School leaders have said that delays to government support with energy bills would be “incredibly costly” as fears grow that a package will not be ready by next month as promised.
Simon Beamish, the chief executive of the Leigh Academies Trust, said leaders were “totally in the dark” more than a week after Liz Truss, the prime minister, first promised an energy price guarantee.
Nick Gauntlett, the chief executive of Dukefield Energy, a consultancy, said that dozens of schools were “holding fire” on signing new deals, raising the risk of falling onto pricier variable tariffs. Many fixed deals expire next month.
“They don’t want to do the wrong thing,” he said. Some brokers expect any guarantee to apply to all deals but others fear it will only apply to new ones, leaving many schools trapped in costly tariffs.
A spokesperson for Downing Street admitted there could be a “delay of weeks”. It told reporters this week that payments would be backdated to October 1 if this was the case.
One official told the Financial Times the plans were “not worked through yet” and may require legislation.
Schools need ‘urgent’ clarity on energy plan
Paul Whiteman, the general secretary of NAHT, the school leaders’ union, said schools needed clarity “urgently”, with many facing expiring contracts and higher costs now.
“They need to know whether they should commit to new contracts or not, and how any support will work in practice. The sums of money we’re talking about mean any delay is incredibly costly.”
John Winter, the chief executive of the Weydon Multi-Academy Trust, said he had just signed a deal that will “not be sustainable if the cap’s not put in place rapidly”.
He added: “We currently are using budgets which are built on sand. The consequences of uncertainty will affect our ability to provide stability to our communities just at the time they need it most.”
Beamish said his trust had agreed a deal on electricity but not gas as “prices carry on rising”, adding: “We await news on the proposed cap and how this is going to work.”
‘No-one knows anything’
Chris Felgate, the director of Ginger Energy, said that “no one knows anything”. He added that the measures would have to cover both new and existing deals.
However, James Robson, the chair of Powerful Allies, an energy consultancy, said this was highly unlikely given the cost.
The level of the cap remains unclear, but the government said it would be “equivalent” to the domestic cap of £2,500 for an average household. Gauntlett said it would probably not be “far off” this level.
A fully equivalent deal could mean school prices falling to about half of market rates in August, a Schools Week analysis of data from Zenergi, an energy firm, suggested.
It would still mark an increase on average tariffs available in April, and be more than five times higher than rates available the previous April, a common month for striking deals.
A secondary school paying about £30,000 a year for gas from last April would face a £171,000 bill now if the guarantee mimics the household cap. Other brokers expect it to vary more significantly from the household announcement.
Geoff Barton, the general secretary of ASCL, the school leaders’ union, said schools were “in limbo” and he hoped that a statement next Thursday and an emergency energy price bill the following day would give schools “the information they desperately need”.
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