Consider the state of the UK public sector for a moment. If you believe everything you read in the media, we are facing overcrowding in A&E, cuts to education, a £2bn budget shortfall in the NHS, reductions in local authorities’ services, and services under unprecedented pressure – it all sounds pretty grim. Politicians throw up their hands in despair, and people point fingers in hopes of finding something or someone to blame. It is certainly true that public sector workers are feeling the pressure of salary freezes while being asked to do more every day.
What solutions are available? Unsurprisingly, many public sector organisations have taken the difficult (but relatively quick return) solution of making cuts – budgets, staffing and services are all experiencing cost reduction. This has a significant impact on those who are supported and protected by these services, including the most vulnerable in our society.
There is an alternative. What if we could take some of the sting out of the cuts while enhancing the public sector’s financial resilience, if we could reduce financial pressures while improving services and reducing their impact on the environment? This is precisely what a number of public sector organisations, led by the NHS, are doing through innovative sustainability programmes.
Sustainability programmes must adapt to and support the delivery of their organisations’ business and strategic objectives. For example, at Essentia, we are working with Guy’s and St Thomas’ NHS Foundation Trust to develop a portfolio of energy efficiency works that will ensure the Trust achieves its required carbon reduction targets and saves over £1.3 million each year, as well as improving collaboration across its £1 billion capital development programme. Through the energy savings programme, the capital development team is empowered to ensure projects consider energy management, and works across projects to rationalise equipment and make sure the Trust estate can adapt to future service needs.
Energy performance contracts (EPCs) can be attractive vehicles for delivering significant benefits to any sustainability programme. An EPC is a partnership with an energy savings company (ESCo) that enables public sector organisations to improve the energy efficiency of their buildings and facilities, delivering real and longstanding savings for public services. The contract guarantees that the measures implemented by the ESCo will generate sufficient savings to pay for the projects, and all savings accrue to the client. With little risk and an average energy saving of 14%, the NHS alone could save over £100m by implementing strategic energy and utility reducing programmes, enough to employ nearly 3,000 nurses.
By putting together a strategic plan that delivers a range of projects, EPCs can blend the “quick wins” with those that add value, but perhaps do not have the necessary defined paybacks. Thus, public sector organisations can achieve a programme of investment that delivers true and lasting value to the organisation.
Addressing utility consumption, typically the second highest overhead cost in the public sector after staff cost, presents an excellent opportunity to tackle finances and minimise the loss of valuable front-line employees. Forward-thinking organisations know that reducing spend on energy, water and waste is no longer a ‘nice to do’ but something which makes good financial as well as environmental sense. On its own, it might not amount to much, but taken as part of a long-term sustainability programme, perhaps combined with an EPC, it will go a long way to alleviating the cost pressures in the system – and minimise the need to make cuts.
Alexandra Hammond, Associate Director, Sustainability, Essentia