Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the potential merits of establishing a national energy contract for the school sector.

The department has assessed the potential benefits of establishing a national energy contract for the schools sector. We did this because many schools had been impacted when the war in Ukraine pushed prices to an all-time high in September 2022. Many had energy contracts due to be renewed at the time and ended up locked into long-term, fixed price contracts at peak prices. We recognised this would seriously impact future budgets.

The department undertook research to understand the energy options available to schools, the challenges and complexities faced and how we could help.

The research showed schools experienced difficulty in determining whether they had received a good deal, relying on brokers to get a better rate from energy providers than they could directly and frequently being expected to make quick decisions on energy deal proposals. Furthermore, the volatility of energy prices meant schools were often locked into expensive energy contracts which were hard to exit.

The three key objectives of the pilot were to simplify the buying of energy, reduce risk, and secure best value for schools.

During the pilot, the department identified if those benchmarked had used Crown Commercial Service’s V30 energy contract, mandated for central government, they would have saved an average of 36% on energy costs. This contract is flexibly priced, rather than fixed: some of the energy is bought up front, during the 30 months prior to delivery and also during the delivery period itself. This helps level out the peaks and troughs in market price variances.

The service also offers wrap around contract management and simplifies the energy buying process for schools, reducing administrative and time burdens.