To ask His Majesty's Government what assessment they have made of the effect of rising energy costs on college budgets.
5 January 2023
The department knows that alongside pay and inflationary pressures, one of the biggest challenges facing some colleges is the rising cost of energy. We are keeping under review the potential impacts of the rising cost of energy on providers across the department’s remit.
Colleges are autonomous institutions responsible for their own financial sustainability and are taking actions to respond to inflationary pressures, for example through reducing energy consumption.
The Department for Business, Energy and Industrial Strategy has outlined the range of support on energy cost increases that will be available for businesses, the public sector and households. As part of that, the Energy Bill Relief Scheme will provide a price reduction to ensure that all businesses and other non-domestic customers, including colleges, are protected from excessively high energy bills over this winter. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023.
Schools and colleges in England will also be allocated a share of £500 million in capital funding in the 2022/23 financial year (this comprises £447 million for schools and sixth form colleges and £53 million for further education colleges) to spend on energy efficiency upgrades.
This will not only help schools and colleges save money, but it will also make them more energy efficient during the cold period and increase winter resilience for future years. A further education college group will receive £290,000 on average from that additional funding. Allocations were published on 6 December 2022 to help colleges plan and payments are expected to be made in January 2023.
The department is investing £3.8 billion more in further education and skills over the Parliament as a whole to ensure people can access high-quality training and education that leads to good jobs, addresses skills gaps, boosts productivity and supports levelling up. This will support the sector to reform and deliver the technical, skilled education that employers want and our economy needs.
As set out in the department publication, ‘College oversight: support and intervention’, we assess and review colleges’ financial health on a regular basis and use this information to determine where support and intervention from the department, Education and Skills Funding Agency and Further Education Commissioner can help colleges to improve their position. The publication is available at: https://www.gov.uk/government/publications/college-oversight-support-and-intervention.