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  • Imogen Phillips

Free School Funding

Updated: May 26, 2023

This blog will focus on various funding and finance aspects of the free school process. This will include a discussion on how free schools are funded, what grants are available, and advice for applicants when completing the financial template.


Funding Free Schools

Free schools are academies by nature; therefore, all free schools are funded directly by the DfE. For further information, please refer to the academy trust handbook.

There is a range of grants available to free school proposers, below is a summary of grant funding which may be useful to consider when putting together financial plans. For further detail, please review the academy and free school funding agreements.

Project Development Grant (PDG)

Following an initial grant of £30,000 provided for use for essential non-capital pre-opening revenue costs, the full PDG will be paid, with the rate dependent on the type of school that is being proposed. The full grant will be provided following the provisional opening date.

Recurring Expenditure Grants

It is important to keep in mind that this grant is separate from General Annual Grants (GAG) and Earmarked Annual Grants (EAG), for more information on GAG funding please review the funding payments for academies guidance. The recurrent expenditure grant refers to funding for spending on establishment, conduct, administration, and maintenance of an academy.

Capital Grant

This grant refers to spends on capital expenditure, for costs such as:

  • acquiring land and buildings

  • erecting, enlarging, improving, or demolishing any buildings

  • installing electrical, mechanical, and other services

  • buying vehicles

  • installing and equipping premises with furnishings and equipment, other than necessary repairs and maintenance

  • installing and equipping premises with computers, networking for computers, operating software, and ICT equipment

  • providing and equipping premises

In order to receive these payments, you will be required to provide an account of all capital cost spending - it is important to ensure that this grant is used only for capital expenditure costs.

General Annual Grant (GAG)

The Secretary of State will pay the academy trust annually to cover annual costs, such as:

  • teachers' salaries and related costs

  • non-teaching staff salaries and related costs

  • employee expenses

  • teaching and learning materials and educational equipment

  • buying, maintaining, repairing, and replacing assets such as ICT equipment

  • examination fees

  • repairs, servicing, and maintenance of buildings

  • medical equipment and supplies

  • staff and curriculum development

  • the costs of providing school meals for pupils - including the cost of providing free school lunches to pupils who are eligible to receive them

  • administration

GAG funding should only be used for maintaining, managing, and developing the academy, for costs listed above.

Earmarked Annual Grant (EAG)

The academy may receive additional funding through EAG, which will be assigned for a specific purpose, which will be predetermined by the DfE and the academy trust.

Additional Relevant Funding

Further funding may be available through the local authority, based on provision for students with SEND who may require higher levels of support. It is the responsibility of the academy trust to ensure that all support required under this agreement will be provided for these students.

Further Support

If you would like to speak to one of our advisors regarding any questions on free school funding and finances, please get in touch with us through via our contact page. If you would like more information on free school finances in your application, please see our previous blog on the financial template.

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