The cost of powering the Public Sector

Research carried out by leading energy consultancy Energy Management LLP has revealed that NHS Trusts spend an estimated half-a-billion pounds on gas and electricity.

Powering the public sector is a costly business.

Keeping offices, hospital wards, classrooms and leisure centres heated, lit, ventilated and air conditioned can be a major drain on finances.

And information obtained under the Freedom of Information act by Energy Management LLP, one of the country’s leading energy and water management consultancies, has revealed the true extent of the cost in some of these key sectors.

Of the 237 NHS Trusts contacted by Energy Management, 64 percent responded with their estimated annual energy consumption figures for both gas and electricity across all their sites coupled with the financial cost.

The combined total spent on energy for the financial year up to 2017 was an eye-watering £375 million. If you take the average amount per Trust and apply it across the board to all 237 Trusts, the figure would pass through the half-a-billion mark.

Unsurprisingly Barts Health, the largest NHS Trust in the country with a turnover of over £1.4 billion and a workforce of 16,000, topped the energy spend table with an estimated 12.6 million. Manchester University NHS Foundation Trust, with 76 hospitals and clinics, came a close second with £11.4 million.

For Councils too, many of whom are under severe financial pressure, energy accounts for a large proportion of their overall spend. Taking England, Scotland and Wales into consideration, the overall combined spend of 23 Councils (out of 79) that responded was an estimated £93.6 million. In Nottinghamshire County Council alone, £4 million was spent on electricity in 2016/17 for street lighting, signs and signals.

Compliance

Increasingly there is a need for public sector organisations to lower energy bills, hedge against future volatility and adopt measures that help comply with green energy legislation.

Decarbonisation and government taxes and levies (third-party costs) now account for the majority share of energy bills (over 60% and rising), placing as much emphasis on energy efficiency as procurement. The phrase ‘the cheapest unit of energy is the one you never use’ is well-liked at Energy Management LLP for good reason.

For many organisations, time poverty means that managing the work required to reduce their energy consumption is an undesirable distraction from their day-to-day core activities. To further compound this, there may also be a lack of energy expertise and distinct skills gap creating barriers to finding savings and implementing reduction initiatives. This is where a reputable energy management consultancy can step in to remove these barriers and ease the way forward to achieve effective reductions.

It has never been more important to understand and control your energy costs and our bespoke energy management portal, EM-Powered, enables customers to do that. If you would like more information on EM-Powered and its wide range of features and benefits, please get in touch with Ian Scattergood on 01225 867722 or email is@energymanagementltd.com