| In just one month earlier this year, “volatile” oil prices sent the power bill for Tayside’s acute hospitals shooting up an extra £84,000. Senior managers and accountants have been poring over official reports that advise them of “further adverse movement”, essentially warning them a price hike could hit them at any time, sending energy costs skyrocketing.
The annual energy bill for the region’s acute hospitals alone is already around £4 million. “We have to pay energy bills just like anybody else,” said Ken Armstrong, director of facilities at NHS Tayside acute services division, the organisation responsible for Dundee’s Ninewells Hospital and Perth Royal Infirmary.
“Volatility of oil prices means, like everybody else, we have to absorb the impact of higher costs.”
Mr Armstrong said the Scottish Executive Health Department in Edinburgh monitored the fluctuation in prices, and tried to negotiate contracts for the purchase of energy over periods of several months that would be favourable, but that was fraught with difficulties when prices were “volatile”.
“It’s just like the situation everyone who has a mortgage faces,” said Mr Armstrong. “You try to get a mortgage at the right price for you, but wonder if you wait a bit longer can you get a better deal ,or will the costs go up even higher.
“People at the centre are looking at that all the time (trying to negotiate the most beneficial deals).” He said that, in the past year, the acute services division’s energy costs had risen by between £300,000 and £400,000. “I don’t think any of us could have anticipated the significant rise which came through in energy costs this year. Most people who pay bills will have found themselves facing higher costs.
“This is a good example (of the financial pressures on the NHS) to people sitting at home who have got an extra fiver to pay on their bill. It just gives them a feel for the bigger impact of this on a bigger organisation.”
He said if the price of a barrel of oil did indeed, as forecast, rise to $100, doubling the current price, that would have “a significant impact” on any business.
“It (the price of oil) peaked and then dropped again, and there are now signs it might pop up again. It is not unique to Tayside. It is a national issue. It is just one of the pressures the NHS has to take into account when divvying up the money it gives to the various health boards. Whatever hits us, we have got to handle it.”
Mr Armstrong said the situation was likely to place even more emphasis than at present in looking at ways of saving energy.
“The way forward is to ask how can we become extremely proficient in saving energy. I think you will see, not just in hospitals but the public sector generally, a big drive to try to secure better efficiency and better deals with regard to purchasing energy.
“Because of the difficulty in getting the timing right when bulk buying, I think the bigger emphasis will be on managing the situation locally by turning off computers at night and switching off unnecessary lights.”
He said a local NHS employee working in the estates department had been “dedicated to look at that”. |
