Why the NHS has little faith in lighting finance schemes

LONDON-- A lack of confidence in finance schemes is holding back lighting upgrades in the healthcare sector, according to experts speaking at LuxLive today.

Myles McCarthy, director of implementation at the Carbon Trust, told a panel discussion at LuxLive that there was ‘no shortage of money available, just a shortage of projects’.

Because of the public funding that supports it, the NHS would be a ‘low-risk’ client for the Carbon Trust, which in conjunction with Siemens Financial Services has made £550 million available in ‘green financing’ to help all types of organisation reduce their energy use. As such, the NHS is eligible for ‘competitive, flexible forms of funding’, said McCarthy. ‘Given the relatively short payback times associated with lighting, the savings are compelling and the finance is willing.’

Uptake, however, has been underwhelming. Benita Mehra, director of property at Surrey and Borders NHS Trust, suggested this was because the health service did not have in its ranks the expertise to analyse the loans properly.

‘The NHS is essentially a vast number of small organisations and they can be full of longstanding individuals who tend to shy away from alternative forms of funding. They are used to grants, not interest-free loans, and they are always thinking, “What’s the catch?”’

Tom Harrison of MHA Lighting, a supplier that has worked with the Carbon Trust and Salix Finance, described them as ‘great projects that the public sector is finding difficult to use’.

MHA has gone so far as to enlist the help of a company that specialises in making applications for finance but, more than that, said Harrison, ‘clients need to be shown that the processes involved are actually quite quick’.

Salix Finance was set up a decade ago as a government-funded independent company offering 100 per cent interest-free capital to the public sector to improve energy efficiency and reduce carbon emissions. Head of programmes Paul Smyth told the panel that, in the eight years he has been there, Salix has reduced the length of its application document from 30 pages to two.

McCarthy advised that the Carbon Trust had put together a Green Business Directory of approved suppliers that can help clients with lighting projects choose the right one for them in an increasingly crowded marketplace.

‘We need guidance,’ Mehra confirmed. ‘If I’m borrowing money, I need to know what I am getting in return. That means being sure about the loans and being sure about the claims people are making about product performance in 20 years’ time.’