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The impact of rising energy costs on the education sector

16/06/2023

Insights

Rising energy costs are affecting us all, so it’s little surprise that nurseries, schools and colleges, with their large estates and limited budgets, are also struggling. 

On 1 April 2023, the government support available to schools was scaled back significantly and is now only available to schools and colleges paying the highest energy rates. So where does that leave the education sector? With warnings of inflated energy prices for some time to come and budgets already feeling the strain, something has to give.

How is the education sector being affected?

The energy crisis in education has seen bills in some schools and colleges rise by more than 100%. To put that into perspective, just a 1 penny increase on each utility for a typical secondary school using 800,000 kWh of gas and 600,000 kWh of electricity would cost an extra £14,000 a year, which is half a newly qualified teacher’s salary. 

As a result of the skyrocketing energy costs, money which could be spent on pupils is being used to inflate the profits of energy companies. And with budgets already stretched and no flexibility to reduce opening times, a knock-on effect on service levels is inevitable. 

This is coming in the form of cutbacks in teacher recruitment, a reduction in tutoring, fewer classroom materials and estates that are not being adequately maintained. These factors are contributing to a reduction in the overall quality of education in the UK.

What help is available?

The Energy Bill Relief Scheme ran for six months from 1 October 2022 until 31 March 2023. It reduced energy rates to £211 per MWh for electricity and £75 per MWh for gas. Although this relief was welcomed, it was only available to schools and colleges with fixed-price contracts that were agreed after 1 April 2022, as well as variable and flexible contracts.

On 1 April 2023, the new Energy Bills Discount Scheme was announced, which has much higher thresholds than the previous scheme. It is only available to schools and colleges paying above £302 per MWh for electricity and £107 for gas. That means only one in five of the schools surveyed last spring by the Department for Education are now eligible for support. 

What can schools do?

With budgets at breaking point and government support scaled back, nurseries, schools and colleges have had to take matters into their own hands. Education establishments are not guaranteed to stay afloat, and unless they act, poorer service and forced closures are potential outcomes. 

In the short term, schools should do what they can to buy their energy at the lowest possible price across their estates and reduce their energy consumption as much as they can. This can be achieved by:

  • Understanding current energy usage - Take steps to monitor and manage consumption. An energy audit is a good starting point.
  • Creating and implementing a plan to reduce consumption - Achievable and affordable ways to reduce energy consumption include setting timers for lighting and water and installing water-saving devices and lighting motion sensors.
  • Working to change the behaviours of students and staff - Encouraging good practice and integrating behaviours in the schools’ policy can help to reduce energy usage

In the longer term, schools and colleges should consider how they can make their buildings more energy efficient. This can be done through a variety of measures, such as improving the insulation of their buildings and installing energy-efficient lighting and appliances. Another step schools can take is to generate their own renewable energy through solar panels and wind. 

Every school must determine its energy efficiency priorities based on its age and location as well as other factors such as the maintenance and condition of its buildings. 

Things to be aware of during this time

With many nurseries, schools and colleges now feeling the squeeze, we’ve outlined some of the main issues to be aware of to keep your establishment on track. 

Understand your energy contract

Refusing to pay your energy bills is not an option as it could lead to additional fees, interest charges and even the termination of your contract. If you’re struggling to make a payment, contact your supplier to discuss options for a payment plan. It’s also worth reviewing your contract to understand the penalties for late payments. 

Price hikes from other suppliers

You may not be able to do much about your energy prices, but make sure other suppliers aren’t needlessly pushing up their prices. Check your contracts to see if price rises are lawful and always shop around to get the best rates.

Get all the support you can

Make sure you are aware of and apply for all the financial support that’s available, including the Energy Bills Discount Scheme as well as grants from the government and other organisations. 

Increasing energy efficiency across the education sector

At Eddisons, we can boost the energy efficiency of your estates by helping you secure Condition Improvement Funding and T-Level Capital Funding. We can also help you spend your School Condition Allocation in the most effective way. Find out more about our education sector services and get in touch with our team. 

Get in touch with the Eddisons team

Please contact us for more details and information

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