The Department for Education has laid the Inter-authority Recoupment (England) (Amendment) Regulations 2026, a technical instrument with direct consequences for local authority education budgets. According to the legislation.gov.uk text, the Regulations were made on 24 June 2026, laid before Parliament on 26 June 2026 and will come into force on 1 September 2026. The amendment sits within the long-running recoupment system under the Education Act 2002. In simple terms, that system deals with cases where a child belongs to one English local authority but education is being provided by another authority, creating a need to settle who ultimately bears the cost.
The main structural change is a clean split between the old rule and the new one. Regulation 5 of the 2013 Regulations is now expressly limited to education provided from 1 April 2013 up to, but not including, 1 September 2026. A new regulation 5A is inserted for education provided on or after 1 September 2026. That matters because councils will now need to identify the relevant time period before deciding which recoupment rule applies. Cases that run across the summer cut-off will need careful handling, especially where claims cover provision before and after the new start date.
The new rule is aimed at looked after children in higher-cost specialist settings. The legislation text states that regulation 5A applies to education provided to a looked after child for whom an Education, Health and Care plan is maintained and who is attending a special school. There is, however, a drafting point on the face of the legislation page. The Explanatory Note describes the new regulation as applying to a looked after child for whom an EHC plan is maintained or who attends a special school. For legal scope, the operative wording in regulation 5A is the controlling text, so this is likely to be read closely by local authority lawyers and finance teams.
Where the new rule applies, the home authority in England must pay the providing authority in England either an agreed amount or, if no agreement is reached, a statutory fallback amount. The six-month clock starts when the providing authority submits a claim for payment under regulation 10. If agreement has not been reached within that period, the home authority must pay an amount equal to all expenditure incurred by the providing authority for the relevant period. The legislation is explicit that this includes home to school transport costs. It is equally explicit that any amount the providing authority has already received for that child through the Dedicated Schools Grant must be left out of the final claim.
The instrument also makes several technical corrections to the 2013 Regulations. It removes the earlier definition of “special school” from regulation 3, reflecting the fact that the previous statutory cross-reference had become outdated. The Explanatory Note points readers instead to section 337 of the Education Act 1996 for the current test in England and Wales. Regulation 5 is also retitled so that its time-limited effect is clear on the face of the legislation. In parallel, regulation 8 is amended so that the discretionary recoupment route does not apply where regulation 5A applies. In practical terms, cases falling within the new rule sit within a mandatory repayment route rather than a merely permitted one.
For providing authorities, the amendment offers a clearer legal route to recover the cost of specialist placements for some looked after children. For home authorities, it increases the value of reaching agreement early, because the fallback position after six months is tied to the providing authority’s full eligible expenditure for the period, less Dedicated Schools Grant income. The administrative effect is likely to be felt across several teams at once. SEND officers, virtual school staff, transport teams and local authority finance officers will all need consistent records on placement dates, school type, EHC plan status, transport spending and the timing of any claim under regulation 10.
The Regulations were signed by Georgia Gould, Minister of State at the Department for Education. The accompanying note states that no impact assessment has been produced because no, or no significant, effect is foreseen for the private, voluntary sector or community bodies. That statement should not be read as meaning the amendment is operationally minor for councils. The budget effect falls inside local government, not outside it. Between now and 1 September 2026, authorities with cross-border specialist placements will need to review existing agreements, claims processes and internal charging assumptions against the new statutory wording.