Agenda Item 4

Report to:	East Sussex Schools Forum
Date of meeting:	16 January 2026
Report By:	Carolyn Fair
Title:	DSG Budget 2026/27
Purpose:	To provide an update on the DSG budget for 2026/27

RECOMMENDATIONS

1) Schools Forum are asked to note the DSG allocations for the Schools, Central School Services, High Needs and Early Years Blocks

1 Background

1.1 The Dedicated Schools Grant (DSG) for 2026/27 is, like last year, allocated by the DfE into four blocks. Each block is subject to separate regulations as to eligible expenditure and the use of the four blocks is outlined below:

• The Schools Block comprises the funding which must be delegated to schools and academies through the Funding Formula. Maintained schools can agree to de-delegate budgets and these are spent on their behalf by the local authority. Subject to Schools Forum approval, there are a limited number of exceptions, the Growth Fund and Falling Rolls Fund, which enable local authorities to hold this funding centrally. The funding for these funds goes to eligible schools and academies.

· The Central School Services Block (CSSB) is a block of funding that provides funding for Local Authorities to carry out central functions on behalf of pupils in maintained schools and academies. LAs’ CSSB is split into funding for historic commitments and funding for ongoing responsibilities.

• The High Needs Block provides funding to support the provision for children and young people with special educational needs and disabilities (SEND) from their early years to age 25. This includes provision in maintained schools, academies, alternative provision, FE colleges and independent providers, as well as supporting central spending on pupils with special educational needs and disabilities from their early years to age 25.

• The Early Years Block funds payments to early years providers in settings and schools and supports central spending on early years pupils.

2. Appendices

 2.1      The appendices below provide a breakdown of the DSG allocations:

Appendix A - DSG Summary

Appendix B - Schools Block DSG

Appendix C – Central School Services Block DSG

Appendix D - High Needs Block DSG

Appendix E – Early Years Block DSG

3. Schools Block Funding

3.1       The Schools Block for 2026/27 is based on the October 2025 pupil census data and equates to £404.6m.

3.2       The DfE have allocated £12.0m more to the Schools Block compared to 2025/26. The reasons for this are:

1 £10.4m relates to previously separate mainstream grants now being added into the Schools Block. These are the ‘Schools Budget Support Grant’ (SBSG), and the ‘National Insurance Contributions Grant’ (NICs). 

2 Additional funding of £6.9m, due to an increase in the National Funding Formula rates, offset by a reduction in overall Numbers on Roll (NOR) resulting in £5.3m less funding. (Overall net increase of £1.6m).

4. Central School Services Block (CSSB) Funding

4.1       The DfE have confirmed that £4.3m has been allocated to the local authority. (£1.3m to Historic Commitments and £3.0m to on-going responsibilities) 

4.2       See Agenda Item 6 for more information on this block of funding and the LA’s proposed use for this funding. 

5. High Needs Block (HNB)

5.1       Normally, the DfE calculate the LA’s High Needs Block using a National Funding Formula (NFF). However, for 2026/27, the DfE have temporarily suspended using the NFF to calculate the funding. Instead, the 2026/27 allocation has been based on the 2025/26 allocations with some adjustments.

5.2 The DfE intend to review the methodology, for allocating high needs funding, to support the SEND reforms due to be set out in early 2026. The suspension means that the allocations will not include an update to the basic entitlement funding for pupil numbers in special schools.

5.3 For 2026/27, the DfE have allocated £99.9m which is an increase of £6.0m compared to the DfE’s allocation for 2025/26. The £6.0m increase is due to the inclusion of the Core Schools Budget Grant (CSBG) that was previously paid out to Special Schools/ Academies.

5.4 This means that, on a like for like basis, there has been no increase to the DfE’s High Needs DSG funding allocation compared to 2025/26.

5.5 The DfE have stated that Special Schools/ academies and Alternative Providers will continue to receive place funding at £10,000 per agreed place. They will also continue to receive the additional 3.4% place funding uplift that was introduced in 2023/24.

5.6       Special Schools / Academies will also continue to receive funding for the historic teachers’ pay and pensions grants (introduced from 2021/22) and the previously separate CSBG funding.   

5.7       For specialist facilities, attached to mainstream schools, as per DfE regulations the place funding will continue to be £6,000 for every occupied place and £10,000 for an unoccupied place. (Funding for occupied places is £6,000 per place because these pupils are also funded via the school’s budget share.)

5.8       Specialist Facilities are also to receive the additional funding equivalent to the funding allocated to mainstream schools for the elements of the 2025 to 2026 National Insurance Contributions (NICs) Grant and Schools Budget Support Grant (SBSG) paid in respect of special units and resourced (£539 Per Place).

6     Early Years Block

6.1       Appendix E is a summary of the funding allocations, for 2026/27. However, more detailed explanations are provided in Agenda Item 7.

Carolyn Fair

Director Childrens Services

Contact Officer: Ed Beale
Tel. No. 01273 337984

Email: Edward.beale@eastsussex.gov.uk

Appendix A

DSG Summary 2026/27	Schools	Central School Services	High Needs	Early Years	Total
Total DSG including Academies	£404,561,200	£4,290,600	£99,901,800	£0	£508,753,600
3 Year Olds / 4 Year Olds Funding Entitlement	£0	£0	£0	£31,005,900	£31,005,900
2 Year Old / Under 2's  Funding Entitlement	£0	£0	£0	£47,372,200	£47,372,200
Total Funding Available	£404,561,200	£4,290,600	£99,901,800	£78,378,100	£587,131,700

Appendix E