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Budget management - why schools need energy efficiency plans

February 27, 2023, 12:24 GMT+1
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  • Many primary leaders expect their annual bills to more than double by the end of the year, warns James Bowen
Budget management - why schools need energy efficiency plans

Counsellor, strategist, social worker, motivator… the list of roles a headteacher has to perform in any given day is almost endless. Now the energy crisis has added a new duty to that list - that of ‘money-saving expert’.

An NAHT survey last spring found more than a third of school leaders were predicting a budget deficit by the end of this academic year caused directly by increased energy costs. Soaring energy bills meant they were having to cut spending on everything from teachers, teaching hours and teaching assistants to non-educational support and services for children, building maintenance and equipment.

It became clear that the government had to act and the Energy Bills Relief Scheme, introduced in April last year, protected schools from the very worst of the energy price increase. However, as with all government schemes, there were caveats. The criteria meant that not all schools received support, and even those protected from the most extreme rises have faced big increases. We know of primary school leaders who are expecting their annual bills to have more than doubled by the end of the financial year, even with government support.

The biggest worry when the scheme was announced was that it was time-limited and there were no promises that it would be extended beyond April 2023. The subsequent turmoil in government and the appointment of a new chancellor added to the anxiety as Jeremy Hunt made it clear that he considered the scheme ‘unsustainable’.

Early in the New Year, the government announced what would happen once the current scheme expires in April. The good news is that the replacement, the Energy Bills Discount Scheme, will apply to schools. The bad news is that far fewer schools will be eligible and for those which are, support will be scaled back significantly.

Previously, schools were supported if they were paying more than £75 per unit of gas and £211 for electricity. Under the new scheme, only those billed above £107 per megawatt hour for gas or £302/MWh for electricity will get help. This means there is likely to be a considerable drop in the number of schools receiving support. While the government will point to falling wholesale prices, it seems certain that many schools will face further increases in energy costs in the short term at least. We urge ministers to continue to closely monitor the impact of energy costs on schools and be prepared to offer additional help where needed.

The extra £2bn announced for schools in the Autumn Statement may ease this pressure. However, schools will almost certainly need to call on this funding to help cover other inflationary pressures, as well as unfunded staff pay awards. It is a big concern that this additional money simply won’t stretch far enough to offset the impact of all those extra costs.

So where does this leave school leaders and how much will they need to be channeling their inner Martin Lewis to find yet further savings when the new scheme kicks in?

The government continues to suggest that schools should seek energy savings where possible and has provided a small capital grant for 2022-23 to help them with this. Of course, where savings can be found and schools made more energy efficient, this should be explored. Recently published advice from the DfE includes suggestions such as replacing fluorescent lamps with LED lighting or adding movement sensors. While such suggestions are unlikely to lead to massive reductions, to coin a phrase, ‘every little helps’.

What is also needed, however, is a long-term strategic plan from government, supported by funding, showing how the entire school estate can be made more energy efficient and carbon neutral - not only through new-builds but also by redeveloping existing schools. Schools have the potential to lead the way when it comes to harnessing renewable energy, but they can’t be expected to foot the bill, or to become overnight experts in heat pumps and solar panels. The energy cost crisis and climate emergency must be catalysts for decisive action by government to protect schools and help them become part of a long-term energy solution.

James Bowen is director of policy at school leaders’ union NAHT