The Sunday Telegraph: NHS carbon trading sees millions go up in smoke

EXTRACT: When it was launched last year, carbon trading was trumpeted as a way to curb the damage big business does to the environment. But the oil company Shell has made £49.9 million selling its unused allocation and BP has made £43.1million, while public bodies are struggling to break even.

THE ARTICLE

By Melissa Kite Deputy Political Editor, Sunday Telegraph
Last Updated: 12:13am GMT 05/11/2006

Hospitals have lost nearly £6 million since a controversial Government scheme to cut carbon emissions was introduced.

The chaos caused to essential public services by Labour’s participation in the European Union Emissions Trading Scheme is revealed in a series of emails and documents released under the Freedom of Information Act.

They show that hospitals have suffered a net loss of £5.8 million since the beginning of 2005. Campaigners say that this is the equivalent of employing 309 nurses.

The documents also show that the Department of Health has attempted to cover up the cost of the scheme under which public services and companies buy carbon credits to offset their emissions.

An investigation started after Michael Gove, the Tory MP for Surrey Heath, tabled a Commons question on the issue and was refused access to the figures.

Reporters calling for answers from the Department of Health suggested that £1.3 million a year was being lost by hospitals buying and selling carbon credits.

In a message on July 4 to Nick Grealy, of the NHS -purchasing and supply -agency’s utilities division, Patricia Nicholas, a Department of Health senior press officer, asked: “How can we robustly scotch the £1.3 million -figure?”

Mr Grealy replied that the figure “would have been right at some point in time”. He said that, using current carbon prices, hospitals would incur costs of £810,000 a year but the administrative costs of the scheme were £3,000 per trust, adding an extra £300,000 to the total.

Another press officer, Shumon Rahman, then asked Mr Grealy to come up with a revised figure based on only 10 per cent of trusts buying credits and told him: “Last thing we want to do is come with a speculative ‘what if’ all trusts spent money on carbon credits.”

However, this is despite the fact that it is compulsory for all hospitals to adhere to the scheme. In his reply, Mr -Grealy said there was “no way of knowing, short of calling up all of them, whether trusts have bought allowances or not”.

However, the think-tank Open Europe did precisely that, and 85 trusts replied to its request for information. The net overall loss for the first phase of trading (2005 to 2007) so far is £5.8 million.

One of the big losers was North Glasgow, whose four hospitals lost nearly half a million pounds. Russells Hall Hospital in Dudley lost £284,390, the Queen Elizabeth Medical Centre in Birmingham £347,349, and Leeds Royal Infirmary £175,000. Twenty-two hospital trusts lost a six-figure sum while a dozen more lost between £50,000 and £100,000.

When it was launched last year, carbon trading was trumpeted as a way to curb the damage big business does to the environment. But the oil company Shell has made £49.9 million selling its unused allocation and BP has made £43.1million, while public bodies are struggling to break even.

David Miliband, the Environment Secretary, told MPs in June: “Our system has worked well. All but the electricity supply sector are living within their allocations.”

But Rupert Hughes, of Epsom and St Helier NHS trust, complained in an email to Lorraine Brayford, the programme manager of the Department of Health’s estates and facilities division, on June 29 this year: “I’m not sure where David Miliband gets his briefings. I’ve just paid £23,000 to make up our shortfall for the year 2005 plus our projected shortfall for 2006. This can hardly be called living within our allocation. It all seems to be getting more and more remote… yet it gets potentially more and more costly.”

Miss Brayford replied: “The education sector also feel aggrieved.”

Another manager from Epsom and St Helier complained that the cost of the scheme for 2005 including admin is “circa £28,000. Had we spent that money on upgrading lighting installations, say, we could have put an additional recurring £10,000 per annum of public money towards patient care and reduced national CO2 emissions by circa 8 tons per annum.”

Neil O’Brien, the director of Open Europe, said: “Only the EU could have come up with an environmental policy that takes money from the NHS and gives it to big oil companies.”

Tomorrow, Mr Gove will raise a Commons point of order accusing the Government of misleading Parliament. He said: “The only conclusion we can draw is that they were so embarrassed by the amount of public money that is going on this scheme that they suppressed the truth.
 
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