A Sports and Recreation Trusts Association (SpoRTA) group encompassing four trusts from London, Essex and Kent has commenced an initiative with energy market consultancy John Hall Associates (JHA), to manage their exposure to rising energy prices.

The trusts have a combined annual energy spend of £1.6m covering a total of 21 sites.

According to JHA, in recent years, volatile oil prices and spiralling demand for energy in China and other emerging markets have driven up electricity and gas prices in the UK at an accelerating pace, with further pressure coming from speculation in London’s traded energy market. Prices have all but doubled over the last 12 months with no immediate sign of a downturn.

Key Alliance, the purchasing consortium which is working with SpoRTA members to reduce costs and streamline their procurement arrangements, first introduced JHA to SpoRTA trusts last year. Impulse Leisure, Fusion Leisure, Bromley Mytime and Active Life have now chosen the company to lead a two-year programme to manage risk in the area of energy costs and to develop a comprehensive long term strategy.

The key to this strategy involves buying electricity and gas contracts at the optimum time as opposed to buying when resource will allow or accepting a price delivered just prior to contract renewal which is historically the least effective strategy, said a spokesperson for JHA.

“A central part of this strategy is to keep each trust fully advised on where prices are going on a weekly basis,” they said. “In markets as volatile as electricity and gas in the UK, major adverse price shifts year-on-year are common, while for those who fail to keep abreast of movements in the market, the damage can be far worse.

“Keeping the business informed on a timely basis as to where the market stands in relation to the trusts’ last contracts will be vital in preparing sensible budgets for these spend areas.

“By tracking the market with the trusts’ energy risk strategy clearly in view, John Hall Associates can ensure that the most appropriate opportunities for buying ahead are identified and exploited and, by handling the entire tendering, supplier selection and contract negotiating process on behalf of the trusts, John Hall Associates will relieve senior management at the trusts of a serious drain on their time and resource.”

Jon Tatchell, company secretary for Impulse Leisure in Thurrock, which has six sites included in the initiative said: “Impulse Leisure has experienced some large increases in utility costs in recent years, which have had an adverse effect on planned budgets and hurt our bottom line.

“We needed to ensure that we could plan financially for the future and we couldn't do this with any certainty when energy, one of our largest expenditures, had its price dependent on the day it went out to tender in the market place.” Using JHA enables us to plan for the future and have an expert opinion on getting the best price.” Details: contact Mark Sullivan on +44 (0)1403 269430 or email: [email protected]