Page last updated at 13:32 GMT, Sunday, 17 August 2008 14:32 UK

Ministers launch electricity plan

Electricity pylon
The government wants to 'protect the public purse'

The Scottish government is to bulk-buy electricity for the whole public sector with a view to saving taxpayers' money in a climate of soaring energy bills.

Ministers have launched a tender to supply electricity on a national basis to all public bodies, replacing hundreds of separate contracts.

Officials said the centrally-negotiated deal would get power for the public sector at the "best possible price".

The annual public sector electricity bill is around 200m.

The new contract, which will come into force next autumn, will be used to supply electricity to councils, health boards, police and fire services, universities and colleges, Scottish Government agencies and non-departmental public bodies.

The new bulk-buying strategy should allow the government to negotiate a lower price and streamline the management of many different contracts.

The national procurement of electricity will be important in minimising the impact of spiralling prices on the public sector
John Swinney
Finance Secretary

The contract is due to be awarded around the turn of the year, with purchases from the wholesale market being made from early 2009 onwards.

The initial supply period of three years will run from October 2009 to September 2012, with options to extend it by a further year.

Finance Secretary John Swinney said: "As energy prices are rising, this government will take all practical steps to protect the public purse.

"The national procurement of electricity will be important in minimising the impact of spiralling prices on the public sector."

He added that the move would also support efforts to reduce Scotland's greenhouse gas emissions.

'Choppier financial waters'

First Minister Alex Salmond was upbeat about Scotland's economic prospects in an article he wrote for the Sunday Times Scotland.

He said: "Three months ago, Mervyn King, the governor of the Bank of England, warned us that the 'nice' decade was over - by which he meant a sustained period of 'non-inflationary consistent expansion'. Three days ago he was prepared to consider the possibility of a recession.

"It was clear months before the governor's speech that we were sailing into choppier financial waters, and a tougher international climate. It does not follow that the future has to be 'nasty'. In the economy, as in life, the future is what we make it.

"There is a resilience in the Scottish economy to a downturn, and there are indications that Scotland's economy is performing significantly better than the UK as a whole, albeit this is a relative improvement against an absolute decline.

"Figures for Scotland's labour market are stronger than the averages for the UK, with higher employment and activity rates.

"Last week, Scottish unemployment was continuing to fall, to 4.2%, while UK unemployment increased to 5.4%."

He did, however, caution that there was "no scope for complacency".


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