The Dedicated Schools Grant

Why does this matter for you as a headteacher?

Understanding

• Budget Planning: Your core funding is predictable if you understand the factors.
• Pupil Data Accuracy: October census data drives your funding—check it carefully.
• Strategic Decisions: Changes in deprivation or prior attainment profiles can affect your budget.
• Protections: If your school has historically high funding, protections like MFG will cushion changes, whilst MPPL will ensure that all pupils attract a minimum level of funding.
• Consultation and engagement opportunities: You can influence aspects of the local funding formulae, which will impact the funding received by your school, and the provision in place in Norfolk.
• SEND funding:Understanding SEND funding (including Notional SEN) will support you to understand how your provision is funded and support your decision making
• Other grants:Your school will receive otherGovernment grant funding for specific purposes that require decision making about effective use and will often require specific reporting

What Is the Dedicated Schools Grant?

The Dedicated Schools Grant (DSG) is the main source of government funding for schools in England. It's allocated annually by the Department for Education (DfE) to local authorities, who then distribute the majority to education settings based on locally agreed funding formulas.

The DSG is ring-fenced, meaning it must be used for education-related purposes. It's designed to support the majority of school provision—from early years to year 11—and includes funding for pupils with special educational needs and disabilities (SEND), including post 16.  (Post 16 provision is primarily funded through the 16 to 19 funding formula administered by the DfE.)

Schools also receive other funding streams distributed directly by the Department for Education (DfE), such as pupil premium, PE and Sport Premium, Universal Infant Free School Meals, and Teachers' Pay and Pension grants.  Schools may also generate income through other routes, such as hiring of premises.

How Is the DSG Composed?

The DSG is split into four distinct blocks, each serving a different purpose:

The DSG is allocated to local authorities via National Funding Formulae for each Block, with local authorities required to agree local formulae to distribute funding based upon a set of national requirements and expectations.  This follows consultation with all schools and early years providers and Norfolk's Schools Forum.

What Should Headteachers Know?

As a headteacher, you'll want to be aware of:

• Core schools funding: The constituent elements (factors and values) used to distribute the Schools Block funding and your census data.
• Notional SEN funding (Element 2): The proportion of your core schools funding (from the Schools Block of the DSG) that is an indicative amount to utilise for whole school (ordinarily available) and targeted SEND provision. 
• Element 3 Funding: This additional top-up funding from the High Needs block allocated by the local authority to mainstream schools for high needs SEND provision in excess of provision funded by Schools Block monies. 
• Minimum Funding Guarantee (MFG): This mechanism protects schools against significant changes in the overall level of funding received through the pupil-led factors of the funding formula, with the level of protection set locally (within limits).  
• Minimum Per Pupil Levels (MPPL): This is a guaranteed minimum amount of funding for every pupil within a school set by Government per year group. 
• Impact of Transfers: Local authorities may apply to transfer funds between blocks in certain circumstances (e.g. from Schools to High Needs to meet rising SEND demand).  The Schools Forum can decide lower levels of block transfer, with the Secretary of State deciding higher levels.
• Additional grants: The additional grants that your school will receive, such as pupil premium, PE and Sports Premium and Universal Infant Free Schools Meals, and how these should be used and reported requirements.
• Early Years Funding: The per pupil funding distributed for early years provision in relation to parental entitlements claimed for children aged 9 months to 4 years.  Hourly rates for different age ranges with additional rates in relation to deprivation, additional needs and disability access. 
• Consultation Opportunities: Through local consultations and engagement opportunities, you can influence aspects of the local funding formulae, which will impact the funding received by your school, and the provision in place in Norfolk (especially around SEND and AP).  Link to further information about consultation and engagement opportunities .

Difference between locally maintained schools and academy funding mainstream schools

The key differences between locally maintained schools and academies in England lie in their funding arrangements, governance, and operational freedoms.

Locally maintained schools:

• Funding Source: Funded by the local authority (i.e. Norfolk County Council).
• Financial Year: April to March (aligned with the local authority financial year)
• Governance: Managed by the local authority, which:
  • Employs staff.
  • Usually owns the land and buildings.
  • Sets admissions policies.
• Curriculum: Must follow the national curriculum.
• Types: Includes community schools, foundation schools, voluntary aided/controlled schools.
• Conversion: Locally maintained schools may convert to academy status on a voluntary basis, via decision by the governing body, or may be required to convert by the Secretary of State for Education if rated "inadequate" by Ofsted.

Academies:

• Funding Source: Funded directly by central government via the Department for Education (DfE)(formally Education and Skills Funding Agency (ESFA)), utilising the local funding formula agreed by the local authority (i.e. Norfolk County Council).
• Financial Year: September to August (aligned with the academic financial year)
• Governance: Run by an academy trust, which:
  • Is a not-for-profit company.
  • Employs staff.
  • Usually owns or leases the land and buildings.
  • Has trustees responsible for performance.
• Curriculum: Do not have to follow the national curriculum (though many still do); curriculum requirements will be set by the academy trust.
• Operational Freedom:
  • Can set their own term dates.
  • Have more flexibility in staffing and budgeting.
• Re-brokering: An academy can be re-brokered—meaning transferred from one academy trust to another—under several circumstances. This process is overseen by the Regional Director (RD) acting on behalf of the Secretary of State for Education,can be voluntary or compelled, and common reasons can be due to underperformance, governance breakdown, geographical challenges, financial mismanagement or trust restructuring.

Local Context in Norfolk

In Norfolk, the DSG is managed by Norfolk County Council's Children's Services (the local authority) and shaped through engagement with leaders like yourself.  

Some opportunities are more formal, such has the annual DSG consultation on mainstream schools funding and the early year funding formulae, or part of partnership working (the Local Inclusion Partnership, the CEO Forum and the LA maintained heads meeting), whilst others are more informal (such as the Local First Inclusion (LFI) reference group.

The annual DSG consultations in recent years have focused on:

• Engagement on enabling higher levels of inclusion within mainstream schools
• Expanding special school outreach services
• Reviewing the Notional SEN Allocation methodology
• Considerations relevant to Element 3 funding
• Potential Schools Block to High Needs Block transfer
• Changes to the Scheme for Financing Schools and funding de-delegations (LA maintained schools only)

Leaders in Norfolk have previously contributed to these discussions and this has been invaluable to shape our understanding as a system and influence decisions about both funding distribution and provision in place.

The National Funding Formula:

What is the National Funding Formula?

The NFF is the method the Department for Education (DfE) uses to allocate core funding to mainstream schools in England. Its aim is to make funding fairer and more consistent by using a single national formula rather than relying on historic local decisions.

For 2025-26, the NFF is still technically "soft" (money goes to local authorities first), but local formulas must closely mirror the national model. The government has been moving towards a fully "direct" formula for many years, but no firm deadline has been given. 

In Norfolk, we have 'mirrored' the NFF for many years, with factors and values being adjusted within allowable ranges to ensure affordability of the model (previously managed through a system of capping growth).

How is it calculated?

The 'NFF recipe' has a number of ingredients (factors). Each factor has a monetary value set nationally, and all of Norfolk's mainstream schools' data determines how much funding is allocated to Norfolk each year.

The local formula in Norfolk for 2024-25 is based upon the NFF factors with values slightly amended from the national values to ensure affordability.  Your school's data determines how much you get from each within that local formula. 

There are protections in place for all schools through Minimum Funding Guarantee and Minimum Per Pupil Levels.

The elements that build your school's funding are:

1. Basic Per-Pupil Funding

   • Every pupil attracts a core amount.
   • Different rates for primary, Key Stage 3, and Key Stage 4 pupils.
   • This is the largest part of your budget.

2. Additional Needs Factors

   These recognise that some pupils need more support:

   • Deprivation: Based on free school meals (FSMs) and IDACI (Income Deprivation Affecting Children Index) based upon postcodes.
   • Low Prior Attainment (LPA): Pupils who did not meet expected standards at earlier stages.
   • English as an Additional Language (EAL).
   • Mobility: For schools with high pupil turnover.

3. School-Led Factors

   • Lump Sum: A fixed amount for every school to cover fixed costs.
   • Sparsity: Extra for small, remote schools.
   • Premises: Rates, Public Finance Initiative (PFI) costs, split sites, and exceptional premises

4. Area Cost Adjustment

   • Applies in higher-cost areas (e.g., London fringe).

5. Protective Elements

   • Minimum Per-Pupil Funding Level (MPPL): Guarantees a minimum amount per pupil.
   • Minimum Funding Guarantee (MFG): Caps losses and limits gains year-on-year.

6. Rolling in Grants

   • Periodically, the Government rolls previous grants (such Teachers' Pay Additional Grant and Pension Grant) are rolled into the NFF.

Quick Glossary

• Basic entitlement:Core amount per pupil (highest in KS4 with KS3 higher than primary).
• Additional needs: Uplifts for deprivation, low prior attainment, EAL, mobility.
• School‑led:A lump sum to cover fixed costs; sparsity for small/remote schools; premises (rates/PFI/split sites/exceptional premises) if applicable.
• MPPL: Minimum Per‑Pupil Level — ensures a floor per pupil; if your calculated figure is lower, your school is topped up.
• MFG: Minimum Funding Guarantee — caps year‑on‑year losses but potentially limits gains to ensure affordability.
• Area Cost Adjustment:Extra funding where wage costs are higher (not relevant in Norfolk).

What to watch for in practice

• October census accuracy (rolls and characteristics) is critical — it drives most factors.
• Protections interplay: MPPL and MFG can limit gains or top up shortfalls.
• Grant roll‑ins: Teacher pay/pension elements are now within the NFF from 2025-26, changing comparisons with prior years.
• Local delivery: Norfolk's local formula mirrors the NFF within allowed tolerances, so your actual allocation closely reflects the national model.

Early Years Funding Formula:

Early years funding is paid to early years settings (including childminders, PVI (private, voluntary and independent) settings, nursery classes within schools, and maintained nursery schools) on the basis of claims relating to parental entitlements. 

From September 2025, the government offers:

• 15 hours per week for:
  • Families of 2-year-olds who are receiving additional support (formerly known as the 2-year-old disadvantaged entitlement)
  • Universal entitlement for all 3- and 4-year-olds
• 30 hours per week for:
  • Eligible working parents of children aged 9 months to 4 years(including the universal 15 hours for all 3- and 4-year-olds)

These hours are usually spread over 38 weeks (term time), but some settings offer "stretched" funding across the whole year.

The Government sets hourly rates used to provide funding to each local authority, and each local authority then sets a local formula to pass on this funding to providers where there are eligible claims

The local formula in Norfolk currently has

• A base rate per hour for different age groups
• A deprivation supplement for children living in the 0-20% most deprived parts of the county using the IDACI index
• A SEN Inclusion Fund hourly top-up rate for eligible children
• An additional hourly top-up rate for eligible children with the most complex needs

Additionally, funding is provided at nationally set rates where eligibility criteria is met:

• Early Years Pupil Premium per universal hour
• Disability Access Fund per child (a lump sum)

 The local formula is set each year by the local authority following national DfE announcements and utilising local consultation.  The views of providers and settings in previous consultations in Norfolk have resulted a decision to stop utilising discretionary supplements to ensure that the hourly base rate is maximised for all. 

Providers submit periodic census information (timelines set by Government) - used to calculate the funding to the local authority - and then claim actual hours attended from the local authority (Norfolk County Council). 

What Is the Notional SEN Budget?

The Notional SEN budget is a portion of your school's core funding—allocated through the Schools Block of the Dedicated Schools Grant (DSG)—intended to inform a school's spending decisions in relation to meeting the costs of supporting pupils with special educational needs and disabilities (SEND).   

It's called "notional" because it's not a separate pot of money, but rather a guiding figure to help schools plan and prioritise spending on SEND provision.

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.  In Norfolk, we utilise it to indicate that funding that schools would ordinarily provide to meet needs before access to other funding (e.g. Element 3 top-up funding).  This is for both children who are SEN Support and those with an Education, Health and Care Plan, and includes the contribution of the first £6,000 of provision for those with high needs. 

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 (Element 3) 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.

In Norfolk, we allocate Element 3 funding based upon the SEND provision within the school in place (universal, targeted and enhanced) to meet the needs of individual pupils (those who are SEN Support and who have an EHCP) considering the use of SEN support funding. 

All schools are expected to make reasonable adjustments for pupils with disabilities, in accordance with their duties under the Equality Act 2010, whether or not they have SEN. Where a reasonable adjustment is special educational provision, the revenue cost of that adjustment may be met from the school's SEN budget.

Schools have a duty to designate a teacher to be the SEN co-ordinator (SENCO). We would expect the SENCO to be aware of their school's notional SEN budget and to be actively engaged with the senior leadership of the school in deciding what to spend on SEN support and provision.

How Is It Calculated?

The Department for Education (DfE) recommends that the Notional SEN budget be calculated using a mix of formula factors that act as proxies for SEN need:

In Norfolk, for 2025-26

• the Notional SEN budget 26 is c. £61 million, representing 9.11% of the Schools Block
• the methodology was amended to more closely align it with the DfE recommended approach (moving away from the historical methodology that had been in place for many years), utilising the following proportions of NFF

What Does It Cover?

As a headteacher, you're expected to use your Notional SEN budget to:

• Fund Ordinarily Available Provision (universal support accessible to all pupils)
• Deliver Targeted Provision (e.g. small group interventions, additional adult support)
• Contribute to Enhanced Provision for pupils with higher needs, up to the £6,000 threshold

This includes:

• Differentiated teaching
• Learning support assistants
• Speech and language interventions
• Behaviour support programmes

Example: A Year 4 pupil with dyslexia may receive small group phonics support and access to assistive technology. These costs—staff time, resources—should be met from your Notional SEN budget.

What It Doesn't Cover

It's important to note:

• The budget is not meant to provide £6,000 per pupil—most pupils' support costs less
• It's not a fixed entitlement per pupil—schools must use their judgement and best endeavours
• Costs exceeding £6,000 for agreed provision—schools can discuss Element 3 top-up funding with the local authority—in Norfolk we discuss overall SEND provision through Team Around the School discussions, with subsequent opportunity to amend Element 3 funding if required

Local Adjustments & Challenges

In Norfolk:

• Historically, the level of Notional SEN budget was very low compared to national averages and statistical neighbours, and (following consultation) it was agreed with Norfolk's Schools Forum to increase the budget over a number of years to align expectations
• The Notional SEN budget has been increased by 1.5% for 2025/26
• A new formula has been adopted for 2025/26 to align with DfE guidance
• Schools are expected to review their Graduated Provision Maps (GPMs) to ensure provision is effective and efficient meets needs for their cohort, showing how their Notional SEN funding is utilised

Example: If your GPM shows a significant gap between SEN needs and budget, you may need to adjust non-SEND provision or seek support from the SEND advisory team.

Minimum Funding Guarantee and Minimum Per Pupil Levels

MFG including DfE worked example

Minimum Funding Guarantee (MFG) is a mandatory part of the funding formula which protects schools against significant changes in the overall level of funding received through the pupil-led factors of the funding formula.  In 2025-26, LAs have been able to set the level of MFG between minus 0.5% and 0%.  It was agreed that Norfolk should use the maximum MFG value of 0%, presuming it was affordable within the DfE's Authority Proforma Tool, for the local funding formula for 2025-26.  This was to prevent per-pupil reductions for schools (and in line with special schools' 2025-26 MFG which has been set at 0% by the DfE).

A calculation of MFG is required for each individual school comparing per-pupil funding in the current financial year (2024-25) and in the new year being calculated (2025-26) through the funding formula.

Excluding the school-led factors of lump sum, sparsity, rates, split sites, PFI, and amalgamation protection, if applicable, the remaining funding allocated to a school based on pupil-led factors cannot reduce at all on a per-pupil basis when the MFG is set at 0% (if the MFG had been set at minus 0.5%, then factors could not reduce by more than minus 0.5% on a per-pupil basis).  Where required, MFG funding to ensure this minimum level is met is added as a separate line into a school's budget share.

It is important to understand that whilst the level of funding per-pupil is protected to an extent via the MFG, a school's funding can reduce in total where the number of pupils has reduced between years.  Also, the MFG provides either for a maximum per-pupil reduction (if set as a minus %), or no per-pupil reduction when set at 0%, but there is no limit to the amount that a school can gain unless a funding cap is also applied.

A funding cap is one option available within the local formula if the overall formula being used is not affordable within the total DSG allocation received once all funding factors have been calculated for schools and all protections have been applied.  An alternative option is to adjust the local factor values in the funding formula to ensure affordability without the need for a gains cap.  This was the approach agreed with Schools Forum for Norfolk for 2025-26 (and previously in 2024-25).

All MFG and cap calculations (where applicable) are calculated and validated through the DfE's Authority Proforma Tool prior to submission of schools' budgets to the DfE.

A worked example from the DfE below shows how MFG is calculated (based on MFG of 0%):

MPPL

Minimum Per Pupil Levels (MPPL) guarantee a minimum amount of funding for every pupil within a school.  The funding received through the MPPL varies from school to school depending on the year groups they have. In 2025-26, MPPL values have remained compulsory in local authority funding formulae.

The DfE's compulsory Minimum Per-Pupil Funding Levels (MPPL) for 2025/26 were set at £4,955 per pupil for primary schools and £6,465 per pupil for secondary schools.  These values increased compared to previous years, including reflecting the average per pupil amount of funding that schools attracted through preceding grants now rolled into the NFF for 2025-26 (Teachers' Pay Additional Grant, Teachers' Pension Employer Contribution Grant and Core Schools Budget Grant).

It is possible for a school to have protections relating to both MPPL and MFG within their final budget share.  MPPL protections are applied initially based on total funding from the NFF factors excluding premises factors of split sites, Rates, PFI, exceptional premises factors, compared to the minimum funding needed for pupil numbers multiplied by the relevant MPPL rate.  Any shortfall against the Minimum Per-Pupil Level is added to the formula funding.  The MFG calculation is then applied to the final formula funding budget including any MPPL protections, as shown in the MFG example above.