Schools with high energy bills will get discount under reduced scheme

Schools ARE included in new energy support scheme - but fewer will benefit and it is less generous from April

Schools ARE included in new energy support scheme - but fewer will benefit and it is less generous from April

9 Jan 2023, 18:56

Schools will get energy support from April, but only those paying the highest rates will benefit and financial support has been vastly scaled back.

The government confirmed today schools will get support after the current £18 billion energy bill relief scheme ends in March, alongside other public sector bodies, charities and businesses.

However, fewer schools are eligible under the new Energy Bills Discount Scheme, which runs for 12 months from April 1.

Under the new scheme, only those paying above £107 per megawatt hour for gas or £302/MWh for electricity will receive help, automatically applied to bills.

The previous scheme had significantly lower thresholds of £75 per unit of gas and £211 for electricity.

Fewer than one in five schools surveyed by the Department for Education last spring – the most recent data available – would be eligible now if they remain on the same tariffs.

Many will have entered costlier contracts since. Yet the average school taking out a new deal last April – a common period for renewals – would have seen gas and electricity prices capped under the previous scheme – but not the new one, according to Schools Week analysis of data from brokers Zenergi.

They stand to lose a discount worth around £5,000 a year, if their usage is in line with a recent goverment case study explaining the existing scheme.

Meanwhile the average school taking out a year-long contract now would have to be paying twice current market rates for gas – and triple what schools polled in the spring were paying – to qualify for support.

Schools Week previously reported how even under the previous scheme, some schools were likely to see costs double on previous levels.

Geoff Barton, general secretary of the Association of School and College Leaders, called the announcement “welcome clarity after months of uncertainty” about whether schools would receive any help beyond March at all.

But he added: “While it is right that there is a discount for those with the highest bills, we are concerned that many schools may not be eligible for this.”

He also warned some special schools faced especially high costs due to provision such as hydrotherapy pools, but were not included among high-usage sectors eligible for a separate support package also unveiled this week.

Wholesale prices now falling

The government noted wholesale prices had fallen significantly in recent months. The measures will still help some of those “locked into contracts signed before recent substantial falls…and provide others with reassurance against the risk of prices rises again”.

Price thresholds are around half of what schools renewing in August faced when the market spiked, keeping their costs down.

But the government is also no longer guaranteeing it will cover all costs above its thresholds, potentially raising costs further for those on particularly expensive tariffs.

The unit discount will be capped at £6.97 per megawatt hour for gas, and £19.61/MWh will be applied to electricity bills. Support under the new scheme is capped at £5.5 billion.

The government said the lower level of support “strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets”.

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