Utility price hike confirmed by Year on Year overall spend increase

Monday 7 November 2011

Utilities are a cost most businesses have to bear, and in the current economic climate this is an industry sector that continues to pass on costs to its commercial customers.

Procuria currently manages a client spend in excess of £6m for utilities supply - Gas and Electric. For the period April to September 2011 we took a cross section of tenders carried for clients (with an estimated spend approaching £100K). By focusing on spend for the last 12-months versus estimated spend for the next 12-month period, rather than comparing unit prices (affected by geographical location as well as individual usage) it provides a fairer year-on-year figure for comparison.

Of the clients surveyed, the average spend for the last 12 months was £5,581 per annum, the estimated spend (assuming consumption remained the same) for the next 12-month period was £6,274, which represents an average year-on-year increase of almost 6%.

Further analysis showed us that had those clients remained with their existing supplier, they would have received a 14% increase compared to the year before. This figure is reflected by wider media coverage on utility price hikes. These findings reinforce the value of a managed tender process, where overall cost savings were not achieved there was the consolation of limiting that increase significantly.

Furthermore, there is the cost saving in allowing business people to focus on their core business versus the need to manage the process, using up time and resources better served elsewhere.

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