More cuts coming as energy bills soar, leaders warn

School leaders are warning of more cuts if ministers do not provide urgent help to cover surging energy bills caused by Donald Trump’s war with Iran.

The calls came after a deficit-ridden academy trust was issued with a government notice to improve as it struggled to reduce gas and electricity costs.

And, with the US president vowing to continue air strikes in the Middle East, Julia Harnden, of the ASCL leaders’ union, warned energy bill rises could leave schools “paying the price” for years.

“With this in mind, we would hope that the government is considering what financial support for the sector might be necessary,” she continued.

“Otherwise, it will be very difficult for schools and colleges to absorb these extra cost pressures without having to look at making cuts to provision.”

Market volatility

Schools Week analysis of the latest government data also suggests school energy costs spiked in 2023-24, with 2.3 per cent of income used to cover bills.

The figure slipped to 1.7 per cent last year but stayed above levels seen prior to Russia’s 2022 invasion of Ukraine.

Average gas and electricty prices in 2026 have so far been about 11 per cent higher than those seen two years ago.

And London Stock Exchange figures suggest gas and electricity prices are on track to reach their highest levels on average since 2023 by the end of this year.

Months after the Ukraine war began, the then-Conservative government unveiled its energy price guarantee scheme, which provided discounted wholesale gas and electricity for all non-domestic customers.

This included schools, amid “apocalyptic” hikes of up to 587 per cent.

Chris Felgate, executive director at Ginger Energy, said schools were “facing renewed financial pressure as energy costs rise” following the outbreak of the Iran war.

He cautioned that those renewing contracts now “may face higher prices than those available before the escalation”, having witnessed rises of up to 18 per cent.

Harnden said schools were “very susceptible” to these pressures.

“Market volatility and high prices do not just impact on energy contracts but also affect transport costs and food supply chains which can put further pressure on school budgets,” she added.

School’s energy woes

Last week, the Department for Education (DfE) published a notice to improve which it issued to the Sacred Heart of Mary Girls’ School in Upminster, east London, over the trust’s “weak financial position and financial management, governance and oversight”.

Officials accused it of failing to prepare and monitor financial plans “that ensure the trust remains a going concern”, among other things. They said it had not taken “timely action to maintain financial viability and address budget variances”.

Accounts show the school racked up a £541,000 deficit by the end of 2024-25, despite it being “majorly oversubscribed”, with “over 400 [applications] for 120 places”.

One of the reasons given for the financial issues was the school’s inability to generate the “significant savings” it had hoped to achieve on gas and electricity.

It registered just £36,000 in savings, “mainly due to heating being switched off after 1pm each day”. The DfE suggested finding “alternate suppliers for key contracts such as energy”.

‘Double squeeze’

Felgate argued that schools were being hit by a “double squeeze” on energy bills as the cost of transporting energy, government policy changes and supplier charges – all of which are passed on to customers – have also risen.

“These charges mean that even schools cutting consumption can still face higher bills,” he explained.

“For leaders already managing tight budgets, the result is simple: more money spent keeping buildings open, and less money available for pupils.”

Alex Green, the head of the Let’s Go Zero campaign, noted many leaders were responding to the issue by reducing energy use across their estates and investing in renewables, moves that provided “greater security and resilience”.

“With around 50 per cent of energy typically used when buildings are unoccupied,  during evenings, weekends and holidays, it is clear that significant savings can be made,” she said.

“Through low or no-cost measures, often focused on behaviour change, schools can reduce energy consumption and redirect those savings straight back into supporting students’ education.”

Vivienne Qurrey, headteacher at Sacred Heart of Mary, stressed that the academy was “one of many schools who are facing significant financial constraints and challenges currently”.

It had a “robust” plan in place and is working with trustees and the DfE “to ensure the school will continue to be a going concern and thrive long into the future”.

£80k saved

Education secretary Bridget Phillipson this week described energy as one of schools’ “largest non-staff costs”, with market volatility meaning “prices can spike unpredictably”.

She added: “Too many schools are locked into broker-negotiated contracts with no protection from sudden rises.”

As part of the DfE’s programme of maximising value for pupils, the government buys “energy up to 30 months ahead when market conditions are right”.

Phillipson cited one case where a trust saved almost £80,000 in one year.

Primaries could, on average, cut gas and electricity bills by £4,900 a year, according to the DfE. The figure stands at £23,200 for secondaries.

Steve Rollett, deputy chief executive of the Confederation of School Trusts, acknowledged the scheme’s “benefits”, but added: “It is not a panacea.”

The DfE has been approached for comment.