Cost of Living Crisis Pushing Schools To Brink

Cost of Living Crisis Pushing Schools To Brink

Schools are allocating more of their budgets to cover energy costs, with Government support falling short on providing certainty, Sian Norris reports

Schools are having to allocate more money from already squeezed budgets in order to meet increased energy costs, the Byline Times can reveal, as the Government is warned 90% of schools could run out of money in the next year. 

Freedom of information requests sent to a representative sample of multi-academy trusts by the Byline Intelligence Team found that nearly all had seen their energy bills rise between 2020-21, and 2021/22 – even before the energy prices rose in October. 

Some trusts warned that the increases were a result of acquiring new schools, and the re-opening of schools following Coronavirus lockdowns. 

Many of the bill increases were high enough to suggest that trusts are seeing budgets squeezed as energy prices rise. Some trusts were seeing bills increase by more than £100,000 between 2020/21 and 2021/22, with one trust reporting a £500,000 rise. 

Paul Whiteman, General Secretary of school leaders’ union National Association of Head Teachers (NAHT), told Byline Times: “Everyone is feeling the impact of rising energy costs right now, but for schools the increases we’re hearing about are extreme. Some of our members have reported 500% rises, the equivalent of several members of staff. This kind of additional un-budgeted cost is just unfeasible – and while the Government has announced some support to help support schools with energy bills, it’s not enough to solve the crisis”.

The Government announced a package of support to help schools manage energy costs. Its Energy Relief Scheme provides a discount on wholesale gas and electricity prices for all non-domestic customers, including schools. It has overall provided £37 billion in support, targeted towards vulnerable households in need. 

But Whiteman warns that the six-month cap creates uncertainty for the future. “Schools haven’t been given any certainty on costs beyond six months – schools budget for the whole school year, six months doesn’t really solve things for them when they have no idea what will be facing them in the Spring term,” he said.

But even with the six-month energy price cap, Rev Steve Chalke – who heads up the Oasis foundation which runs 52 academies – told The Observer that electricity and gas costs for individual schools in his chain had rocketed from £26,000 a year to £89,000.

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A Wider Crisis

State schools were already struggling to make ends meet following a decade of austerity, an “unfunded” increase in the teacher pay award that has left them facing budget deficits of tens of thousands of pounds next year, and crumbling infrastructure. 

According to early results from a survey by the National Association of Head Teachers, published in the The Observer on 23 October, half of heads said their budgets would be in deficit this year, with nine in 10 schools running out of money by next year. Core school funding is increasing by £4 billion this year compared to 2021-22.

“Energy bills are only one of the massive cost pressures facing schools this term,” said Whiteman. “Schools are currently under unprecedented financial pressure due to the cost of living and the Government’s continued under-funding of education”.

School spending per pupil in England fell by 9% in real terms between 2009/10 and 2019/20, the largest cut in over 40 years. This cut has come as schools fall into alarming disrepair: of 20,000 school buildings inspected between 2017 and 2019, more than 19,000 had at least one building component that had “major defects” or was “not operating as intended”. Government plans to provide £1 billion “state of the art” repairs across 61 schools were called “a drop in the ocean” by the National Education Union.

In contrast, private schools have seen their wealth increase. The Byline Intelligence Team has previously revealed that the top nine public schools in England increased their assets by 44% or almost £600 million in the past six years. The total consolidated assets (minus liabilities) of the nine schools rose from £1.36 billion to £1.96 billion between 2015 and 2020, the research found. The UK’s 1,300 private schools benefit from tax exemptions worth £3 billion every year.

Now, the Government has signalled a continuation of austerity, with Chancellor Jeremy Hunt expected to announce that all departments will have to make cuts when he announces the Government’s debt reduction plan on 31 October. This has raised concerns that schools will need to make further savings. 

“Spiralling energy bills, inflationary costs, and lack of funding for teachers’ pay this year means thousands of schools are predicting going into deficit,” Whiteman told Byline Times. “Consequently, school leaders are being forced to make cuts that ultimately cannot help but negatively impact on the education and wellbeing of children”.

“The Government needs to do more to ease the impact of the cost-of-living crisis on schools, for children’s sake,” he added. “It is only right that public funds allocated to schools are actually spent on children and education, not topping-up energy firms’ profits”.

A Department for Education spokesperson said: “We understand that schools – much like wider society – are facing cost pressures which is why we are providing schools with £53.8 billion this year in core funding, including a cash increase of £4 billion. All schools will benefit from the Energy Bill Relief Scheme, reducing how much they need to spend on their energy and giving them greater certainty over their budgets over the winter months. We are also providing schools with tools and information to help get the best value for money from their resources”.

The Department for Education also advised that, where schools are in serious financial difficulty, they should contact their local authority or ESFA.