Since 2007 the London Energy Project (LEP), Capital Ambition’s successful and enduring legacy project, has enabled its 36 member authorities to deliver significant financial benefits - C.£60 million (£1.7m per average sized authority) - through better value for money supplies and improved commercial, social and environmental outcomes from a £0.5bn aggregated annual spend on essential utilities (electricity, gas, water).
This is a stable and long-term approach to intelligently navigate rapid change in the authority business environment and corresponding volatility in the commercial utilities market – both of which signal unwelcome cost pressure and unprecedented demands on authority management.
London Energy project is authority-led, authority-owned and independent of commercial market influence, operating on a cost recovery only basis to
- enable London authorities to work together effectively and combine their £0.5 billion annual spending power, so authorities get more for less from the supplier dominated utilities market
- equip member authorities to adopt better solutions (commercial contracts, new technology, internal operations, market innovations) to manage the impacts of increasing utility and regulatory costs within constrained budgets
- benchmark energy prices and services, so you can be sure your Authority is getting the value for money you expect and take action where it is not
- ensure poor supplier practice does not prevent authorities’ efforts to transform operations and reduce back-office costs
- get better social and environmental benefits from essential authority spend, eg apprenticeships, schools’ education packs, good quality green energy, support for low carbon London
- develop and manage LEP member joint procurements, as part of a long-term category strategy, including:
- a brand new pan-London water contract for 2018, looking for a market-leading retailer that can support authorities’ efforts to better manage their estates, pay less and minimise their use of water, and better manage risks
- improved and transformative energy supply contracts for 2020, to deal with the ever more complex electricity market; making sure we seize opportunities to control costs and innovate on many levels, and have the right commercial arrangements to deliver complex commodity trading right though to providing certified green energy at no additional cost, or which support and pay more for your onsite generation
- carbon audit and support, so that you have a low cost and guaranteed route to regulatory compliance
- unmetered supplies review service, saving authorities on average over £50k per year.
Our long-term approach has helped member authorities to realise £60m savings/avoided costs. An authority spending £7.5m p.a. on energy and avoiding only 1% of that expenditure would expect to benefit by £75k. Aggregation benefits alone (combining our contract values for greater buying power) are more usually recognised as being 3.5% of contract value.
"The combined spending power that is achieved through aggregation of member bodies’ energy requirements provides all LEP participants access to the wholesale utilities market with a significant position of market influence."
Head of Procurement, London Borough of Hounslow
Strength in numbers
LEP is a shared service between 36 (primarily London based) authorities, supported by a Delivery Team that acts as an intelligent client function to deliver a coordinated Work Programme.We welcome new authority members, not just London local authorities, that share our
- common business priorities for value for money and expect better outcomes from utilities services and supplies
- supply chains
- commitment to aggregating our spend and working together towards common objectives to get us more for less, not more of the same.
Find out more about the Opportunities for Authorities available via LEP membership.