Research Project

Going Dutch: Local Government and Fuel Poverty
22 July, 2011

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A new White Paper from localism think tank the New Local Government Network (NLGN) suggests that by following a model of bulk purchasing from energy providers recently launched in The Netherlands, councils can create significant savings for their residents.

The innovation undertaken earlier this year by a Dutch organisation, Met de Stroom Mee, yielded a 20% saving in energy costs for households. If councils imitate this model in the UK, even a 10% equivalent efficiency would result in a £125 reduction in costs to consumers.

The media reports in recent weeks that more households in the UK could be dragged into fuel poverty over the coming years, highlights the need for more effective measures to reduce energy costs for consumers. The report, ‘Going Dutch’, suggests that a local authority advocating on behalf of a group of citizens can result in drastic reductions in costs to consumers.

Author of the publication, Liam Scott-Smith, said that:

“Government data show that a 1% increase in fuel costs causes another 40,000 people to go into fuel poverty. Costs are constantly increasing and show little sign of slowing down. With money tight, we need more radical solutions than just asking the state to give a handout to the poorest”

“By ‘going Dutch’ and clubbing together to buy in bulk from energy suppliers, consumers can drastically reduce their costs. This model means that UK consumers could save around 10% on energy bills – that’s £125 back in the pockets of every participant. Local authorities are ideally placed to negotiate on behalf of local citizens”

“The beauty of the model is that the more people councils can get to participate, the cheaper fuel becomes. A 10% saving means a £125 cashback and 20% means a £250 rebate for consumers. If councils fully buy into this new model, the potential for savings is massive”

The model of bulk purchasing, as used by Met de Stroom Mee in The Netherlands, offers a vehicle for councils to support their citizens without increasing financial outlay. The report shows that by taking the lead in ‘aggregating and negotiating’ for the services that constituents receive, councils can remain at the heart of their communities despite serious financial pressure as a result of spending cuts.

Publication Date: 22 July 2011
Authored by: Liam Scott-Smith