Despite continued warnings, many energy suppliers, brokers and consultants still fail to understand the specific needs of the adult social care sector—costing providers time, money, and unnecessary stress.
For over two years, Care England has been running an open care sector tender and provided the best possible value, lowest priced energy for care providers 100% of the time with a 100% renewal rate, by leveraging the power of energy purchased by the care sector only (see here for details).
In this article, Care England outlines the most common issues we see time and again: from contracts that don’t align across sites, outdated meter types, and unnecessary deposits, to excessive standing charges, hidden fees, and VAT wrongly charged at 20% instead of 5%.
Care providers are still taken advantage of when purchasing energy and we want to share the common issues and challenges which continue to need resolving due to energy suppliers, energy consultants and energy brokers failing to do their jobs correctly, and where they continue to fail care providers, who end up picking up unnecessary and avoidable costs, or incur additional administration and general inconvenience.
Many challenges are either due to the energy supplier not offering the best solution for the care provider, or a broker/consultant because they are either inexperienced in the care sector, or unwilling to put the effort in to arrange the most appropriate supply for care providers and treat them as a generic customer with a profile that does not match the 24/7 consumption profile of a care service.
Most energy brokers and consultants work from predefined ‘price books’ set by the energy supplier. Energy suppliers offer energy contracts to care homes on the same rates as retail, hairdressers and other businesses which do not share the same energy profiles and thus can end up costing the care home more than it should.
Below are some of the key problems providers have encountered:
Contract End Dates
Aligning energy contracts to end on the same date offers several benefits:
- Simplifies contract management
- Reduces admin time and bank charges
- Enables less frequent renewals
- Allows for “blended rates”, where all supplies—regardless of size—receive the same unit price
For example, a provider with three homes of 8, 30, and 50 beds can secure the same rate across all locations, benefiting even the smallest site.
Common Issues:
- Quotes for non-standard durations (e.g., not 1, 2, or 3 years) take longer to obtain and are unavailable from some suppliers.
- New contracts starting from the transfer date rather than the requested alignment date.
- Brokers failing to identify suppliers who can shorten the contract date for late transferring supplies to ensure aligned end dates.
Care providers should be able to ensure that all end dates align whenever possible, which requires sector-specific knowledge of a broker who truly understands the care sector.
Mixed Electricity Meter Types
Electricity meters are identified by a number called the MPAN. The profile type (top left of the MPAN) is usually:
- 00, 03, or 04 for commercial use in care settings
- 01 or 02 for domestic use, typically in staff accommodation
The black line covers 3 digits, which due to confidentiality could identify the supply.
Problems arise when:
- Suppliers cannot combine domestic and commercial meters on the same contract.
- Providers are placed with a supplier who accepts domestic meters for all supplies, resulting in significantly higher costs.
- Meters with profiles 05, 06, 07, or 08 should have been upgraded long ago. These outdated meters limit supply options and drive-up costs.
If an energy supplier, broker or consultant has not addressed these issues, then they are not working in the care provider’s best interest.
Energy Contract Deposits
Some suppliers, brokers and consultants request deposits when arranging energy contracts and should be challenged:
- No deposits have ever been required under the Care England Energy Tender.
- Credit-approved, competitively priced quotes should be securely provided without upfront payments.
An experienced, care-aware supplier, broker or consultant should be able to do the same. If they cannot, then questions should be asked if they are operating in the best interest of the care provider.
Tolerance Clauses
Energy contracts include tolerance clauses, which can charge penalties if actual usage strays beyond a certain range of the estimated consumption.
Typical tolerances can be ±10%, which can easily be exceeded by the care provider during a very cold winter or a hot summer.
Contracts should be negotiated to either remove tolerance clauses or amended with tolerances of 20–25%, ensuring providers aren’t penalised.
High or Low Standing Charges
Providers are sometimes steered toward contracts with low daily standing charges. However, this isn’t always the most cost-effective option.
What really matters is the total annual cost based on accurate usage. It is therefore essential that quotes are based on:
- Official consumption data
- Cross-checked with sector knowledge
- Assured accuracy, which builds trust with energy suppliers and reduces the risk of tolerance penalties
Energy Bills Without Meter Readings
Due to the lack of transparency and possibility of overpaying, energy suppliers that issue bills without readings are avoided.
Quotes with Hidden Extras
Quotes should be checked to ensure that the figures quoted cover everything. They may have extras for pass through charges, meter reading fees and a host of other charges under different names. Care providers should demand an email from the broker/consultant that states the annual cost in £’s and that the figure is fully inclusive and fixed with no extra charges is provided as a form of protection.
VAT Charged at 20% Instead of 5%
Care providers are still being charged 20% VAT when they should only be paying 5%, based on eligibility.
It’s vital that:
- The correct VAT rate is applied from the beginning of the contract.
- The broker or consultant handles this upfront by completing the necessary paperwork.
Recovering overpaid VAT is far more difficult after a contract ends. If this has occurred, care providers may be able to recover overpaid VAT through the Care England tender process.
Need Help or Have Questions?
If you’ve encountered any of the issues above—or want to ensure your energy strategy is working for you — please reach out to Care England who are here to help care providers cut costs, save time, and avoid hassle with sector-specific energy expertise. Complete the following form and our experts will reach out to you directly: https://www.careengland.org.uk/energy-tender-expression-of-interest/
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