The hike in energy prices has fuelled Camden’s decision to continue to get its energy through a buying group – ensuring it gets the best deal for heating and lighting council homes and schools.
Richard Olszewski, the cabinet member for finance, said the move could help the council manage the risks caused by market volatility and help it get a good deal on prices.
Wholesale fuel costs have gone up 200 per cent this year alone, but the buying group means Camden paid less than that.
Cllr Olswzewski said: “We need to be able to act quickly because we are dealing with potential volatility in this market.”
He outlined how buying through a group “gives us economies of scale, it reduces the cost and enables us to manage market volatility”.
He said a new contract from next year could help the council weather some of the financial pressures of the hikes in fuel prices.
The four-year deal with the central purchasing body runs from next year to buy gas and electricity for council homes, schools and corporate buildings, such as the town hall and libraries.
Camden is already a member of a central buying group run by LASER, a subsidiary of Kent County Council. It has 235 public sector customers with a buying power for energy of £800m.
It costs Camden Council £125,000 a year – less than one per cent of its energy supply contracts – and the fee is shared by customers.
It means the council supplied gas to its 12,000 homes for half the retail gas price over the last six years.
LASER predicts a 145 per cent increase in fuel costs next year.
The war in Ukraine, increased global demand post-Covid, and the shortage of gas from Russia have helped ramp up energy prices.
A Town Hall report said a buying strategy of getting energy in the run-up to the date it is needed instead of paying the energy price on the day saw it pay 68 per cent less than market highs.
None of its energy comes from Russian suppliers.
The contract for October 2021 to September 2022 is worth £15m, but is expected to rise, and the contract is due to run out next autumn.
The cabinet agreed to buying gas and electricity through a buying group until 2028. The decision does not specify who that buying group will be.