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How the Green Deal could benefit GP premises

Andrew Cooper explains a new source of funding that GPs could use to pay for 'green' surgery improvements.

The Green Deal will help practices fund energy efficient improvements (Picture: iStock)
The Green Deal will help practices fund energy efficient improvements (Picture: iStock)

The Green Deal is a new finance mechanism that could offer practices an alternative to traditional methods of financing refurbishments to surgeries and other buildings whilst providing energy savings, a reduced carbon footprint and a reduction in operational expenditure.

GPs have always sought innovative methods to finance expensive upgrades to premises. The current health reforms mean this need will be amplified as clinical commissioning group (CCGs) take on more responsibility for parts of the NHS Estate and the climate change targets that accompany it.

As such GPs and GP commissioners would be wise to investigate the Green Deal as a means of financing such upgrades.

How the Green Deal works

The Green Deal is a government initiative aimed at encouraging businesses and home owners to employ more green technologies in their properties.

Central to the Green Deal is a test known as the Golden Rule. For works to qualify for finance they must be installed with no upfront cost to the beneficiary, and repayments, including interest, must not exceed the predicted energy savings.

This is therefore a financing mechanism where the beneficiary will be able to get energy efficient improvements without having to make an initial investment. A Green Deal provider prepares a quote for finance to include the installation of measures and any repayments are to be made through energy bills. As such, loans are secured against the energy supply and not the property or a person or company.

Where measures do not pass the Golden Rule, customers can still benefit from Green Deal finance up to the level of savings they can generate. The customer can then choose to pay the rest of the finance in another way.

GPs can of course take advantage of the scheme individually or they may be able to do so collectively through CCGs or social enterprises. In doing so they may be able to streamline the process and ensure more competitive rates of interest from Green Deal providers and installers through economies of scale and an increase in business volume.

Benefits of the Green Deal

There are clear benefits to the Green Deal – in the short term it will save upfront capital costs, in the medium term it will provide some security against any energy pricing increases above inflation and help to reduce operational expenditure and in the long term it will help meet stringent carbon reduction targets that all those in the NHS now face.

In addition, premises that showcase sustainable features such as well-designed energy efficient lighting or modern ventilation systems provide a more comfortable environment and have been shown to enjoy higher productivity rates and aid recovery in a health care environment.

Sonia Roschnik, operations director at the NHS Sustainable Development Unit has confirmed that CCGs will be required to embed sustainability, reduce CO2 and, in doing so, improve public health. ‘Any kind of initiative, like this, that might help CCGs achieve these goals should be explored,’ she advises.

The applicability of the Green Deal to GPs was reinforced by a spokesperson from the Department of Energy and Climate Change (DECC) who advised that ‘the government would encourage everybody, including GPs and clinical commissioning groups, to seriously consider taking out a Green Deal as there are a number of significant benefits’.

When does the Green Deal start?

The first Green Deal accredited assessors are expected to begin operating from October 2012, although the actual financing and therefore installation of recommended measures cannot begin before January 2013.

There are currently 22 approved green deal providers of finance a list of which can be found at on the DECC's website here.

Green Deal plans

The prerequisites for all Green Deal plans include:

  • The expected savings must be equal to or greater then the costs attached to the energy bill (the Golden Rule).
  • The measures must be approved and the claimed bill savings must be accredited through a due process.
  • The measures installed must have been recommended for that property by an accredited, objective advisor who has carried out an assessment.
  • The measures must be installed by an accredited installer.
  • For householders, the Green Deal provider must give appropriate advice within the terms of the Consumer Credit Act (CCA). For businesses there are mandatory protections which are offered outside of the CCA.
  • The Green Deal must have consent from the relevant parties including the express consent of the current energy bill payer.
  • The presence of a Green Deal must be properly disclosed to subsequent bill payers.
  • Energy suppliers must collect the Green Deal charge and pass it on within the existing regulatory safeguards for collecting energy bill payments.
  • Andrew Cooper is a senior sustainability consultant at Drivers Jonas Deloitte which is currently advising several local authorities on using the Green Deal as part of a wider strategy to reduce carbon emissions, maintain estates and generate employment. andcooper@djdeloitte.co.uk

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