The Inter-authority Recoupment (England) (Amendment) Regulations 2026

Published: Fri 26th Jun 26

These Regulations amend the Inter-authority Recoupment (England) Regulations 2013 to establish new procedures for how local authorities in England reimburse one another for the cost of educating looked after children.

The instrument mandates that for education provided from 1st September 2026, a child's 'home' authority must pay a 'providing' authority for costs associated with a child who has an Education, Health and Care (EHC) plan or attends a special school.

If authorities cannot agree on a figure within six months of a claim, the home authority must pay the total expenditure incurred by the providing authority, including transport costs but excluding Dedicated Schools Grant funding.

The Regulations apply to local authorities in England and Wales but specifically govern the financial relationship between English home and providing authorities.

Arguments For

The document states that the amendments modernize the legal framework for financial recoupment between local authorities for education provided to looked after children from 1st September 2026.
Proponents may argue that the regulations establish a clear mechanism for cost recovery by enabling providing authorities to claim all incurred expenditure, including transport costs, minus Dedicated Schools Grant funding, if an agreement is not reached within six months.
The explanatory note indicates that the measure is intended to update the 2013 Regulations to align with current educational frameworks, such as the Children and Families Act 2014.
The document implies the change is administratively focused as it notes that no significant impact is foreseen on the private, voluntary, or community sectors.

Arguments Against

Legal scholars might note that the regulations create a mandatory payment obligation if no agreement is reached within a fixed six-month window, potentially reducing the flexibility of 'home' authorities to negotiate costs.
Affected local authorities may raise concerns regarding the inclusion of transport costs in the recoupment total, which may increase the financial burden on home authorities compared to previous arrangements.
Critics might argue that the distinction between education provided before and after 1st September 2026 creates two parallel systems of recoupment that must be managed simultaneously for a period.
The document does not specify a dispute resolution mechanism beyond the six-month time limit, which may lead to budgetary uncertainty for authorities during the negotiation period.

Citation, commencement and extent

These Regulations-
(a) may be cited as the Inter-authority Recoupment (England) (Amendment) Regulations 2026,
(b) come into force on 1st September 2026, and
(c) extend to England and Wales.

This section establishes the official name of the instrument and sets the date it becomes legally effective as 1st September 2026.

It specifies that the legal reach of the regulations covers both England and Wales.

Amendments to the Inter-authority Recoupment (England) Regulations 2013

-(1) The Inter-authority Recoupment (England) Regulations 2013( 2 ) are amended in accordance with paragraphs (2) to (6).

(2) In regulation 1 (citation, commencement and application)-

(a) in paragraph 2, omit '5,';
(b) after paragraph 2, insert-

'(2A) Regulation 5 applies in relation to education provided during the period beginning with 1st April 2013 and ending immediately before 1st September 2026.

(2B) Regulation 5A applies in relation to education provided on or after 1st September 2026.'.

(3) In regulation 3 (interpretation), omit the definition of 'special school'( 3 ).

(4) In the heading of regulation 5 (cases in which recoupment is required: English home authority, English providing authority), for 'required' substitute 'required for education provided before 1st September 2026'.

(5) After regulation 5 insert-

' Cases in which recoupment is required for education provided from 1st September 2026: English home authority, English providing authority

5A. -(1) This regulation applies to education provided to a looked after child-

(a) for whom an EHC plan( 4 ) is maintained under section 37(1) of the Children and Families Act 2014( 5 );
(b) who is attending a special school.

(2) Where provision for any education to which this regulation applies is made by a providing authority( 6 ) in England in respect of a looked after child who belongs to the area of a home authority( 7 ) in England, the home authority must pay to the providing authority-

(a) such amount as the home authority and the providing authority agree, or
(b) where no such agreement is reached within six months from the date on which the providing authority submits a claim for payment to the home authority under regulation 10 in respect of the costs incurred by making provision for the education of that looked after child, an amount equal to the sum of the expenditure in paragraph (3).

(3) The expenditure in this paragraph is all expenditure incurred by the providing authority by making provision for the education of the looked after child during the period to which the claim for payment referred to in paragraph (2)(b) relates, which-

(a) includes expenditure incurred by or under any enactment relating to the provision of transport for the looked after child to and from the school at which the looked after child is a registered pupil during that period, and
(b) excludes any amount received by the providing authority in respect of the looked after child through the Dedicated Schools Grant for that period.

(4) In paragraph (3)(b), 'Dedicated Schools Grant' means the grant of that name paid to a local authority by the Secretary of State under section 14 of the Education Act 2002 (power of Secretary of State and National Assembly for Wales to give financial assistance for purposes related to education or children etc)( 8 ).'.

(6) In regulation 8 (cases in which recoupment is permitted: English home authority, English providing authority) in paragraph (2), for '4 or 5' substitute '4, 5 or 5A'.

This section modifies the 2013 Regulations to create a distinction between recoupment for education provided before September 2026 and education provided on or after that date.

It introduces Regulation 5A, which mandates that for looked after children with an EHC plan or those in special schools, the 'home' local authority must pay the 'providing' local authority for educational costs.

If the two authorities cannot agree on a payment amount within six months of a claim being submitted, the law requires the home authority to pay the full expenditure incurred by the providing authority.

This total must include costs for transport but must subtract any money the providing authority already received via the Dedicated Schools Grant.

The section also updates technical definitions relating to special schools and ensures that permitted recoupment rules are updated to include these new provisions.

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