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1. ±õ²Ô³Ù°ù´Ç»å³Ü³¦³Ù¾±´Ç²Ô â¶Ä¯Â�

1.1 ³¢±ð²µ¾±²õ±ô²¹³Ù¾±´Ç²Ô Â�

The National Insurance contributions (NICs) grant will be paid by the Secretary of State for Education as a grant under section 14 of the Education Act 2002. In accordance with section 16 of that Act, the Secretary of State attaches the following terms to the grant payable.Ìý

1.2  P³Ü°ù±è´Ç²õ±ð Â�

The Department for Education (DfE) will provide over £930 million to support mainstream schools (in respect of their 5 to 16 provision) and high needs settings with the increase to employers� NICs from April 2025. We are also providing £25 million in respect of schools with early years provision and £155 million for post-16 schools and academies and further education colleges. Taken together, this is an increase of over £1 billion in financial year 2025 to 2026.  �

The NICs grant distributes this additional funding in respect of mainstream schools (for the 5 to 16-year-old age range), as well as to local authorities employing centrally employed staff (CES) in England.Ìý

The NICs funding for specialist high needs settings, including alternative provision, is being allocated through the core schools budget grant (CSBG) for 2025 to 2026.ÌýÌý

Funding in respect of post-16 provision will be distributed through the Post-16 National Insurance contributions (NICs) grant.Ìý

Funding in respect of early years providers will be distributed through the early years National Insurance contributions and teachers� pay grant (EY NTPG).  

1.3  P±ð°ù¾±´Ç»å Â�

These conditions of grant cover the financial year 2025 to 2026. �

The funding for mainstream primary, secondary and all through schools will be incorporated into core budget allocations for 2026 to 2027, by being rolled into the schools national funding formula (NFF) for 2026 to 2027.ÌýÌý

Funding for CES will be rolled into central schools services block funding for 2026 to 2027.  �

2. ·¡±ô¾±²µ¾±²ú¾±±ô¾±³Ù²â â¶Ä¯Â�

2.1  Types of settings �

The following settings are eligible to receive funding via local authorities: �

• maintained mainstream schools, in respect of theirâ€�5 to 16 provision 

• special units and resource provision (SURPs) located within mainstream settings 

The following settings are eligible to receive funding directly from DfE: �

• mainstream academies and free schools (including studio schools and university technical colleges), in respect of theirâ€�5 to 16 provision 

• city technology colleges Â�

2.2 Centrally employed staff �

Local authorities are also eligible to receive funding for teachers who are centrally employed by the local authority. Dependent on local definitions, this may cover the following teachers:   �

• peripatetic teachers, home tutors, and teachers who are employed by education authorities to provide education in institutions other than schools (for example hospitals, home tuition, assessment centres andâ€� pupil referral units

3. ±Ê²¹²â³¾±ð²Ô³Ù²õ â¶Ä¯Â�

3.1 °ä²¹±ô³¦³Ü±ô²¹³Ù¾±´Ç²Ô â¶Ä¯Â�

Allocations of this grant have been calculated using the methodology provided in the NICs grant  methodology document.

3.2  Payment timetable �

DfE will pay the NICs grant to local authorities for the 12 month period April 2025 to March 2026 in a first payment in September 2025 with an updated payment in March 2026.

The first payment in September will include the first allocation to mainstream schools with SURPs, based on 2024 to 2025 academic year place numbers.Ìý

The second payments of the NICs grant in March 2026 will incorporate the second allocation for mainstream schools with SURPs (using 2025 to 2026 academic year place numbers) and allocations for ‘new and growingâ€� mainstream schools, as set out in the methodology document.Ìý

Mainstream academies will receive their allocations directly fromâ€�DfE.Ìý

	Local authorities (high needs settings and CES) and their maintained schools	Academies
Payment 1 (which will include the first allocation for mainstream schools with SURPs)	September 2025	October 2025
Payment 2 (to cover ‘new and growing� schools, and the second allocation for mainstream schools with SURPs)	March 2026	April  2026

3.3 School closures, openings and academy conversions �

For mainstream schools that open in September 2025, we will confirm NICs grant allocations in February 2026, and make payments in March 2026. We will calculate their allocations using pupil number data from the October 2025 census.  �

The allocation will be pro-rated to the proportion of the 2025 to 2026 financial year that the setting is open. �

DfE will make a revised allocation to mainstream schools that are not fully open and are still growing their year groups since opening. This means that if, at the start of the autumn term 2025, the setting has been open for fewer years than the number of year groups in the setting, DfE will confirm the setting’s final allocation for 2025 to 2026 in February 2026, by revising the indicative allocations published in May 2025.ÌýÌý

The revised allocation will be based on pupil numbers in the October 2025 school census.  �

If a school is closing during the financial year, the local authority (for maintained schools) should allocate the grant for the proportion of the financial year the setting is open. �

Local authorities should pay the NICs grant allocations to any and all schools listed as maintained schools in the local authority area on the relevant allocation spreadsheet.Ìý

In a small number of cases, schools that convert to academy status after the allocations spreadsheet is produced, will still be listed as local authority maintained schools on the allocations spreadsheet. In such cases, the local authority should still pass the funding listed on the spreadsheet to the successor academy.Ìý

The grant allocation is intended for the school and it will be assumed the local authority passed on the entire grant funding to the school immediately upon receipt from DfE. In addition, any unspent grant funding should remain with the school after it converts.  �

In respect of calculating a school’s final accounts, any pro-rated amount up to the point of conversion is included in the balance calculation for the school. The remaining amount which relates for the period after the school has converted should be accounted for by the academy.Ìý

3.4 Additional local authority duty �

Local authorities will be required to certify that they have passed on the correct amount of funding to schools or, where funding has been spent centrally, that it has been spent in line with these conditions of grant.� DfE will issue a certification form in spring 2026. Local authorities must pass funding on to their maintained schools in a timely manner in line with their scheme for financing schools. �

Mainstream schools �

Local authorities must pay NICs grant funding to each: �

• maintained primary and secondary school Â�

• all-through maintained school Â�

the allocation amounts shown in the school level and local authority allocations. �

Local authorities must comply with the condition above irrespective of any deficit relating to the expenditure of the school’s budget share. �

We have published school level allocations in May 2025.

In all settings NICs grant funding for mainstream schools is not part of maintained schools� budget shares nor part of the individual schools� budget. It is not part of academies� general annual grant. It is not to be counted for the purpose of calculating the minimum funding guarantee for 2025 to 2026. �

Centrally employed staff �

The NICs grant will provide funding to local authorities in respect of teachers categorised as centrally employed on the schools workforce census 2024.   �

Local authorities should allocate all or a portion of the funding they receive for their CES. �

4. ´¡²õ²õ³Ü°ù²¹²Ô³¦±ð Â�

4.1 Eligible spend �

Mainstream academies must only spend NICs grant funds for the purposes of the school.  �

Local authorities must ensure that their maintained mainstream schools only spend NICs grant funds for the purposes of the school or unit. �

Local authorities must use the funding allocated in respect of CES in support of the schools budget as defined in the School and Early Years Finance (England) Regulations 2025. It can be used for no other purpose.Ìý

4.2 Carry forward �

In all schools, NICs grant funds may be carried forward past 31 March 2026.Ìý

5. Further information �

Books, other documents and records relating to the recipient’s accounts shall be open to inspection by the Secretary of State and by the Comptroller and Auditor General. �

The Comptroller and Auditor General may, under section 6 of the National Audit Act 1983, carry out examinations into the economy, efficiency and effectiveness with which the recipient has used its resources. �

Local authorities and schools shall provide information as may be required by the Secretary of State to determine whether they have complied with these conditions. �

6. ³Õ²¹°ù¾±²¹³Ù¾±´Ç²Ô â¶Ä¯Â�

The basis for allocation of grant may be varied by the Secretary of State from that set out above, if so, requested by the local authority or setting. �

7. Recovery of funding �

If a local authority or setting fails to comply with the terms and conditions set out in this document, the Secretary of State may recover some or all of the NICs grant that has been allocated. This will be notified in writing to the local authority, school or college. �

Recoveries will be made by invoice or by offsetting the amount against subsequent payments due from the department. �

The recipient must notify DfE immediately through the   if it becomes aware of any instance of error, suspected fraud or financial irregularity in the use of the funds. �

8. °¿±¹±ð°ù±è²¹²â³¾±ð²Ô³Ù²õ Â�

If a setting or local authority identifies that it has been overpaid, it must contact DfE to arrange repayment of the excess. Where DfE identifies an overpayment, it may seek to recover the excess. The local authority or setting will be notified of this in writing. �

9. ·¡²Ô±ç³Ü¾±°ù¾±±ð²õ â¶Ä¯Â�

For queries relating to these terms and conditions please use the .