North east schools have been told to expect a near 50 per cent hike in their gas bills, as one council supplier asks ministers for a bail-out to meet rising energy costs.
An investigation by Schools Week has also found other leaders are budgeting tens of thousands of pounds to meet soaring costs. Since January, wholesale gas prices have risen 250 per cent across the world.
Heads’ cost concerns are also exacerbated by having to keep classroom windows open to try and control the spread of Covid.
Council leaders in Northumberland have now written to schools minister Robin Walker and chancellor Rishi Sunak calling for “additional resources”. A letter sent to schools warns of gas prices rising 48 per cent and electricity bills by 26 per cent.
While the majority of schools are on fixed-term energy deals, meaning they should be currently unaffected by rising costs, energy in Northumberland is handled by the North East Procurement Organisation.
A letter to Northumberland heads said NEPO uses a “flexible purchasing method”. The organisation did not answer our questions this week, but experts say this can mean rates vary throughout the contract, as opposed to a fixed rate over several years.
NEPO is a partnership of 12 north-east local authorities, meaning thousands of schools could be affected.
‘Something has to suffer’
Dame Maura Regan, CEO at Bishop Hogarth Catholic Education Trust, has schools across four of the north-east regions. They all received letters warning of the hike.
“We will have to pay the bills and something has to suffer,” she said. “We will try our level best to make sure that the most goes towards children’s education, but the reality is we have to pay the bills and something has to give.”
A Northumberland council spokesperson said, “Whilst we have been prudent in our procurement arrangements, we are not insulated from the spike in energy prices and this will inevitably lead to in-year cost pressures”.
But the local Labour opposition is calling for answers on how the council allowed itself to be hit by the price rises.
Tim Golding, head of strategic partnerships at Zenergi, which supports 3,000 schools to find energy deals, estimated around two-thirds of schools were on fixed contracts, meaning their prices should be stable.
The remaining third were on flexible rates, meaning they could feel the brunt of rising costs.
The Crown Commercial Service, which runs the School Switch service, said numerous schools and academies “bypass fixed-term fixed-price contracts” and instead opt for “aggregated, flexible and risk-managed arrangements” run by CCS and other public sector buying organisations.
Schools or trusts renewing energy deals in the coming months could also be hit.
Rise could be ‘significant’ on school budgets
Stephen Mitchell, CEO at Oak Multi Academy Trust in Leicester, said they are due to renew this year “so expect to be hit by the rises in due course”, adding that the rise could be “really quite significant on school budgets.
“Out of this, I’m hopeful that the sector, across the country, will look towards better efficiency for heating and insulation. There are too many old schools out there without effective or efficient systems.”
Meanwhile, at Ladybridge High School in Bolton, an extra 20 per cent – about £17,000 for electricity and £12,000 for gas – has been budgeted this winter if heating is to be on more because of open windows.
Paddy Russell, headteacher, said: “We are talking about a significant amount of money. It’s tens of thousands of pounds, which is obviously teachers’ salaries.”
Geoff Barton, general secretary at school leaders’ union ASCL, warned schools cannot absorb extra costs and the government’s approach to ventilation has been “wholly inadequate”.
But the Department for Education has so far not committed to covering any extra costs this winter.
An Association of Colleges snapshot survey, shared exclusively with sister publication FE Week, show colleges face rising energy costs of £20 million in total this academic year.
A DfE spokesperson said: “Schools experiencing financial issues can access a range of schools resource management tools, and, in serious circumstances, additional funding or advances from local authorities or the ESFA.”
A NEPO spokesperson said they are working with “energy managers across north-east local authorities to support them in understanding the impact and to maximise energy efficiency measures”.