ENERGY OPTIONS FOR SCHOOLS
A collective sigh of relief must have gone up across the entire Education sector after the Government broadly promised to help schools with energy costs. With bills set to quadruple in some cases, many schools and academic trusts were facing a very real threat of running out of money. After several years of disruption, the possibility that schools might have been forced to close to save fuel costs, seems almost unthinkable.
COMING IN FROM THE COLD
While questions remain over what form government assistance will take, it seems set to prevent a cold winter in the classroom. The Russia-Ukraine conflict has thrown up a further ball of energy uncertainty for an industry where prices were already rising markedly. There are plans in the UK to create more sustainable, renewable and self-sufficient sources of energy but we are talking years here, before anyone sees the benefit.
Schools planning for the future may wish to review their energy options now to secure pricing through and beyond any period of government assistance.
THERE MAY BE TROUBLE AHEAD
Typically, two in three schools will be looking at renewing energy contracts each year. Some have found fixed deals being withdrawn, leaving many at the mercy of unknown variable rates, making it impossible to budget effectively.
The Education sector is also having to contend with spiralling costs for services, supply delays for equipment, recruitment issues, and extra demands on pay from staff.
DIFFICULT DECISIONS FOR SCHOOLS
While lockdown gave some academic institutions the opportunity to balance the books, perhaps even achieve a financial surplus, nobody expects the money to last indefinitely. In order for schools to continue to operate effectively, it seems that some tough choices will have to be made.
What options might the Education sector be forced to consider to preserve their finances?
Curb Energy Usage
Schools are looking at other areas where they can preserve energy, such as installing solar panels or replacing tungsten lighting with energy-efficient LEDs. From a sustainability point of view, these are clearly excellent choices but they still require investment, depleting school coffers.
Elsewhere, room for manoeuvre is limited. People might accept the closure of an energy-intensive swimming pool but what about a hydrotherapy pool for pupils with special educational needs? Likewise the need to maintain and replace advanced electronic equipment, in order to help care staff lift or move children.
Reduce extra-curricular activity
If schools have to save money, then it seems inevitable there will be less extra-curricular provision for pupils. For a start, few schools will want their equipment burning cash out of hours, so after-school clubs could be axed. Parents, guardians and childminders will have to sort out the childcare implications – and energy costs – themselves.
Postpone capital expenditure
As a catalyst for education spending, the outbreak of the pandemic was unrivalled. Virtually overnight, schools, colleges, MATs and universities were obliged to divert funds into communications equipment on a grand scale. New phone systems, computer equipment and conferencing kit were quickly signed off as essential expenditure. Anything else could wait.
So spare a thought for those institutions that still need to carry out building work, or facilities upgrades. Who is going to pay for that now? Over 20,000 state schools in England, Wales and Northern Ireland have to pay their own energy bills. Budgetary planning for other projects is going out of the window. (State schools in Scotland get a bit more protection because their bills are paid by the local authority).
Shorter days, bigger classes
The Government is firmly against a return to remote learning and teaching online. Nor does anyone in Education really want to go back to it, perhaps because some feel that students have already lost out, educationally and emotionally, because of COVID-19.
But can it be ruled out? After all, everyone is geared up now for working from home, or studying from home, so the obstacles against that transition have already been covered. Might some cash-strapped local authorities be tempted to set a lower temperature bar for school closures over the winter?
Alternative suggestions mooted include making the education day shorter, and cramming more students into a classroom at the same time. None of these ideas are likely to go down well. Schools contemplating such measures might have to brace themselves for some chilly conversations with parents.
The energy crisis will have a combined cost for Education running to hundreds of millions of pounds. For those who cannot rely on outside help, one further source may be parents themselves. The media is full of stories about schools and academy trusts facing deficits and energy ‘black holes’, with reports that some have already written to parents to outline the difficulties ahead.
Parents who think they already subsidise enough for their children may soon be asked to dig deeper into their pockets. The cost of free meals, books, music and PE equipment is often born by the school but perhaps not for much longer.
Nobody ever wants to think about cutting staff numbers; many schools would consider themselves to be running very tight operations already. Perhaps more so after the introduction of Microsoft Teams, video conferencing and cloud telephony in lockdown, all of led to both operational and financial efficiencies today.
With assurances of help from the government, it is hoped that schools will do everything they can to retain ancillary staff, part-timers and teaching assistants. A freeze on recruitment would be an obvious starting point. Some are deploying technology, such as visitor management systems installed at reception, to free up staff time and save having to take on new team members. Others may wish to consult with staff on more creative measures to avoid job cuts, such as short-term contracts, or revised hours of working, at least until costs are under better control.
HERE’S HOW TO MAKE SURE YOU GET THE BEST RATE
Check rates from over 20 energy suppliers with just one call
It’s still not entirely clear where things are heading but academic institutions with energy contracts to renew may need to act now. Wading through a shortlist of possible suppliers, and trying to make sense of broadly the same information presented in different ways, will have bursars pulling their hair out.
There’s no need to leave things to chance.
Fortunately some independent help is becoming available. Clarion, a leading Education tech solutions provider, has contracts with over 20 energy suppliers, ranging from the biggest players in the industry to the smallest operators, all keen to win new business in the Education sector.
Using specialist IT software, Clarion can monitor prices from all these energy suppliers in real time, helping schools secure the lowest available rates. Through its relationships with these energy companies, Clarion has also put forward to them the most common questions about energy from schools, and collated their responses into the latest best advice:
What if you are out of contract now?
If you are out of contract, then the government has advised you to set up a contract now. You will automatically have the appropriate reductions applied to your energy price for the duration of the scheme.
With the scheme, those on out of contract rates will only receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price. The amount of this Maximum Discount is likely to be around 40.5p/kWh for electricity and 11.5p/kWh for gas, subject to wholesale market developments.
What if you’re about to sign a new fixed price contract?
You should still sign a fixed-term contract now as the relevant price reduction will be automatically applied to your bill by your supplier. If you are sitting on the out of contract rates you will still get support from the scheme but will likely be paying more than if you are in a contract.
What if you are up for renewal after the scheme?
Energy rates for schools are not expected to fall until Summer 2025. If you are up for renewal after the scheme ends, then you should get in touch, and we can assess the market and recommend the best time to forward-purchase your next energy contract.
What if you signed before 1st April?
If you signed before the 1st April, you will have missed the cut off and not be eligible for the support scheme. This is because you would not have been exposed to the recent rises in wholesale prices, so you will not be eligible for support under the scheme.
Will I have to apply for the discount?
No, the discount will automatically be applied by the suppliers from November onwards. You will not need to do anything or contact your supplier to have this applied if you are eligible.
FREE ENERGY REVIEW FOR SCHOOLS
If you need some guidance on energy procurement, why not apply for a free, no-commitment Energy Review before making a decision? It will enable you to make a more informed decision and save you time trying to contact individual companies you may never have heard of.
With just a single call to Clarion today on 0333 222 6633, you can have current rates from the main energy providers to hand for comparison.