Dr Kirstin Coley - Energy Management Officer
Reading Borough Council
Introduction
The recent volatility in energy prices has added further pressures to public sector budgets. Given the change in the energy landscape of recent years, it has never been more important to work with a trusted partner to help you navigate the complexity of both energy procurement, and procurement legislation.
Following an unsatisfactory experience with a previous buying organisation, Reading Borough Council (RBC) entered a contract with WME in April 2020, opting for our Procurement Only service. Whilst the key focus of this provision is risk managed energy procurement, WME provide a range of additional services that go beyond other traditional Procurement Only offerings. Our personable, 'hands-on' approach to managing Procurement Only contracts ensures we build relationships quickly with customers, despite billing flowing directly between them and our framework supplier. The Reading Borough Council portfolio consists of 729 supplies, representing 35 GWh of energy, covering corporate sites, street lighting and schools.
Who are WME?
West Mercia Energy (WME) is a leading Public Buying Organisation, with over 30 years' experience providing energy services to the public sector through our range of utility frameworks procured in line with Public Contract Regulations (2015).
Specialising in managing energy contracts solely for the public sector, WME is jointly owned by four local authorities: Shropshire, Telford & Wrekin, Worcestershire, and Herefordshire councils respectively. WME work with over 100 different public sector organisations, delivering our two core service options: A Fully Managed service and Procurement Only service.
Reading Borough Council had previously worked with another provider, utilising a Procurement Only model. This provider had a shorter advanced buying window of just 6 months, which the Council deemed as very high-risk. The other challenge presented by the short buying window was that it did not allow for the Council to effectively forecast costs, making budget setting difficult. RBC received minimal budget support from the provider, often receiving their new annual rates after the delivery period had begun.
Furthermore, their previous provider was a much larger organisation and as a result, customer service was generally poor, leaving RBC feeling unvalued as a customer. They were left without a consistent Account Manager to liaise with about their specific needs, and support was lacking in helping to resolve issues relating to the framework suppliers.
Following a review of the market to see what other compliant energy frameworks were available, RBC came across West Mercia Energy. As they had been with their current provider for some time, they knew exactly what kind of service they wanted in a new provider. Extensive research and receipt of positive references from other local authorities working with WME helped with the decision to move over to our Procurement Only service.
WME have delivered energy rates to RBC on average
68%
below the market across 2021/22 & 2022/23. This delivered savings worth over £5m over 2 years to RBC and their contracted schools.
"In 2021 independent energy consultancy, Cornwall Insight, reported that the level of service provided under WME's Procurement Only model was 'higher than that offered by any other Third-Party Intermediary or Public Buying Organisation".
The biggest change for Reading Borough Council when moving to WME was the change in the customer service they experienced. Issues with their previous supplier had resulted in severe escalation, but a lack of dedication to help resolve issues was just one of the many frustrations RBC experienced. The lack of Account Management made it difficult for them to manage their contract on a day-to-day basis, resulting in significant billing issues. With a portfolio of over 700 supplies, RBC experienced a heavy administrative burden which was increased when their previous framework provider didn't offer any support to resolve these supplier issues.
Our Procurement Only solution provides all customers with their own dedicated Account Manager and includes a key focus on supplier management. We facilitate quarterly review meetings between RBC and our framework supplier, which WME also attend. During these meetings, the supplier reports against RBC's agreed KPIs.
We would highly recommend West Mercia Energy to other local authorities. The level of customer service and purchasing strategy for energy has worked for us and we have no doubt this would work well for other public sector organisations.
"Moving to WME has enabled us to massively reduce the risks associated with energy procurement, and dramatically improve the budget forecasting we provide internally which supports the Council as a whole. The responsiveness and support we received from the WME team under our Procurement Only contract ensured we felt like a valued customer, and the ongoing transparency of all aspects of WME's work has enabled us to build a strong partnership. We were surprised at the level of service provided under the Procurement Only model, and our recent move to WME's Fully Managed Service is testament to our experience with them to date."
As part of our risk managed procurement strategy, WME produce weekly market insights, whilst the Account Manager provides updates to RBC on our live trading positions. We provide budget forecast information to RBC, which enables them to forward plan and inform other Council budget holders and internal stakeholders. We also have an extended buying window which provides increased risk management.
Almost immediately upon joining WME, RBC noted a reduction in administration time to service the contract. RBC were supported by a dedicated CRM team from WME's framework supplier, which enabled a much smoother query resolution process. Should RBC be unhappy with a supplier's performance in any way, WME have a clear escalation process in place.
Clear and concise processes were put in place at the beginning of the contract to manage key tasks such as site additions and removals from the contract. These processes demonstrate WME's understand of managing large multi-site energy portfolios.
Seamless Contract Transition
Ahead of the move to WME, we completed extensive work to ensure the transition was as smooth as possible, producing a detailed 'onboarding tracker'.
We supported the settling of old debts and held upfront conversations about the entire process to ensure all stakeholders were clear on the responsibility of each task and associated timeframes. Reading Borough Council commented that the move to WME was easier than they imagined it would be, given the number of supplies transferred. Additionally, they commented that WME's support to help collate data was invaluable.
After 2 years on our Procurement Only service, RBC moved to our Fully Managed (FM) Service solution.
WME now provide a unique bill validation service to RBC, along with full query management, siteworks and portfolio management services - alongside our ongoing energy procurement. RBC had previously managed this via a third-party bureau supplier and noted that having everything in one place, from one company, has provided significant efficiencies and cost savings.
By opting for 100% renewable electricity, RBC has saved
2,320
tonnes of CO2 equivalent each year.
Value-Add service
As well as supporting the Council's corporate sites, WME helps to manage relationships directly with schools on the RBC corporate contract. WME issue regular newsletters and even communicate the school's annual prices directly to them - this was a previous admin burden for the Council.
WME also provides RBC with 100% renewable electricity, supporting their net-zero ambitions, and they have joined our water framework, meaning all their utilities are contracted with WME.