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Another huge rise in the energy price cap. Now what?

As Ofgem announces a record new high for the energy price cap while ministers go missing, Jim Dickinson considers the kind of local leadership required to get students through the winter
This article is more than 1 year old

Jim is an Associate Editor at Wonkhe

The energy price cap is going to rise by 80 percent to £3,549 per year in October. And it will go up again in January.

Energy regulator Ofgem has announced that average household bills for customers on standard variable or default contracts who pay by direct debit will rise £1,578 from £1,971 this autumn.

Underpinning that is a set of costs to energy suppliers (distinct from the energy extractors and generators) that continue to go through the roof.

As it stands, those costs are not capped for businesses – who feed, supply and employ students – and it’s not as if the crisis won’t impact staff either.

Put simply, there is a huge and unavoidable problem coming for anyone who lives in a house, and pretty big problems given knock-ons for everyone else.

So what happens next for students and the sector?

Winter is coming

On household energy bills, there are now two sets of two options for politicians – reduce everyone’s bills, or target bill reductions – and pay for what they do from future taxpayers (ie borrowing) or windfall taxes.

On the first set of choices, I worry that neither Sunak nor Truss will go with further universal bill reductions/caps/grants – partly because I just think that’s the instinct, and partly because they don’t want to be seen to be copying Keir Starmer.

Meanwhile, targeting the help via “handouts” is a miserable option – because I’m not at all sure they would make that solution student-inclusive.

They could create social energy tariffs – but they’d need to get a wriggle on, and again there’s a danger that students somehow get left out again.

Even if we get help to students who are directly impacted by energy costs, I worry there’s no extra help for other rising costs, especially in the context of the part time work issue.

And as long as the underpinning government assumption is that students are to be looked after by parents, the state will fail independent students and forget that those with parents or guardians will be facing their own rocketing costs.

Commuter students living with parents whose parents are finding it tough are at particular risk. And for those whose family rents, or those away from home, rent seems to be going up everywhere to cushion landlords from the cost of living crisis – rather than eating into the value of their investments, they are literally using rent to pass the cost of living crisis onto their tenants.

And so you end up with students in rented accommodation being really quite vulnerable.

Need to know needs

It’s been repeatedly contested over the years, and I’m bastardising what Abraham Maslow was getting at bit here, but higher education spends quite a bit of time talking about self-actualisation via teaching and learning.

It has also got quite far in recent years talking about esteem and the role that other students, academics and professional services staff play in developing and boosting it.

The sector has even, over the past couple of years, started talking about love and belonging, the way it underpins learning and growth, and the role universities can play in it. It has also started to talk about safety in the context of things like race and racism and sexual misconduct.

But I’m afraid universities might have to go deeper. Because, without being alarmist, students can’t get to the top four levels unless their biological requirements for survival are met. Or put another way, students can’t learn when they’re cold or hungry or both.

No crisis here

So what is to be done by universities? The deep, centrifugal tendency of the higher education sector to frame problems as simplistically tame or wickedly complex will never stop amazing me.

In the former, however scary or unfamiliar or vast, university culture is desperate to believe that problems can be addressed by existing people, processes, meetings and budgets.

Surely someone has already fixed this, goes the reasoning, knowing that even the best best practice case studies often turn out to be chimeras that look good on open days but would fail due diligence if anyone was investing their own money in them.

In the latter, universities can bury the issue in endless working groups while arguing about the cause of the problem, what fixing it would look like, whether the sector can have any influence over it and whether it’s even a problem anyway. “More research is needed” will be the conclusion, because like student numbers, it always is, isn’t it.

As long as the sector doesn’t frame a problem as a crisis, everything will be alright. If you’re running a gaff with endless crises, you look weak in front of the governors or a place that it’s best not to send students to. And you have to make actual changes to people, processes, meetings and budgets. After all, once you admit there’s a crisis, you can’t not act, and you also can’t fail.

And anyway, you tell yourself, as the room gets warmer and the soot hits the back of your throat, it might not be a proper fire anyway. Best not to worry everyone – best to pretend it’s under control.

Even in the early part of the pandemic, when Gold Command was meeting daily, the desire to get back to tame as soon as possible was overwhelming. And in truth, even though it felt like a “big pivot”, universities did go tame quite quickly – largely the same people in the same roles with the same budgets were asked to do what they do on the internet rather than in person.

Only now, really, is the sector getting to the wicked problems of long term mental health and meaningful student engagement when it switched to blended learning. The danger is that when we avoid “critical”, we act too late and not enough people respond. And the danger in avoiding “wicked” is that not enough is done to understand.

Let’s go round again

This all matters because I have a bad feeling that right now, the sector’s response to the cost of living crisis all feels a bit tame again, with occasional flashes of critical when flicking through the 101 ways to get costs down list:

Jim, we looked at your list, and 41 of them would be too expensive, 35 too hard to do in time, 10 we’ll see if the SU is already doing them, 8 we’ll see if any of the summer interns can take them on, and six aren’t really the sort of thing a university like us should do anyway. But thanks! We’ve asked the comms intern to write a post about jumpers.

Remember the summer of 2020 when universities spent ages thinking about what they do and not enough time thinking about students’ lives, when providers ended up asking students to pay to be imprisoned in lonely landlocked cruise ships for a year? Can that be avoided that this time? Are there ways to listen, understand, develop scenarios and prepare?

Here’s some examples of what I might mean having spent the summer talking to SU officers about their lives.

Thinking about things

It looks for now like university and private halls aren’t impacted – at least in the short term – as they’ve already sorted their energy costs. Who knows how long that lasts for different operators, but we probably need to know.

There are also big problems coming for small businesses. Without an intervention vast numbers of small restaurants, cafes, bars and takeaways will go. These are the sorts of places that employ students – especially international students.

Without part time employment income tens of thousands of international students – who are increasingly not as “rich” as previously and/or from poorer countries/economies – simply won’t be able to afford to live here, let alone pay the fee(s). A good sense of the local labour market would help.

The other thing about part time work is that in many cities students work for each other. Well off ones drink VKs, while others serve them the VKs. If the former go out less often and have to pay more, the work for the latter will be less plentiful and more punishing. Do universities know how many of their students work, and the hours they work, and so on?

One option is to encourage students to use less energy. But unless they do (genuinely) all inclusive bills, there are no incentives on landlords to improve insulation. And using less for both those on “all inclusive” and those who aren’t could just mean being really cold – which is not acceptable really. So best not advise that.

Students in joint energy contracts may end up falling out – in a big way – if one of them is cavalier and another just can’t afford their share of the payment. Landlords with “all inclusive” deals will be trying to cancel them or vary them, threatening eviction if students don’t agree. In other cases students will just have to choose to live in very cold houses.

Where a landlord accepts that the all inclusive bills deal they’ve signed a year ago has to stick, I don’t think we’ve priced in quite how evil they’ll get over finding ways to get those bills down.

As a result, every student officer I’ve spoken to this summer thinks campus usage will increase, not decrease. Libraries will need more security on and places to nap, rather than closure at 10pm. We’ll need more chairs. Everywhere.

Much more socialising will happen in unsupervised and unlicensed settings. Students need a major focus on safety, bystander intervention and student self-regulation in that context.

The point about all this is that in the absence of real additional resource, universities will need to challenge preconceptions, predict and model changes in student behaviour, and respond quickly, decisively and totally – causing all parts of a university to consider their response, rather than assume it’s someone else’s job.

That should also involve supporting the SU to gather, synthesise and present the as-close-to-real-time as possible lived experiences of students with a breadth and intensity not previously seen. It’s important that the SU is supported to do it. Many of the changes in behaviour will be accompanied by shame or immigration concerns that will exacerbate students avoiding talking to “authority” figures.

It would help if universities really understood the financial situation of their students. Nationally, I find it hard to believe that the Department for Education (DfE) and the Welsh Government haven’t at least been given some toplines from NatCen on the Student Income and Expenditure Survey they’ve been running. If ministers have one, can we all see it? If not, why not?

At provider level, universities need SLC data that profiles the residual household income of the people about to join HE. At programme level, universities need to know the financial plight of those that won’t be in our lectures. It will help those working with students understand and act.

And then what should be done?

Once the sector understands, it’s 100 little things that will matter. When this story broke about that bill splitting company yanking prices up, did a university legal team swing in to help? I doubt it.

Students need lots more microwaves on campus. The sector needs to know what Aramark and Sodexho will do when their prices double but their turnover collapses.

There should be far more (hot) showers on campus, or to make those that are there available.

Being cold, let’s not forget, is right down at the bottom of Maslow. It needs to take precedence.

Someone said to me the other day that they think that students with kids will start cutting back on childcare. Enabling them to not come to campus doesn’t really help unless everyone wants them ignoring those kids while they read or write essays. Don’t universities need to be at least considering souped up creches and half term clubs?

Someone else pointed out that the prospect of more students, especially international, in dodgier corners of the labour market is a potential problem. have we got a plan to help avoid them being exploited?

For plenty of families the student in the household will be expected to stop studying and help with tasks, caring resps, bringing in income, and being less of a drain on the family budget. What will our attitude to that be?

The sector doesn’t traditionally think of a student presenting with money worries or impacts as something that is a viable excuse for mitigating circumstances because that is regarded that as something they should have predicted and be able to manage. Are universities going to hold that position in the year ahead?

I’m still finding universities that haven’t got plans for a food bank or think having one will damage their reputation. Why, from a student safety POV, did the sector think 10,000 arrows on the floor was important two years – ago but a food bank isn’t now?

In this study, the most prevalent coping strategies for food insecurity included applying for a loan or bursary, seeking employment or working more hours, and purchasing food using a credit card. For all the endless circular debates about whether student debt is real debt, do universities have decent data on the amount of real commercial debt students have and the impacts that has on them as students and graduates?

What crisis?

Is the HE sector on the precipice of a miserable term and a proper crisis? Maybe it won’t be as bad as I think it could be. Maybe something will turn up. Maybe the government will step in. I lived on beans in my day and it never did me any harm. And so on.

But maybe it’s real, maybe we’re already in the early stages of the car crash and maybe university leadership is there to find a way to steer out. And when I say leadership, I mean everyone – not just those on the big bucks.

The scale of the challenge potentially needs the sort of response and leadership seen during Covid – not the half arsed, fingers crossed, something will come along, tell them to get an NUS card stuff that some universities aren’t doing anyway in case it puts people off from phoning the clearing hotline or enrolling and staying beyond the fee liability cut off date.

If there was ever an example of “let’s treat this year like last year and the year before and the year before that”, here you are. The successor body to Public Health England press releasing its big worry re student health – meningitis. Don’t get me wrong. It’s a nasty and in some cases fatal disease. But this winter I’d be more worried about students and scurvy, anaemia, rickets and frostbite.

The other day, a proper journalist asked me if the sector is ready for what’s coming. I pointed out that it wasn’t in September 2020 or 2021, and in those years the government had told them to be. Maybe I’m being unfair and Andrea Jenkyns has been holding a “cost of living” version of the Covid HE taskforce. See also unicorns, fairies, Father Christmas, Ferris Bueller 2 and DfE’s mental health transitions strategy. And maybe Gold Command has been reformed across the sector – but outside of notable examples, I’d know by now I think.

Even then the danger would be a focus on “action”. For me, rapidly addressing Cost of Living as a solvable Wicked Problem is the thing that needs to happen now. That’s first about accepting it is a problem, in public. And then it’s about listening, understanding, hypothesising and ultimately both thinking deeply and acting decisively – it’s about action learning.

An OU study has found that a fifth of those polled are rethinking their plans to go to university. As I’ve argued previously, I don’t think this will happen. I think instead students will hang on in there for their dreams. But the health, attainment and social capital of the hardest hit will suffer.

The question is whether the self-narrative the sector has about students at the centre is real. It’s about whether it really talks to them, understand what’s about to happen to them, and whether it has a credible plan to pick the issues up as they unfurl.

2 responses to “Another huge rise in the energy price cap. Now what?

  1. Libraries are about to become friction points.

    So the core idea of “more chairs” in libraries sounds a good one except… something nobody talks publicly about but they do privately is many libraries already have anti-social behaviour problems that nobody is sure how to solve.

    An example in my own University is we have a nice new study area… Except because it is its own seperate area it has been turned into a social area by a particular group of students for gambling and other activities. No students outside this group go in there – it’s a no-go area.

    We know it, the students know it nobody can work out how to prevent it.

    In a cold hard winter you are absolutely right students are going to pack into the library but you are going to have flashpoints where students who want to study feel they are being displaced by students who just want to hang out.

    A knotty problem.

  2. A lot of this makes sense and is spot on, so I won’t follow up on that. Government and providers clearly need to get their sodding acts together.

    What I will pick up on is quite common on here. SUs are pivoted as a vital part of a solution. To some extents that’s right, in fact in most ways it is.

    But I’d argue at the moment most of them are behaving very much as part of the problem. I work with the sector on a regular basis and it’s just depressing how little attention a lot are giving to this. The rinse and repeat approach seems fine for most. It’s all course rep election planning, freshers week, black history month events and the usual. All vital but just… not now? A quick cursory glance at their websites and social media shows that most aren’t even mentioning this. Most are still hawking freshers tickets, making out that making the most of welcome is the be all and end all. One £3m+ a year block grant SU in Yorkshire only has to offer some poorly written blogs and a huge push on new students to buy merch. It’s pathetic and a big push for improvement, and education needs to happen. The business as usual culture permeating everything is too much.

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