NHS ‘faces £2.3billion energy cost shortfall’

The NHS faces a “severe” budget shortfall of £2.3billion because of rapidly escalating energy costs, it was claimed today. While the growing costs of care for the elderly have dominated […]

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By Vicky Ellis

The NHS faces a “severe” budget shortfall of £2.3billion because of rapidly escalating energy costs, it was claimed today.

While the growing costs of care for the elderly have dominated recent headlines, behind the scenes there could well be another struggle with rocketing energy inflation.

Hospitals are very energy intensive, with processes like imaging, radiology and sterilisation as essential as reliable heating, lighting, ventilation, laundry, catering and hot water supply.

Energy procurement consultancy Power Efficiency – which is owned by UK building giant Balfour Beatty – has calculated NHS hospitals around the country could see millions of pounds added to bills over the next decade.

London trusts could see an enormous rise of £436million in energy costs by 2021 and regional budgets could also be battered.

The North West could face £334mworth of extra energy costs, Yorkshire & Humber could see £242m added to their bills while the West Midlands walloped with £247m, warn the consultants.

Hospital managers must begin cutting their energy use now suggests the firm in a report called ‘NHS Hospitals and the Energy Hike’. It outlines a ten point plan including setting up a baseline energy use, linking energy buying with demand management, looking at alternative energy sources and making use of temporary or emergency power sources.

But where large corporations have more ready cash to splash on efficiency measures, public service budgets under pressure because of the Coalition’s deficit-cutting demands have less room for manoeuvre.

Bobby Collinson, Managing Director at Power Efficiency said: “If unaddressed, the rise in energy costs is obviously going to have a severe impact on hospital budgets and this will, in turn, present a drain on resources for the provision of frontline services and patient care over the next decade. We recognise that hospital trusts do not necessarily have the budget to commit to energy-saving programmes in the current climate, so imaginative solutions will need to be looked at to avoid this trap.”

If hospital managers adopt energy management techniques, they could “realistically” cut between 20–30% of their energy use, added the firm. In total, the NHS could save between £198 million and £297 million a year by 2021 – enough to employ up to 2,700 consultants or 10,450 nurses at today’s pay rates.

Energy and fuel costs the NHS almost £600 million every year according to the Department of Health. In December 2012, Health Minister Dr Dan Poulter pledged £50 million for efficiency projects in hospitals, meant to save the NHS £12.5 million a year.

At the time the minister said: “Saving money on fuel and energy bills means more money for the NHS to spend on front line patient care”.