A report to the Council Executive today (Tuesday 25 October) set out the scale of future costs and potential mitigation measures.
Due to the global energy crisis, the council's energy costs in 2022/23 are estimated to be £2.644 million more than were forecast, which resulted in a budget pressure that is having to be managed this year. Like all households and businesses, West Lothian Council's energy bill is expected to increase very significantly in future years, in the council's case by over £12.5 million between 2023 and 2027/28.
The report set out that there is continued price volatility in the advance purchase and day-ahead markets. Council officers are forecasting that will electricity will increase by 53% in 2023/24 and by a further 17% in 2024/25. Gas is expected to increase by 18% in 2023/24 and by a further 5% in 2024/25.
The council's property portfolio includes schools, nurseries, offices, libraries, community centres and care facilities.
The council's Head of Finance and Property Services warned that rising costs will result in more of the council's budget being diverted to pay for rising energy bills. Officers have already implemented a number of measures to reduce energy consumption but a range of further measures will be considered that would reduce energy use and costs including; introducing tariffs for public EV charging, enhanced LED lighting, increasing the use of solar PV panels on buildings and reviewing the provision of local swimming pools.
Donald Forrest, Head of Finance and Property Services said:
"There is a serious consequence to rising energy costs and massive increases are expected in the years ahead. It is important that the council takes measures at local level to mitigate the financial impact as much as possible by reducing consumption by implementing a range of energy conservation measures. We need to reduce energy use as much as possible to ensure that costs are kept to a minimum and to mitigate the amount of our budget which is taken away from local services to pay for rising energy costs.
"Everyone is having to manage rising costs and the impact is being felt across all households, businesses, the voluntary sector and public bodies, including West Lothian Council. The challenges are hugely significant and difficult decisions lie ahead in our efforts to reduce energy."