Health Department
Directorate of Finance

NHS Management Executive
St Andrew's House
Regent Road
Edinburgh EH1 3DG

Dear Colleague

NHS IN SCOTLAND: ENERGY CONSUMPTION TARGET 2001 - 2010

Summary

1. This letter advises colleagues that as announced on 26th April 2000 the Minister for Health and Community Care has agreed a follow-on national target aimed at a continuing reduction in the NHS in Scotland's consumption of energy.

2. The target is a climatically adjusted reduction of 2% each year over the 9 year period 2001-2010.

3. This target was arrived at with the assistance of the NHS in Scotland Property and Environment Forum in the analysis of past performance and the potential for future improvement and has the support of the Minister for Transport and the Environment. If achieved, it will make a significant contribution to the Scottish Climate Change Programme, currently the subject of consultation, and to the UK Government domestic target of a 20% reduction in carbon dioxide (CO2) emissions below 1990 levels by 2010. This in turn is a major element of the UK target to reduce greenhouse gas emissions (carbon dioxide, nitrous oxide, methane, perfluorocarbons, hydrofluorocarbons, sulphur hexafluoride) by 12.5% below 1990 levels by 2008-2012, as agreed by European Union Environment Ministers in 1998.

Background

4. The NHS in Scotland has a longstanding commitment to energy conservation. A National Audit Office (NAO) report in 1985 acknowledged the significant cost savings achieved in the NHS in the previous 10 years and suggested that savings of up to 30% were possible by the end of the century, without adversely affecting patient care or the comfort of hospital users. This target was endorsed by SCOTMEG in a 1988 Report on Energy Management and Conservation. In the light of this report, The Scottish Office Department of Health called for Health Boards to achieve annual savings of 1.5% - 2% in energy consumption over the 15 year period to 2000-2001.

25th April 00

______________________________

Tel: 0131-244 -2777
Fax: 0131-244 -2323
email: ian.grieve@scotland.gov.uk
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5. The NHS in Scotland Property and Environment Forum's 1998-1999 Energy and Environment Report announced a climatically adjusted energy consumption reduction of 3.3% for that year. This figure continued the trend of keeping overall energy performance well within the long-term national target and equated to a cumulative saving in energy consumption of over 28% since the base year 1985/86.

6. NHS MEL(1999)61 set out the Scottish Executive Health Department's environmental management policy for the NHS in Scotland and in doing so said that action beyond 31 March 2001 in relation to a new energy target would be taken forward in consultation with the Enterprise and Lifelong Learning Department and the NHS in Scotland Property and Environment Forum, representing the Service. The target now announced reflects that consultation.

7. If the year on year target is achieved it would be equivalent to a total saving of 46% by 2010 over the 1990 Kyoto base year. Although it is not proposed to set a specific target for the continuing reduction in CO2 emissions, the reduction in energy consumption will inevitably bring that in its wake and will further increase the existing 1998?1999 figure of a 31% reduction below 1990 levels. This will be a significant contribution to the Scottish element of the UK 20% reduction commitment.

8. The Department supports the ongoing work of the NHS in Scotland Property and Environment Forum in its development of a comprehensive database of energy information. This will allow it to provide benchmarks and performance indicators which Trusts and other NHS in Scotland bodies may use to set targets specific to their own circumstances. In some cases these may be lower and in others higher than the national annual 2% target.

9. The Department recognises that improvements in energy performance will continue to arise from a combination of actions. These will include: a reduction in heated volume as the property owned and occupied by the NHS in Scotland continues to change to reflect need; the provision of new energy efficient buildings; and measures to improve the energy efficiency of existing buildings. Such measures will require capital investment, if not through PPP/PFI or pool capital, then from a Holding Body's formula allocation or receipts. All such investment must obviously reflect the Trust's, or other Holding Body's, assessment of priorities and be reflected in their agreed Property Strategy.

Action

10. Although the current target does not expire until 31 March 2001, it is recognised that NHS in Scotland bodies need time to formulate strategies and plans towards achieving the new target. Colleagues are now asked, having regard for current performance, to develop further their energy performance plans and in so doing to have regard for the agreed national energy savings target of 2% per year.

Yours sincerely

JOHN S ALDRIDGE
Director of Finance