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Introduction

The post-16 National Insurance contributions (NICs) grant is for the purpose of:

• supporting eligible settings with the increase to employers’ National Insurance contributions, arising from their post-16 education from April 2026
• helping with other key priorities from August 2026 as explained below

Legislation

The post-16 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 for Education attaches the following terms to the grant payable.Ìý

Grant variation

A variation to the post-16 NICs grant will take effect from 1 August 2026 as follows.

Amended purpose of the grant

The primary use of this grant is to cover the increased costs of the NICs increase over the financial year.

The grant can also be used by colleges to help with their non 16 to 19 education delivery, and by local authorities with their delivery of adult and other education, to address key priorities, particularly recruitment and retention needs, to drive forward high-quality delivery.

Any additional funds can be carried into the following year to cover costs for the same purposes.

All other conditions of grant remain unaltered.

We will make available additional funding equivalent to just over 93% of the calculated figure for component 2 and component 3 of this grant. These components are the elements of the post-16 NICs grant which support:

• colleges with their non 16 to 19 education delivery
• local authorities with adult centrally employed teachers

We have updated the funding methodology and aim to publish updated grant allocations at institutional level by September.

Read these in conjunction with the conditions of grant.

Period

These conditions of grant cover the period April 2026 to March 2027.

Eligibility

The following settings are eligible to receive funding provided they meet the criteria:Ìý

• maintained school and academy sixth forms
• 16 to 19 academies
• 16 to 19 schools
• general further education (FE) colleges
• sixth-form colleges
• designated institutions – including the new designated institutions that form part of higher education provider group structures
• local authorities

Criteria

Eligible settings that are in receipt of annual funding allocations from the Department of Education (DfE) for the provision of post-16 education.Ìý

Payments

Calculation

We have calculated allocations for this grant by using the funding methodology set out in the published guidance. We have also published grant allocations at institutional level.

Payment timetable

We will make one payment to cover the 2026 to 2027 financial year.

Setting	Single payment for 2026 to 2027 financial year
Local authorities and maintained school sixth forms and 16 to 19 schools, all colleges and designated institutions	September 2026
Academy sixth forms and 16 to 19 academies	October 2026

Setting closures, openings and mergers, including academy conversions

If a setting closes during the financial year, the local authority (for maintained settings) or DfE (for academy and FE settings) should take all endeavours to recover any unused grant for the proportion of the financial year that remains after the setting closes. Local authorities (for maintained settings) must return any recovered unused grant back to DfE.

New settings opening after 1 April 2026 will not receive an allocation of the post-16 NICs grant for the period April 2026 to March 2027.

This grant is allocated on a setting basis. DfE will not seek to recover any grant funding from a local authority if a school converts to academy status after we have made the payment. The grant allocation is intended for the school, and we will assume 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.

Following the merger or academy conversions of any FE setting during the period April 2026 to March 2027, DfE will not seek to:

• recover any grant funding
• make any additional payments or adjustments

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 2027. Local authorities must pass funding on to their maintained schools in a timely manner in line with their scheme for financing schools.Ìý

Permitted use of funding

Funding must be used in line with the amended purpose of the grant.

Funds may be carried forward past 31 March 2027 for the purposes outlined in these conditions.

Assurance

Local authorities and settings are required to maintain and keep clear records of income and expenditure in relation to this grant including evidence of the use of funds.

Further information

To reflect the wider coverage of the NICs grant, this grant will be renamed the post-16 budget support grant (P16BSG) in April 2027, aligned to the new financial year.

Books, other documents and records relating to the recipient’s accounts shall be open to inspection by the Secretary of State for Education 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 settings shall provide information as may be required by the Secretary of State for Education to determine whether they have complied with these conditions.

Variation

The basis for allocation of grant may be varied by the Secretary of State for Education from that set out above.

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 for Education may recover some or all of the post-16 NICs grant that has been allocated. We will notify the local authority or setting of this in writing.

We will make recoveries by invoice or by offsetting the amount against subsequent payments due from DfE.Ìý

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.

Overpayments

If a setting or local authority identifies that we have overpaid them, they must contact DfE to arrange repayment of the excess. Where DfE identifies an overpayment, we may seek to recover the excess. We will notify the local authority or setting of this in writing.

Enquiries

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