NHS Lothian facing £17m bill to pay for gas and electricity

Published on Friday 30 January 2009 09:00

NHS Lothian is facing a £17 million bill for gas and electricity for this year, it has been revealed.

The hike will see a rise of almost 4 million from last year, and is a result of fluctuating electricity bills over the past few years.

It is the biggest annual increase of all the health boards in Scotland, although NHS bosses said they didn't anticipate a further rise for 2009/10.

With more than 300 buildings – many of them Victorian – NHS Lothian is not well placed to insulate premises with energy-saving measures, which could also impact on ambitions to reduce its carbon footprint.

The 17 million bill for 2008/9 is sure to impact on the books, which are already showing an overspend for the year, although energy contracts are negotiated nationally and not by Lothian chiefs, the health board's director of organisational development, Alan Boyter, said.

He also said NHS National Procurement had been haggling with companies "to reduce future costs below the costs incurred already in October-December of this year".

However, thanks to a variety of initiatives, they hope to shave 500,000 off the bill for next year. Among these are a 100,000 investment at the Western General which has seen a new building management scheme introduced which will save 70,000 a year in gas bills.

Recent installations of new energy efficient instantaneous plate heat exchangers at the Lothians' three acute hospitals – ERI, the Western and St John's in Livingston – will also help push down the overall cost.

Director of facilities John Jack said: "Contracts for power are agreed nationally to ensure health boards maximise our buying power. Our participation in this national agreement means we are well placed to take advantage of recent energy price decreases.

"As a result we have reduced our forecast energy expenditure for 2009/10 to 16.5m. We are also putting plans in place to reduce our energy consumption.

Once the health board has vacated the Sick Kids Hospital at Sciennes and the Royal Victoria Hospital in Craigleith – both of which are expensive to heat – the annual bill should come down further.

Potential problems arising from the credit crunch are troubling health chiefs privately, although no current schemes will be affected. They are also optimistic that when energy contracts are renegotiated later this year significant savings will be made.

At a meeting of the NHS Lothian board in North Berwick this week, director of finances Susan Goldsmith told members the overspend for the financial year up to December was 2.3 million.