Schools have been hit with a utilities bill of more than £2m as a result of Liverpool Council’s energy contract blunder this summer.
Earlier this year, a catalogue of errors at the Cunard Building led to millions of pounds being added to the local authority’s energy bill. Council leaders were not informed that the electricity provider it was dealing with had withdrawn from the commercial market, leading to the council - and other city institutions including schools and the fire service - being placed on a far more expensive contract.
The impact of that mix-up on the schools maintained across the city was revealed at a meeting of the local authority ’s education and skills committee this evening. Cllr Tom Logan, cabinet member, said the political aspiration had always been there to protect schools and said a “mistake had been made that may have cost schools money.”
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He said calculations had been made that determined that the additional amount faced by city schools now stood at £2.2m. The council has identified where that money will come from to help pay the shortfall and is working with the Department for Education to find a legal method to get it to classrooms as quickly as possible.
The issue of how schools would be impacted by the costly error has dogged the council since it was revealed in May. Three months ago, school leaders said they were “snookered” by the Cunard administration foul up while Gareth Jones, headteacher of Gateacre School told a meeting of the Liverpool Schools Forum his school’s gross energy bill had gone up from £47,000 to £312,000 and its cash flow had been “diminished.”
Lee Kinder, Liverpool Council assistant director of asset management, was named in an independent report by accountancy firm Mazars as the individual responsible for not informing the council’s cabinet of Scottish Power’s decision to temporarily close its trade desks, which ultimately led to the move to a more expensive tariff. Mr Kinder told school officials in September that decision earlier this year was “extraordinary” and Liverpool Council was placed onto the more expensive rate between May 1 and June 12 before securing new terms with Crown Commercial Services.
Addressing councillors this evening, Cllr Logan said the council working to get the money to schools was “good indication that the political will is there” but it “isn’t easy to get the money across.” The cabinet member added that he wasn’t able to provide a timeline for the funding but officials had been “constantly asking” the Department for Education for further information.
Cllr Logan said Theresa Grant, interim chief executive, and Ian Duncan, interim finance director had been working with the city’s legal department to get the financing sorted. The figure of £2.2m is lower than the original £2.8m estimate made by Mayor Joanne Anderson at a joint meeting of the finance and resources and mayoral and performance select committees last month to discuss the council’s £72m budget shortfall.
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