Carbon reduction scheme 'a tax on the NHS'

Carbon Reduction Commitment programme is slated for taking money from the NHS

The Government’s Carbon Reduction Commitment (CRC) scheme, which will see NHS trusts heavily fined for CO2 emissions, has been dubbed ‘nothing more than a tax on energy use’.

During a recent Guardian webcast on the subject of carbon reduction in the NHS, participants questioned the motives behind the plan, particularly since government changes mean trusts will now receive no financial incentive for reducing their footprint.

One NHS employee taking part said: “I view CRC, in its current format, as nothing more than a tax on energy use.”

And Trish Marchant, energy and environment manager at Medway NHS Foundation Trust, added: “I am not sure CRC is the right thing for the public sector.”

I view CRC, in its current format, as nothing more than a tax on energy use

The CRC is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations. These organisations are responsible for around 10% of the UK’s total emissions, with the NHS responsible for 3%, more than any other single service. Particularly high levels are found in procurement, travel and building energy use.

The system has been introduced to complement existing policy by covering emissions currently outside the Climate Change Agreements and direct emissions outside the EU Emissions Trading Scheme (EU ETS).

It works by requiring organisations to purchase carbon allowances, either in the early stages for a set rate of £12 per tonne of CO2 or, after an initial three-year trial, through auctions. Participants must then monitor their emissions from all energy sources and surrender allowances to match their energy use. Similar to the EU ETS scheme, extra allowances can be bought from other participants, but over the years the total number of allowances available will be cut, with the aim of driving down total emissions.

The process also includes an annual league table, naming and shaming those organisations that contribute most to energy use and climate change. The first of these tables was published last year and a large number of the top organisations were NHS trusts.

Budget restrictions on the NHS are a bigger driver to save costs by any means possible, including energy efficiency, without the need for the CRC scheme

Based on the NHS emissions recorded for 2010/11, which amounted to 2.7 million tonnes, the cost to trusts through CRC allowances will be more than £32m.

While critics are concerned about the impact this additional expenditure will have on already cash-strapped NHS trusts, they are most irate about the recent decision by the coalition government not to allow trusts which reduce emissions and therefore save money to reinvest that money into services. Instead, any savings will go into central government coffers. This amount could be as much as £700m for 2012, rising to more than £1billion a year in the future.

Marchant said: “Budget restrictions on the NHS are a bigger driver to save costs by any means possible, including energy efficiency, without the need for the CRC scheme.

“My trust was committing funds to energy-savings projects well before CRC was announced and yet we now have to divert more money away from patient care in order to pay the CRC fees. Also it takes up our time to ensure compliance.”

Sustainability champions say that, while they support programmes that force organisations like the NHS to think about the damage they are doing to the environment and people’s health, there is concern the CRC is a bit of red tape too far.

CRC is a complex process, however it can be a real driver for carbon reduction in an organisation and the benefits of a well-managed carbon management programme will outweigh the time and expense

David Pencheon, director of the NHS Sustainable Development Unit, said: “The CRC scheme is fundamentally a positive driver for encouraging organisations to cut emissions. It must not, however, be overly bureaucratic.”

And Tony Grayling, head of climate change and communities at The Environment Agency, said the Government was planning ways to simplify the scheme so it would be easier for trusts to comply. But he insisted the overall programme was a positive move and ‘probably a more suitable scheme than EU ETS for NHS trusts’.

Larissa Lockwood, who leads the Carbon Trust’s NHS Carbon Reduction Programme, added: “CRC is a complex process, however it can be a real driver for carbon reduction in an organisation and the benefits of a well-managed carbon management programme will outweigh the time and expense.”

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