repair and maintenance of those assets e.g. swimming pools, Multi-Use Games Areas (MUGAs) etc, may also lodge funds in Schools Building Maintenance Holding Account.
• Once lodged, funds cannot be returned to the school. The funds can only be used to fund building maintenance expenditure."

*BMPP = Building Maintenance Partnership Pool

Annex K - Responsibility for Redundancy and Early Retirement Costs - (Local Updates)

Extract 1 from Annex K, within section 6

Current wording

"Charge of premature retirement costs to local authority non-schools budget:

• Where a school has a long-term reduction in pupil numbers and charging such costs to their budget would impact on standards
• Where a school is closing, does not have sufficient balances to cover the costs and where the central Schools Budget does not have capacity to absorb the deficit
• Where charging such costs to the school's budget would prevent the school from complying with a requirement to recover a licensed deficit within the agreed timescale
• Where a school is in special measures, does not have excess balances and employment of the relevant staff is being/has been terminated as a result of local authority or government intervention to improve standards"

Extract 2 from Annex K, within section 6

Current wording (wording to remove in bold)

"Costs of new early retirements or redundancies can also be charged to the central part of the Schools Budget if the Schools Forum agree and the local authority can demonstrate that the "revenue savings achieved by any termination of employment are equal to or greater than the costs incurred". The Schools Forum must agree to any increase in this budget over the previous financial year. If the Schools Forum does not agree with the local authority's proposal, then the authority can appeal to the Secretary of State. The Schools Forum would also be involved if the additional expenditure resulted in a breach of the central expenditure limit, whereby central expenditure increases faster than the Schools Budget as a whole."

Extract 3 from Annex K, within section 6

Current wording (removal whole of this section)

"An example of where a charge to the central Schools Budget might be appropriate would be a school reorganisation. A reorganisation involving the closure of a number of schools would be likely to result in savings because there would be a reduced amount being allocated through the formula for factors such as flat rate amounts to all schools or floor area. If the savings in the formula exceeded the ongoing costs of the VER/redundancy then this would qualify.

It would be possible to consider savings at an individual school level as well, but this needs to be carefully managed so that there are clear ground rules in place for applications, recommendations and approval. It may be sensible to agree criteria for eligibility which are consistent with the general approach as to when costs should be centrally funded."

Extract 4 from Annex K, within section 6

Current wording (remove whole of this section)

"There are clearly difficulties in setting a budget, whether inside or outside the Schools Budget, at a point prior to the beginning of the financial year before schools have set their budgets and made staffing decisions. Local authorities can only make a best estimate of what may be needed, based on past experience, local knowledge of the financial position of individual schools and the context of that year's funding settlement. There are dangers in raising expectations that costs will be met centrally if the budget is set too high, and so an alternative would be to keep the budget tight and use contingency or schools in financial difficulties budgets if there is an unexpected need for staffing reductions and it is not appropriate for delegated budgets to fund VER/redundancy costs. To achieve best use of resources, local authorities should also have an active redeployment policy, to match staff at risk to vacancies."

Extract 5 from Annex K, within section 6

Current wording (remove all wording)

"One of the permitted uses of the contingency is where "a governing body has incurred expenditure which it would be unreasonable to expect them to meet from the school's budget share" while local authorities are also allowed to retain funding for schools in financial difficulties "provided that the authority consult the schools forum on their arrangements for the implementation of such support."

Extract 6 from Annex K, within section 6

Current wording (words to be changed shown in bold)

"(9) Where a person is employed partly for community purposes and partly for other purposes, any payment or costs in respect of that person is to be apportioned between the two purposes; and the preceding provisions of this section shall apply separately to each part of the payment or costs."