Schools

Leaders demand clarity after energy support hokey cokey

Confusion reigns amid mixed messages from government about extending support next year

Confusion reigns amid mixed messages from government about extending support next year

26 Nov 2022, 5:00

Investigation

School leaders are demanding clarity over the government’s energy price guarantee, with some schools likely to pay tens of thousands of pounds more if it ends in April.

Mixed messages from government about extending support next year have raised hopes, dashed and then raised them again.

September’s energy bill relief scheme announcement included a review after six months, determining which sectors would receive continued support. 

Energy brokers report trusts have been holding off deciding on new contracts – sometimes against brokers’ advice – to find out whether schools are included.

But last week the autumn statement stated public sector organisations would “not be eligible”. Government figures have argued £2.3 billion extra school funding would help instead.

Yet on Tuesday, schools minister Nick Gibb mentioned the review, saying it would “determine support” when asked about school bills – suggesting an extension is not impossible.

Budget boost ‘welcome but not sufficient’

A picture of Julia Harnden from ASCL
Harnden

Julia Harnden, funding specialist at the Association of School and College Leaders, said the sector needs “clarity” to plan its spending, with April only five months away.

The government’s boost to core budgets is “welcome but not sufficient to cover very steep rises in energy costs”.

Hugh Greenway, CEO of the Elliot Foundation, also welcomed it but said it marked a “significant shortfall” versus inflation – and would not reach trusts till September.

Energy quotes seen by Schools Week suggest schools taking out 12-month fixed contracts now would pay 42.2 per cent more for gas and 37 per cent more for electricity than the current price guarantee.

For the average secondary in a recent small-scale DfE energy survey, that could mean paying £47,200 more a year. The figures only cover the wholesale part of bills, with actual costs potentially higher.

The average school polled is likely to have already seen wholesale costs more than double if its contract has expired, even with the government’s price guarantee.

Schools face paying five times more for energy

Schools Week analysis of Zenergi figures indicates schools face paying five times more from April than the contracts available in April 2021.

Wreake Valley Academy in Leicester’s £12,282 bill for last month marked a 123 per cent hike year on year. Government support only reduced it by £142, according to headteacher Tim Marston.

A picture of school leader Tim Marston
Marston

“People think ‘what will happen if the government help stops in March?’ Well the government help has had minimal impact.”

The school has managed to reduce electricity usage but only by four per cent, including running IT updates in the day to turn computers off overnight. Its gas is fixed until July, but Marston predicted costs will treble thereafter.

“It feels like the problem is too big for us to solve. Personally, I think there will be some [support] after March but I’m an optimist. But until we can budget costs, you don’t know how much you will be able to invest.”

Tim Golding of Zenergi said some school clients were “disappointed” by the complicated relief scheme. While households see a fixed cap per unit of energy used, schools receive grants nominally covering the gap between a “supported price” and what they pay.

Schools saving less than expected

But grants are actually calculated based on weekly average prices, not prices schools have agreed – leaving some saving less than expected and budgeted for.

Janine Owen, chief finance officer at Ace Learning, said she was “frustrated” her trust would not know its current bills until Christmas, with suppliers still finalising them. One of its schools also uses heating oil, like other schools without local gas access.

A picture of school leader Jonny Uttley
Uttley

The autumn statement confirmed alternative fuel users will have to apply to a still-unfinished scheme, and only receive £150, with unspecified top-ups for larger users.

But more than 20 Conservative ministers and senior MPs are reported by the i to have claimed £16,000 collectively in energy expenses this year – including a £1,808 claim for heating oil by Gibb.

The price guarantee is expected to mean much bigger savings for one East Yorkshire secondary in the Education Alliance Trust, however.

CEO Jonny Uttley said bills would still cost between £125,000 to 150,000, but could have been £250,000 without help.

A government spokesperson said the energy scheme would reduce school bills and provide “certainty” over the winter, and highlighted a £4 billion boost to this year’s funding.

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