PE and Sport Premium scrapped: What primary schools need to consider before finalising 2026–27 budgets
Just weeks before schools finalise and submit budget plans to the Department for Education (DfE), a significant policy announcement has introduced fresh uncertainty for primary school leaders.
The government has confirmed that the long-standing PE and Sport Premium will be phased out and replaced with a new PE and School Sport Partnerships Network as part of a wider £1 billion investment in school sport over the next three years.
For primary schools, academy trusts and finance teams already working through budget planning and curriculum priorities, the timing of the announcement raises important practical and financial questions.
At Moore South, we work closely with academy trusts, CFOs and school leaders to help schools respond to funding changes, strengthen financial planning and maintain long-term sustainability. Here is what schools should know now.
What was the PE and Sport Premium?
The PE and Sport Premium was introduced to help primary schools make sustainable improvements to PE, physical activity and sport provision. Schools received ringfenced funding directly to support initiatives such as:
• Specialist PE teaching and coaching
• Staff CPD and development
• Swimming provision
• Equipment investment
• Extra-curricular sport and physical activity
• Improving participation and engagement across pupil groups
For many schools, this funding became embedded within wider curriculum and enrichment planning.
What is changing?
Under the new approach, direct annual payments to schools in their current form will end.
Instead, the government will establish a new PE and School Sport Partnerships Network designed to provide targeted and universal support based on local need rather than a fixed allocation model. The network is expected to become fully operational from spring 2027.
The overall package announced includes:
• £580 million to establish the new partnerships network
• c.£200 million of capital funding for facilities and accessibility improvements
• £100 million of transitional support for primary schools
• £166 million in 2026–27 linked to final PE premium payments and school games funding
The DfE says the objective is to move away from a “one-size-fits-all” funding approach and target areas where participation is lowest, particularly among pupils with SEND and disadvantaged groups.
Why timing matters for school budget planning
The announcement arrives at a challenging point in the school finance calendar.
Many schools are already preparing or finalising DfE budget submissions for 2026–27 while making staffing, curriculum and enrichment decisions for the next academic year.
For schools that have historically relied on PE Premium income to fund delivery, several questions now arise:
• Which activities remain affordable if funding structures change?
• Which existing commitments extend beyond current grant periods?
• How should schools treat transitional funding in forecasts?
• Are staffing and external provider costs sustainable?
• Will future support be accessible locally and consistently?
Until further operational detail is released, schools may need to avoid assuming continuation of historical funding levels within medium-term financial plans.
What school leaders should do now
Rather than reacting immediately, schools should focus on creating flexibility within financial and operational plans.
- Review existing PE and enrichment expenditure
Identify where PE Premium currently supports staffing, contracts, clubs or curriculum enhancements. - Stress-test 2026–27 budgets
Model scenarios with reduced direct funding and assess financial resilience. - Document outcomes and impact
Schools that can demonstrate successful activity and measurable outcomes may be better positioned to engage with future partnership opportunities. - Monitor DfE guidance closely
Further detail is expected around eligibility, allocation methodology and delivery arrangements. - Align financial planning with wider strategy
Physical activity increasingly links to attendance, wellbeing, enrichment and future inspection expectations.
Looking ahead
While the government’s intention is to increase participation and reduce inequalities in access to sport, the transition creates uncertainty for primary schools already managing budget pressure and operational change.
For finance teams and trust leaders, the priority now is not simply understanding the announcement – it is understanding what the change means for financial planning, curriculum delivery and long-term sustainability.
Moore South’s education specialists support academies, MATs and schools with budgeting, forecasting, governance and strategic financial planning to help leaders make informed decisions during periods of change.