Public energy contracts face pressure to adopt more dynamic and transparent buying strategies

For schools, NHS trusts and councils, energy is one of the biggest costs they can actively control. Yet when they decide how to buy it, many still default to the Crown Commercial Service, a route that is familiar, politically defensible and compliant on paper, but not necessarily the best fit for every estate.

That caution is understandable. Public bodies are under pressure to show they have followed a safe, legitimate process. But in a market that has been unstable for years, ...

convenience can quickly become a weakness. John Haw, chair of the Energy Consultants Association, argues that public sector buyers should be asking whether the default option is delivering the best outcome, or simply the easiest one to explain.

One issue sits behind many of these decisions: the broker. Most organisations do not buy energy directly. They rely on an intermediary to source contracts, manage timing and, in theory, secure the best available terms. Until now, that part of the market has largely operated without formal oversight. Haw says the government’s move to give Ofgem statutory powers over energy brokers, announced after concerns over hidden commissions, mis-selling and poor complaints handling, underlines why buyers should be more demanding now, before regulation is fully in place.

The timing matters because the Procurement Act 2023, which came into force on 24 February 2025, has already changed the public procurement landscape. According to government guidance, the legislation was designed to create a simpler, more flexible commercial system, broaden access for smaller suppliers and social enterprises, and increase transparency across the full life cycle of public spending. In principle, that gives public bodies more room to choose arrangements that better suit complex, multi-site energy portfolios.

Haw says the CCS model can be limiting because it is built around fixed procurement windows, typically tied to April and October delivery periods. That may help collective buying, but it also means organisations can be forced to act on a schedule rather than in response to market conditions. For buyers facing volatile wholesale prices and geopolitical shocks, the inability to move at the right moment can be costly.

He also points out that the service package may be too narrow for large estates. A centralised framework designed for government procurement is not always well matched to organisations that must deal with multiple meters, bill checks, carbon reporting, meter rationalisation and VAT reconciliation. Those are practical tasks, but they can have a significant impact on spend and administration.

Haw says a more adaptable option now exists in the form of dynamic markets, which the Procurement Act allows public buyers to use while staying within procurement rules. These markets can give access to approved suppliers, support more responsive contract strategy and allow the inclusion of renewable solutions and wider service support without a full re-tender. They are still uncommon in energy, partly because they are harder to build and manage properly, but that scarcity reflects the complexity of the model rather than a flaw in it.

With Ofgem’s regulatory regime for brokers still being developed and full enforcement not expected until 2028, Haw’s argument is that public sector organisations cannot wait for the market to self-correct. Instead, they should ask sharper questions at the point of appointment: whether a broker operates in a compliant framework or dynamic market; whether it can act on market conditions rather than a fixed calendar; what it provides beyond contract placement; and how it is paid.

The Energy Consultants Association says its members must follow a code requiring upfront disclosure of commission, which it presents as a basic safeguard in a sector still waiting for statutory regulation. For public bodies under pressure to squeeze every pound, that kind of transparency may prove more valuable than familiarity with the default.

Source: Noah Wire Services