News

OGC launches major public sector smarter energy buying campaign

Released on 10/06/2009

The Office of Government Commerce (OGC) has today launched a major campaign as part of the Pan-Government Energy Project to improve the way the public sector buys its energy. Government currently spends an estimated £3.8 billion a year on energy, and last month the Government's Operational Efficiency Programme announced possible annual savings of £320 million by 2012 through the adoption of aggregated, flexible and risk managed energy procurement.  

As part of the campaign the OGC has published two guides: Energy buying - Working together for better results and Energy buying - The effective way to manage risk aimed at promoting best practice management of energy procurement. These will be supported by a series of regional road-shows to further communicate best practice solutions across the wider public sector. The Operational Efficiency Programme recently announced that last financial year around £115 million was saved on energy spend as a result of collaborative procurement measures. 

The initiative is part of the Pan-Government Energy Project. This collaborative scheme is sponsored by the Ministry of Defence (MOD) and involves representatives from central and local government including Regional Improvement and Efficiency Partnerships. The project has developed best practice advice for energy procurement to maximise value for money and minimise risk, in consultation with the industry, customers and public sector central buying organisations.

Speaking about the energy campaign, Nigel Smith, OGC's Chief Executive said:

"The energy market can be extremely volatile, with prices varying significantly on a daily basis. This can make it very difficult to manage budgets and control costs. A great deal of work has been done in determining best practice solutions for buying energy, which is often considered to be quite a specialist activity. We are here to support public sector organisations, and provide a pathway to assist them in delivering value for money for the taxpayer. I thoroughly recommend all public sector organisations engage with this initiative."

Speaking about the energy buying guides, MOD sponsor of the Pan-Government Energy Project, Tom Logan said:

"Publication of the guides represents a further important development in the work of the pan-government energy project, which is bringing proven improvements in the procurement of energy to the public sector.  This is a good reflection of the work of the team, and an example of what can be achieved when central and local government work together."

The buying guides explain best practice in energy procurement and offer guidance on how to make effective decisions in energy procurement.  They provide a route map of how public sector buyers can access aggregated, flexible and risk managed contracts through a range of Central Purchasing Bodies (CPBs). They highlight the key services available through CPBs and the geographical areas they cover and sectors within which they operate.

The initiative also supports the Government's key sustainability agenda. The Government is committed to improving the sustainability of its operations and there are various targets on public sector organisations to improve sustainability.  Central Government departments are required to meet Sustainable Operations on the Government Estate targets, which cover carbon emissions and energy efficiency, and the OGC is helping departments achieve these through the work of the Centre of Expertise in Sustainable Procurement. 

Public sector organisations wanting to find out more about the campaign and access the buying guides should visit the OGC website or the OGC Service Desk on 0845 000 4999.

Notes to editor:

About the initiative
The campaign is being launched today as part of the Pan-Government Energy Project. This is sponsored and chaired by the Ministry of Defence, and involves representatives from central and local government including Regional Improvement and Efficiency Partnerships. Organisations involved in the project are:

Buying Solutions
Department for Business, Innovation and Skills
Department for Children, Schools and Families
Department of Energy and Climate Change
Department for Work and Pensions
Eastern Shires Purchasing Organisation
HM Revenue & Customs
Laser
London Energy Project
Ministry of Defence
NHS Purchasing and Supply Agency
North Eastern Purchasing Organisations
Office of Government Commerce
Procurement Scotland
Regional Improvement and Efficiency Partnerships
The Energy Consortium
Value Wales
West Mercia Supplies
Yorkshire Purchasing Organisation

The project has developed best practice for energy procurement in consultation with customers and public sector central buying organisations. The recommendation for all public sector organisations is to adopt aggregated, flexible and risk managed energy procurement. 

The Operational Efficiency Programme has set targets for all available spend to be channelled through collaborative strategies by the end of financial year 2010/11. These are 80% for central government and 50% for the wider public sector. Approximately 45% of public sector electricity and gas volumes are currently being bought through Pan Government Energy Project approved solutions. Adoption or use of these routes is not mandatory, and encouragement towards further take up will based on the attractiveness of their merits in delivering value for money.

About the Operational Efficiency Programme (OEP)
The OEP findings published recently show scope for a total of £15bn per annum increased value for money - including projected savings of £7.7 billion by 2013/14 through increased collaboration. The report recommends structures and tools to help organisations achieve savings, as well as improved accountability and performance management to encourage greater value for money throughout the public sector. For more about the OEP visit http://www.hm-treasury.gov.uk/vfm_operational_efficiency.htm

About the OGC

The Office of Government Commerce (OGC) is an independent office of HM Treasury, established to help government deliver best value from its spending. The OGC works with central government departments and other public sector organisations to ensure the achievement of six key goals:

• Delivery of value for money from third party spend;   
• Delivery of projects to time, quality and cost, realising benefits;   
• Getting the best from the government's £30bn estate;   
• Improving the sustainability of the government estate and operations, including reducing carbon emissions by 12.5% by 2010-11, through stronger performance management and guidance;   
• Helping achieve delivery of further government policy goals, including innovation, equality, and support for small and medium enterprises (SMEs);   
• And driving forward the improvement of central government capability in procurement, project and programme management, and estates management through the development of people skills, processes and tools.

OGC provides policy standards and guidance on best practice in procurement, projects and estate management, and monitors and challenges departments' performance against these standards, grounded in an evidence base of information and assurance. It promotes and fosters collaborative procurement across the public sector to deliver better value for money and better public services; and it provides innovative ways to develop government's commercial and procurement capability, including leadership of the Government Procurement Service.

Media contact:
Liam English, OGC Press Office
T: 020 7271 1318
M: 078 258 33980
E: liam.english@ogc.gsi.gov.uk

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk