Liverpool schools hit by multi-million pound bills due to council energy blunder

Local schools have been hit with a utilities bill of £2.2m as a result of Liverpool Council’s energy contract blunder this summer.

Revealed at a meeting of the local authority’s education and skills committee, the council’s error has lead to massive finanical cost for schools maintained across the city. Cllr Tom Logan said the political aspiration had always been there to protect schools and said a “mistake had been made that may have cost schools money.”

What is the energy contract failure?

Earlier this year, it was revealed that Liverpool City Council failed to properly extend their energy contract, leading to the council – and other city institutions including schools and the fire service – being placed on a far more expensive contract.

The investigation by accountants Mazars, discovered that a Cabinet report requesting approval to extend Liverpool’s energy contract was not given to the Mayor and Cabinet until after Scottish Power withdrew from the commerical trading market, causing them to have to find an alternative supplier.

The Mazars report showed no evidence of malpractice, however, the error critically affects the city’s schools and Merseyside Fire and Rescue Service, who all have to pay their energy bills on the same contract.

The report identified gaps in the council’s own audit process, criticised individual decision making and accused the authority of failing to learn lessons from previous contract renewals.

Last year, the government appointed commissioners to oversee the council, following investigations into the previous Mayor, Joe Anderson and his involvement in building contracts.

Since then, the Government has taken the decision to step in and take effective full control of Liverpool City Council, following the publication of a second commissioners’ report into the local authority. The Department for Levelling Up, Housing and Communities, recommended that the Government take over all financial, governance and recruitment power held by LCC.

What has been said?

Addressing councillors on December 13, Cllr Logan said the council has worked out where the £2.2m will come from, to help schools pay the extra cost.

He said working to get money to schools was a “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.