School Budgets and Energy Bills – A Looming Crisis

Posted in : Cassidy's Comments on 21 April 2022
Frank Cassidy
Former Principal & Regional Officer of ASCL
Issues covered: Education; Cost Living; School Budgets

As we come to terms with the harsh new realities of the higher cost of living and the effect on our household budgets, spare a thought for school leaders who must grapple with similar pressures on a much bigger scale.

The Association of School and College Leaders Business Leadership Specialist Hayley Dunn has flagged up the looming new crisis, pointing to the fact that The Labour Party at Westminster is deeply concerned about how spiralling energy costs will further squeeze school and college budgets. These concerns add to an already bleak picture caused by general inflation, unfunded pay awards which must be paid from existing allocations and the fact that school budgets have not kept pace with inflation in real terms over the last decade. She summarises by saying;

“Education leaders are used to having to make difficult decisions on spending in order to remain financially stable. That was happening well before the current energy crisis and the grave state of the gas and electricity markets will be creating greater uncertainty. The Department for Education has thus far shown a flagrant disregard for the genuine concerns school and college business leaders have about the significant price rises they are facing, downplaying energy costs as a small part of overall budgets. They may have been in the past but some schools and colleges are reporting bills that have doubled in recent months, with the very real prospect of them increasing further in the near future.”
ASCL - ASCL comment on Labour claim that school energy bills doubled last year

An additional financial problem is the urgent need for the upgrading of expensive to maintain, crumbling school buildings, many of which date from the 1960s and which are often very inefficient in terms of heat retention and are inappropriate settings in which pupils and teachers should spend their days.

UTV recently reported on an apparent good news story where the outgoing Education Minister Ms McIlveen  announced a spending drive under the major capital works programme where twenty eight Northern Ireland schools are to benefit from a £800million renovation fund. A 'major work' is defined by The Department of Education as a capital project that costs in excess of £500,000. This could be a new school building, the renovation of an old building, or construction of a new school building to allow for an amalgamation of two or more existing schools. She warned however that the projects could be a number of years out and would not be completed until the end of this decade at the earliest.

School leaders desperate to improve costly, inadequate, sub-standard accommodation will be only too aware of the administrative steeplechase which has to be run to secure funding from The Department and the seemingly endless lead in times for work to happen. Responding to UTV's enquiries about the breakdown of the Major Capital Works programme for individual schools, a spokesperson for the Department of Education said:

“It is important to note that these figures are broad initial estimates at today’s prices of potential construction costs only, and they do not include inflation, site costs, professional fees or VAT."
How much each school will get out of £800m Northern Ireland funding pot | UTV | ITV News

Anyone who is currently undertaking work on their own house will be aware of the uncontrolled price rises in materials caused by supply chain problems worldwide and the transport issues around getting building materials from abroad due to a combination of Brexit factors, Ukraine, pandemic impacts on global trade and most recently fuel price rises. All of these factors will make the twenty-eight capital projects mentioned substantially more expensive than the initial costings currently indicate.

The allocation which Education got from the Executive budget share out in the recent October monitoring round  was  £9.2m in day-to-day resource funding - mainly for special educational needs (SEN) pressures - and £11.5m in capital funding while Health received about £200m of extra money. This capital funding included £8m for "minor works" to schools - which is used to pay for essential repairs for school buildings. However, when reporting to the Assembly Education Committee a DE official, Seamus Gallagher, told MLAs that much more money was needed.

"In terms of the state of the school’s estate, we could probably spend £500m on the school estate every year and still spend 10 years bringing it up to where we would like it to be," he said.

"But we're constrained by budget and then have to allocate money in priority order where it's most required."

This underlines the scale of the problem which schools are facing. At the same committee hearing the committee's chairman, Alliance MLA Chris Lyttle, asked The D E Director of Finance,  Gary Fair about the Institute for Fiscal Studies (IFS) report's conclusions that pupils in Northern Ireland had less spent per head on their education than elsewhere in the UK.

"Do pupils in Northern Ireland get less spent on them in education than the rest of these islands?" Mr Lyttle asked.

"The figures would seem to indicate that, yes," replied Mr Fair

Those of us who have served in Northern Ireland schools will have long been aware of the disparity of per head pupil funding between here are the rest of the UK, yet our schools continue to deliver excellent education by comparison. The shortfall is sometimes blamed on our over- provision which is a product of the multiplicity of sectors in our education system and the fact that DE has to fund more schools than a population our size would normally warrant. Add to that the rurality factor caused by the number of small schools serving rural communities and the high cost of free school transport and the reason for the high price of our education becomes apparent.

 So given our already fragile finances the new pressures from heating bills, inevitable wage rises and the rise in all the costs which households are already feeling, the future for school finances looks dire indeed.

This article is correct at 21/04/2022

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Frank Cassidy
Former Principal & Regional Officer of ASCL

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