Dedicated Schools Grant consultation: Mainstream schools document 2025

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