Grant to cover rise in employer national insurance contributions

From April 6, employers’ national insurance contributions will increase from 13.8 per cent to 15 per cent. The government has announced that it will provide more than £1 billion in funding for schools to cover the rise in employer national insurance contributions.

The cash will cover increases for both teachers and support staff and for councils employing centrally-employed teachers.

The payments are based on factors used in previous pay and pension grants, including a basic per-pupil rate and a lump sum paid to all schools (see funding rates below).

The base funding rates for 2025 to 2026 financial year are:

• a basic per-pupil rate of £78 for primary pupils, including pupils in reception
• a basic per-pupil rate of £68 for key stage 3 pupils
• a basic per-pupil rate of £77 for key stage 4 pupils
• a lump sum of £2400
• a FSM6 per-pupil rate of £75 per eligible primary pupil
• a FSM6 per-pupil rate of £60 per eligible secondary pupil

For academies, they will ensure that the usual arrangements are in place to cover the NICs grant for the period April to August 2026.

The cash will be paid in the form of a grant, although for high needs settings it will go through the core schools budget grant.

Allocations for schools will be published in May, for payment in September. Updated allocations for new and growing schools will be published next February.

Julia Harnden, funding specialist at the Association of School and College Leaders, said: “We are still in the process of gathering feedback from members about the adequacy of the rates for the National Insurance contributions grant, but early indications suggest shortfalls ranging from around 10 to 35 per cent.

“This represents large sums of money that schools must now account for and only adds to the financial pressure that they are already under. We need to understand how representative these shortfalls are across the system.”