School budget planning 2025/26 - DSG Allocation update

As school leaders will, no doubt, be aware, the DfE have not provided provisional Dedicated Schools Grant (DSG) funding allocations for 2025-26 on the normal timescales seen in previous years, due to a combination of the election and then the change of Government.  This means that the DSG consultation undertaken earlier this term was on the basis of principles only, and the local authority (LA) have not been able to provide schools with provisional allocations during the autumn term that many schools would use for early planning. 

The Department for Education published provisional Dedicated Schools Grant National Funding Formula allocations for 2025-26, including for mainstream schools (Schools Block DSG), last week on Thursday 28 November.

Whilst the National Funding Formula allocations are used by the Government to calculate the level of Dedicated Schools Grant allocated to local authorities, the formula for distribution of the Schools Block DSG to mainstream schools is determined locally by the LA following consultation with schools and Norfolk's Schools Forum within the parameters of the National Funding Formula (NFF).  The LA's DSG consultation with schools took place during October, and feedback from that consultation was provided to Schools Forum members in November.

The principle of local mirroring of the National Funding Formula will continue in 2025-26.  This means that the local formula will continue to set factor values for mainstream school within +/- 2.5% of the published NFF rates, as the DfE continues to work towards a direct National Funding Formula in future years.  At the November Schools Forum meeting, it was recommended to the LA not to use a funding cap for gains in 2025-26 and, instead, to adjust the NFF factor values to ensure affordability of the local formula, including to allow for any Schools Block DSG to High Needs Block DSG transfer (requested by the LA via a disapplication request to the Secretary of State) - please see the letter shared from Schools Forum last week for further information.

Unfortunately, the DfE have not issued a modelling Authority Proforma Tool for 2025-26 to local authorities.  This is the tool that local authorities would normally use in the autumn term to provide schools with provisional allocations to support consultation.  Due to the complexity of the various protection factors within the funding formula, it is not possible to provide schools with indicative local funding formula budgets at this time.

To enable schools to be informed for 2025-26 budgeting as soon as possible, the LA will issue a technical paper by the end of January for the mainstream schools' 2025-26 funding formula based on actual DSG allocations received from the DfE using October 2024 Census data (actual DSG allocations will be received by the LA in December).  This will exclude non-DSG grants and any other accompanying documentation that is published for the budget share.  It should be noted that these would be provisional allocations whilst final checks and balances in conjunction with the DfE are undertaken alongside decision making through council meetings.  The usual timescale of end of February for publication of final budget shares and all related documents will still apply.

If you have any questions, then please use the budget.share@norfolk.gov.uk email address.