An extended energy bill support scheme is “far from great” and will leave many schools having to use far higher portions of their budgets to pay gas and electricity costs than in previous years, sector leaders have warned.
The government announced today that schools are to receive another 12 months of support under a new discount scheme from April, but help will be reduced from the level of the current scheme.
The energy bill support scheme in place at the moment is set to end in March, and there had been uncertainty about whether support for schools would be extended.
Sector leaders today welcomed the greater certainty that the new scheme provides but warned that schools will remain “deeply anxious” about cost pressures.
They also warned that schools will be tens of thousands of pounds worse off per year under the new scheme than they would have been if the current scheme continued.
And there was “immediate concern” about education settings that use higher amounts of energy - such as special schools, which often run energy-guzzling hydrotherapy pools.
Energy bill scheme ‘between OK and terrible’
Steve Rollett, deputy chief executive of the Confederation of School Trusts (CST), said the new scheme appeared to give schools “more certainty until March 2024, which is welcome to help them plan”.
But he added: “The bottom line is that costs remain high, and school leaders remain deeply anxious about the impact of cost pressures - which are not limited to energy costs - on children’s education.”
Sector and trust leaders said that while the new scheme was “not a disaster” - it has put schools in a better position than they may have expected in recent months - it has still left them in a worse situation than when the energy price crisis first hit towards the end of 2021.
Stephen Morales, chief executive of the Institute of School Business Leadership, described the scheme’s announcement as “double-edged”.
“If we think about where we might have been when the energy crisis surfaced and there was no relief scheme, and then when we were not sure that we’d get further support, it’s encouraging we’ve got some support now.
“But it’s far from great. It’s not great but it’s not a disaster. Schools were planning for the worst but they’ve ended up with something between OK and terrible.”
Morales’ comments were echoed by Rob McDonough, chief executive of East Midlands Education Trust.
Mr McDonough gave the example of one school in his trust, which he said appeared to be paying less than the threshold under which support under the new scheme kicks in, saying: “It’s still far higher than they were paying before last year.
“We have to remember where our schools were before the invasion [of Ukraine]. This new tariff level is significantly higher than where we were before this starting point.
”Overall, the amount schools are spending as a proportion of overall costs is significantly higher. Energy is now a significantly higher part of our budget, when we’ve got other major pressures as well.”
And Simon Oxenham, director of resources at Southend High School for Boys, told Tes that the new scheme would leave his school tens of thousands of pounds worse off compared with if the current support continued.
He said that, having looked at the numbers, he expected the scheme would save the school £13 per student over the course of a year, compared with if there was no support at all, and that the overall energy bill next financial year would be three times higher than in 2021-22.
“Anything announced is an improvement in what we expected to have? How much? Not much,” he said.
‘Immediate concern’ for special schools
Announcing the scheme, the government said that energy-intensive users, such as some factories that burn a lot of gas, will get extra support.
But some education leaders have expressed concern that special schools are not included in this category.
Geoff Barton, general secretary of the Association of School and College Leaders, said the union would be inviting feedback from members to understand the “extent to which the discount scheme alleviates financial pressures”, and would be communicating that back to the Department for Education and Treasury “accordingly”.
He added: “We note that education institutions are not included in the list of organisations requiring a higher level of support because of their energy usage.
“Our immediate concern is that some special schools have higher energy usage because they provide hydrotherapy pools.”
The Department for Business, Energy and Industrial Strategy has been approached for comment.
What’s changing?
Previously, the amount any business could pay for energy was set at a threshold of £211 per megawatt-hour (MWh) for electricity and £75 per MWh for gas. This meant many schools saw a discount on their expected bills.
Now, though, the government has changed the system to offer a discount once you pass a certain cost threshold.
The discount offered is:
- A unit discount of up to £6.97/MWh for gas bills.
- A unit discount of up to £19.61/MWh applied to electricity bills.
However, the key detail is that this will only kick in once a threshold is passed of £107/MWh for gas and £302/MWh for electricity.
A full rundown of how the new scheme works can be read here.
Announcing the scheme, chancellor Jeremy Hunt said: “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine.
“But to provide reassurance against the risk of prices rising again, we are launching the new energy bills discount scheme, giving businesses the certainty they need to plan ahead.
“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is needed to make sure the market is working for businesses.”
Tes revealed earlier this year that schools were planning to restrict heating in order to manage soaring bills over this winter.
In December schools in England were given a share of £500 million to spend on energy upgrades to make their buildings more energy-efficient.
