England updates council payment rules for looked after children from September 2026

This is one of those education rules that looks dry until you ask the human question underneath it: when a child in care is taught by a different council, who pays? The Inter-authority Recoupment (England) (Amendment) Regulations 2026 were made on 24 June 2026, laid before Parliament on 26 June 2026 and come into force on 1 September 2026. (legislationtracker.co.uk) If you are reading this as a teacher, foster carer, student or social worker, the practical point is simple. From September, the payment rules are being made clearer for looked after children in EHC-plan and special-school cases. (legislationtracker.co.uk)

A looked after child is, in everyday language, a child in the care of a local authority. An EHC plan is the legal document that sets out a child or young person’s education, health and social care needs and the extra support to meet them. (gov.uk) The regulation also uses two labels you need to know. The home authority is the council responsible for the child, while the providing authority is the council making the education available. That matters when care responsibility and school provision sit in different places. (legislationtracker.co.uk)

From 1 September 2026, new regulation 5A sits alongside the older recoupment rules. In plain terms, it is aimed at the high-needs cases where looked after children’s education crosses council boundaries and involves EHC plans and special schools. (legislationtracker.co.uk) **What this means:** if one English council is providing the education in a case covered by the new rule, the child’s home authority must reimburse it. The first route is for the two councils to agree a figure, rather than leave the bill hanging in the background. (legislationtracker.co.uk)

The sharper rule appears when the councils cannot agree. Once the providing authority has sent a claim, there is a six-month window to settle the amount. If that deadline passes without agreement, the home authority must pay the full qualifying expenditure for the period covered by the claim. (legislationtracker.co.uk) That total includes transport to and from school, so school travel is expressly part of the calculation. But it leaves out any amount the providing authority has already received for that child through the Dedicated Schools Grant, the main government grant for local authority school funding. (legislationtracker.co.uk)

The amendment also draws a clean line between old cases and new ones. The previous rule continues to cover education provided before 1 September 2026, while the new rule applies to education provided on or after that date. (legislationtracker.co.uk) For councils, schools and finance teams, that means dates matter. A claim that spans August and September 2026 may need careful checking so the right rule is applied to the right period. That is not framed as a family-facing promise, but it is the practical effect of having a before-and-after switch written into the law. (legislationtracker.co.uk)

For families, this is mostly a behind-the-scenes funding change. It does not rewrite who can get an EHC plan, and it does not create a new school application route. What it does is make the repayment duty clearer when different councils are involved in supporting a looked after child’s education. (gov.uk) **Why that matters:** when payment duties are vague, arguments between public bodies can drag on. When the rule is clearer, there is at least a firmer starting point for sorting the bill, including transport. That may help professionals protect placements and plan support with more confidence, although that is an inference from the way recoupment works rather than a guarantee written into the instrument. (gov.uk)

There is a wider media-literacy lesson here too. A small statutory instrument can look like pure paperwork, but it tells you how rights on paper are translated into funded support in real schools. Terms such as recoupment, home authority and Dedicated Schools Grant are not just technical language; they are the machinery that decides whether one council can recover costs from another. (gov.uk) So the fairest short summary is this: from 1 September 2026, England’s councils get a clearer rule on paying for certain cross-authority education costs for looked after children in EHC-plan and special-school cases, with transport counted in and DSG income taken out of the final recoupment total. (legislationtracker.co.uk)