Element 3 Funding 2025-26
Introduction
On this page
Element 3 (E3) funding, sometimes referred to as 'top-up' funding, is the funding required over and above the core funding (elements 1 and 2) that a school or college receives to enable a pupil or student with high needs to participate in education and learning. Element 3 (or top up) funding is intended to contribute to the costs of special educational provision for children and young people with high needs, taking into account other elements of funding that also contribute to meeting such costs, such as mainstream schools' core funding to meet the cost of additional support up to £6,000 per pupil.
The DfE has published the High Needs Funding: 2025 to 2026 Operational Guide, which outlines how the high needs funding system will operate for the 2025/26 DSG financial year, detailing the roles of local authorities, schools, and colleges in funding arrangements. It includes information on top-up funding (i.e. Element 3) and how it supports students with special educational needs and disabilities (SEND) in mainstream settings. The DfE also publishes DSG conditions of grant, currently available for 2024-25 DSG financial year, which places a duty upon local authorities to ensure that the DSG grant monies are spent on the purpose for which they are intended.
In recent years, the budget rose exponentially from £6m to £23m for the financial year 24/25. Demand continued to increase, and a revised budget of £35m was agreed within the 24/25 financial year and is planned to continue at this level for 25/26.
From May 2024, significant work has been underway to review the approach in Norfolk to Element 3 funding, following the need to make in-year changes due to the level of demand and feedback from schools about how the current model was operating. Many school leaders have contributed to this work through workshops and, subsequently, the LFI Reference Group, as well as through the DSG consultation and conversations at various engagement events. Consideration was also given to both DfE publications when developing the revised approach for Norfolk.
We have sought a solution that provides support for, and enablement of, high levels of inclusivity in mainstream schools, alongside appropriate levels of scrutiny and challenge. We have also sought to design a model that is as equitable and clear as possible, to provide the greatest level of support to the system within the resources available.
Norfolk Schools Forum reviewed and feedback regarding the principles of this approach at their December 2024 meeting, the culmination of all of this work. See Agenda and papers.
Everyone's time, effort and contribution has been greatly appreciated.
Alongside the work undertaken specifically in relation to Element 3, we are working with all stakeholders across the county to achieve the aims set out in our Local First Inclusion (LFI) programme. At its heart, this has the aim of shifting the educational landscape in order for Norfolk's children to receive the right support, in the right place at the right time in order to FLOURISH. A key aspect of LFI programme is implementing a SEND and Inclusion Support Model (SISM) so schools, families and children have access to multi-disciplinary support and information to be empowered to meet the needs of their young people, as well as navigate clear routes through the educational landscape. The funding that schools receive is an integral part of shaping their offer; Element 3 is part of this.
Historically in Norfolk
In Norfolk, we developed a framework with school leaders for the identification of need and inclusive provision, namely the Identification of Needs Descriptors in Educational Settings (INDES) and the Inclusion and provision self-evaluation framework (IPSEF) frameworks, alongside the INDES Moderation Process (IMP) . These were aligned to the Provision Expected at SEN Support (PEaSS), which includes the LA's expectations of ordinarily available provision, and was previously co-produced, and subsequently reviewed, with both parents and professionals.
The initial intention was not that these were linked directly to funding. However, in an attempt to invest in mainstream provision to reduce the escalation of need and children leaving the mainstream system, the decision was taken to link INDES weighted scores to funding bands.
We strongly believe that the principles of the frameworks are correct, but directly linking funding to INDES meant that, in some cases, there has been a focus upon assessment of need, rather than the appropriate and adequate provision required to meet the needs. At the same time, schools have been experiencing increasing budget pressures.
In Norfolk, mirroring the national picture, we need a system that represents the greatest value for money and is sustainable, whilst also supporting schools to meet the needs of their students.
Norfolk SEND and AP Strategy and Local First Inclusion
The proposed changes to the Norfolk model for Element 3 funding should be considered within the context of the wider system, including the Norfolk SEND and AP Strategy along with the Local First Inclusion (LFI) transformation programme.
This includes working, as a system, within zones with a collective responsibility towards SEND and inclusion, specifically via the new SEND and Inclusion Support Model
| NASAPS Themes | LFI Projects |
|---|---|
|
|
| |
We anticipate reforms by the new Government, with a focus on mainstream inclusion, and will seek to update our local strategy and transformation programme to reflect these reforms.
The 5 Es
The ISOS Partnership published a report in July 2024 entitled 'Towards an Effective and Financially Sustainable Approach to SEND in England' that had key findings in relation to provision in mainstream schools including:
- Inclusive polices that promote high outcomes for all students
- Flexible and accommodative curriculum
- Strong and supportive school leadership
- Equitable distribution of resources
- Teachers who are trained in inclusive pedagogy and view it as their role to teach all learners in a diverse classroom
High-quality teaching is an expectation of all settings, delivered within an ethos of inclusion that enables young people to access their learning environments successfully, through adaptations and scaffolding to ensure success. Consistency in this practice should be throughout a setting in order for a young person to be fully included every day.
We believe that these can be summarised through 5 Es that can lead to helpful questions for schools to consider as provision is designed and implemented.
Do we have an ethos of an intentional commitment to inclusion?
Does our environment prioritise a core additional needs offer through a school?
Are our staff empowered to meet need and support children to FLOURISH through information, Continuing Professional Development and outreach?
Intentions and high-level principles of the Element 3 model
Through the work undertaken with school leaders since May 2024, along with reviews of how Element 3 funding works in other local authorities, we have developed a set of high-level principles for Norfolk's Element 3 model going forward.
The intention is to achieve a model that combines the benefits of a 'needs led' and 'money follows the child' approach, whilst considering cohorts as well as individual children. The LA also wants to provide the certainty and stability that formula funding via proxy indicators can achieve. This is with the aim of supporting schools to meet need earlier and more effectively, consequentially reducing the escalation of need and demand for specialist provision.
Through the join work, we co-produced with system leaders the following high-level principles and key features to be in place:
- Funding to be applied fairly and transparently across the county
- Controls for funding
- Mechanisms to ensure funding is being used for its intended purpose
- To focus funding where there is most complex need
- Funding to be able to be used flexibly by schools across their high SEND cohorts
- Funding needs to be linked to evidence
- A mechanism to recoup funding that is not used appropriately
- To work collectively within the system to meet high needs within the budget available
Budget / Funding assumptions
It remains our intention that there continues to be very substantial investment of high needs funding and provision into mainstream settings to seek to increase the level of inclusion and to reduce the escalation of need and demand for specialist provision. Whilst this investment includes Element 3 'top-up' funding available, it also includes both sustaining and investing in 'free at the point of delivery' services that support increased inclusion in mainstream settings and are a benefit to mainstream schools.
These include the ongoing expansion of Specialist Resource Bases, the development of Specialist Hubs of Inclusive Practice and the Alternative Provision model (including expansion and refocusing of the Direction Off-Site With Intent to Managed Move (DOWIMM) team (previously the Managed Move team), as well as development of future, school-based AP centres). See DOWIMM scheme for Norfolk schools.
This will result in significantly more resource directed into mainstream schools in future years, on top of the investment already made from the High Needs Block, with the aim of increasing inclusion and seeking to reduce the need for more specialist provision.
We indicated, as part of the DSG consultation, that we anticipate the 2025/26 Element 3 funding to continue to be maintained at c. £35m. The decision regarding the budget for Element 3 funding, along with the High Needs Block budget (and Dedicated Schools Grant as a whole), will be made through Council meetings in early 2025, as part of the overall local authority budget process.
Share this page
