High needs funding

The three elements

Element 1 is the core programme funding a student would attract anyway. Element 2 is £6,000 per high needs place. For most FE colleges, the number of places is set through the high needs place change process rather than claimed per student (see below). Element 3 is top-up funding, paid by the local authority where the student lives that has commissioned the place, for the costs of their educational support above £6,000 (high needs funding operational guide 2026 to 2027, section 9.6).

Special post-16 institutions (SPIs) in their second year of DfE place funding or later, and a small group of FE colleges and ILPs funded directly by DfE, are not funded through the place change process. Their place funding is based on the number of high needs students in their ILR R06 return, and if their 2026 to 2027 R04 count is higher than their funded places they may receive an in-year growth award (operational guide, sections 9.8 and 9.9). Those sections say awards are subject to affordability. The 16 to 19 in-year growth guidance for 2026 to 2027 (August 2026) says the 2026 to 2027 growth payment will not be subject to affordability. The two documents differ.

Who counts as a high needs student

High needs students are those who receive additional learning support funding from their local authority high needs budget, often called top-up funding or element 3 (16 to 19 funding: 2026 to 2027 rates and formula, paragraph 179).

• Aged 16 to 18: additional learning support costs of more than £6,000, with top-up funding from the local authority high needs budget. Most, but not all, have an EHC plan (paragraph 179a).
• Aged 19 to 24, in FE providers and SPIs: an EHC plan and additional learning support costing over £6,000 from the local authority high needs budget (paragraph 179b).
• Support costing less than £6,000 is funded through the disadvantage funding in the 16 to 19 allocation, and these students do not count as students with high needs (operational guide, section 9.6). For example, students on supported internships whose support costs are less than £6,000 must not be regarded as high needs, even though they have an EHC plan (section 11.2).
• Part-time or part-year students count where the support would total more than £6,000 if provided over the full academic year, as agreed with the local authority where the student lives (section 11.3; rates and formula, paragraph 182).
• The local authority where the student lives must commission the placement and the top-up. If it does not agree a placement and top-up funding, the student must not be recorded as high needs for funding purposes, even when the college has assessed them as needing additional support or has offered them a place (rates and formula, paragraph 183).

Ages 19 to 25 and EHC plans

Age is taken on 31 August of the funding year, and the rules differ for students with and without an EHC plan.

• Students aged 19 to 24 on 31 August 2026 who have an EHC plan are eligible for 16 to 19 funding (16 to 19 funding rules 2026 to 2027, paragraph 47). They are high needs students only if they also meet the conditions above.
• Other students aged 19 or over on 31 August 2026 are not normally funded at young people's rates (paragraph 47). The exception is a student continuing a programme they began aged 16 to 18 (a 19+ continuer), who is funded at 16 to 18 rates to complete it (paragraph 45).
• Rates and formula 2026 to 2027, footnote 6 to paragraph 179, says the young people's model does not fund students aged 19 and over who do not meet the high needs definition, and that they are funded at adult rates. This is narrower than paragraph 47 of the funding rules. For a student aged 19 to 24 with an EHC plan whose support costs £6,000 or less, confirm the funding route with DfE.
• High needs funding can only be used to support adults aged 19 to 25 if they have an EHC plan (operational guide, section 13.5).
• Turning 25: a plan held at 24 normally ceases when the student turns 25, but the local authority has a power to extend it until the end of the academic year in which they turn 25. If it does, it must continue to provide top-up funding to the FE college until that time. Place funding is allocated for the full academic year and would not normally be clawed back if the plan is not extended (section 11.5).
• A learner aged 25 or over on 31 August of the teaching year must not be recorded with 16 to 19 source of funding (ILR validation rule DateOfBirth_07, 2026 to 2027).

Recording in the ILR

HNS (high needs students): the ILR specification 2026 to 2027 says this is completed only where a local authority has actually paid element 3 top-up funding for a student whose agreed learning support costs are greater than £6,000. It must not be used in any other circumstances, for example where costs are £6,000 or less, or where the local authority has made no in-year contribution to the costs even if they are judged or agreed to be greater than £6,000. It is collected for funding model 25, including T Levels and the T Level Foundation Year, and must be updated each year.

The high needs funding operational guide 2026 to 2027 (section 7.6) words the test differently: students should only be counted as high needs, and recorded as such in the ILR, if the local authority has determined that top-up funding is payable for them. A student should not be recorded as high needs without that determination, even if the college has assessed them as needing support or offered them a high needs place. Where top-up has been determined as payable but nothing has yet been paid, the ILR specification's wording (no HNS until the local authority has made an in-year contribution) is stricter than the operational guide's. Elsewhere the same guide refers to students 'flagged in the ILR as being in receipt of top up funding' (section 9.8) and says the provider 'must be receiving top-up funding' (section 11.1). The documents do not settle which reading applies, so confirm the position with the local authority and DfE before the return.

EHC (Education Health Care plan): recorded with code 1 for any learner who has an EHC plan, whether or not they are high needs. Students aged 19 to 24 on 31 August who are recorded as HNS on funding model 25 must also have EHC recorded (ILR validation rule DateOfBirth_34).

Accurate in-year HNS data matters beyond the college: the number of students for whom colleges receive high needs top-up funding is used in the import/export adjustment between local authorities (operational guide, section 4.2).

Place numbers for 2027 to 2028

Local authorities, not colleges, submit changes to high needs place numbers to DfE, in a place change workbook. The deadline for 2027 to 2028 is 11.59pm on Friday 6 November 2026 (high needs place change process: 2027 to 2028 academic year, published 7 October 2026).

A college only needs to act if its place numbers should change. If no change is logged for a college, its 2026 to 2027 place numbers roll forward to 2027 to 2028 (section 3). The process does not cover SPIs already funded by DfE, the small group of FE colleges and ILPs funded directly using ILR data, or FE colleges and ILPs that will not receive element 1 from DfE in 2027 to 2028 (section 1.7).

• Agree any change in writing with your provider local authority (the one where the college is located) before it completes the workbook. The number should include places commissioned by other local authorities (sections 1.4, 2 and 6).
• Where agreement is not possible, the provider local authority should still submit a return, marked as not agreed. A requested increase marked as not agreed is included in the outcomes. A requested reduction is considered only if it is at least 10% of the 2026 to 2027 places: this single 10% threshold replaces the previous 5-place threshold for providers with fewer than 50 places. For a reduction above the threshold, DfE uses the 2025 to 2026 ILR R14 for FE colleges and ILPs (section 3.2.2).
• Outcomes are due in January 2027, with a 2-week enquiry window that closes on 29 January 2027. DfE issues 2027 to 2028 high needs allocations to FE colleges in March 2027 (section 6).