Healthcare organisations across the UK face a common challenge: reducing carbon emissions while managing ageing estate infrastructure with increasing financial pressures. The RE:FIT Carbon and Energy Performance Contracting Framework enables public sector organisations to deliver energy efficiency and decarbonisation projects with guaranteed performance outcomes. Since 2016, £576m has been invested in capital projects procured through the RE:FIT framework, helping authorities reduce their level of greenhouse gas (GHG) emissions by over 650ktCO2e, and save over £34m per annum in energy costs.
One of the authorities which has benefited from using RE:FIT is Powys Teaching Health Board. The Board manages a dispersed estate that includes nine community hospitals 11 clinical sites. I supported the Health Board on their RE:FIT journey, as project lead from Local Partnerships.
The challenge
Following the Welsh Government’s declaration of a climate emergency in 2019, and the subsequent ambition for the public sector to be Net Zero by 2030, NHS organisations were required to accelerate decarbonisation efforts. For Powys, this presented significant challenges.
Over half of its buildings pre-dated the 1940s. Several sites were listed buildings or had additional constraints relating to environmental protections. The Health Board needed to reduce emissions and improve infrastructure but lacked the capital funding required for large-scale restate renewal, so required a commercially viable and flexible approach.
The solution
In 2021, the Welsh Government Energy Service recommended that Powys speak to Local Partnerships about the RE:FIT framework and seek support from Salix Finance ‘Invest to Save’ programme. The Health Board secured the support of relevant stakeholders to initiate the RE:FIT project, align project objectives and secure funding support, creating a strong foundation for the project.
In 2022, I supported the Health Board in producing an Invitation to Tender, which stated that it wanted a partner capable of improving the energy performance of its estate through measured and verified efficiency improvements and renewable energy generation. Following a robust procurement process, Vital Energi was appointed.
The contractor and Powys produced a High Level Appraisal; then an Investment Grade Proposal was developed, containing detailed performance and savings guarantees, both reviewed by Local Partnerships before proceeding to contract.
Funding of £4.3m, inclusive of VAT and fees, was secured from Salix Finance, and works began in late 2024. The programme included the installation of solar panels, LED lighting improving insulation and pipework. Local contractors were used as far as possible, reflecting the project’s commitment to social value and local economic benefit.
The impact
The partnership between Powys and Vital Energi is now delivering both carbon and financial savings across the Health Board’s estate. The programme is also helping to improve building resilience, reduce maintenance requirements and support the long-term sustainability of healthcare facilities throughout Powys.
Anthony Fenn, Head of Technical Services at the Health Board, highlighted the value of the guaranteed outcomes: “The guarantees from Vital Energi in relation to double digit carbon and energy savings, and savings on our revenue bottom line, are great. The funding from the Welsh Government has been very helpful, and Local Partnerships held our hands along the way to ensure a joined up approach.”
Lessons for other NHS estates
Several important lessons emerge from the Powys experience.
- Ageing estates do not need to wait for complete redevelopment before beginning decarbonisation. A portfolio approach can identify a range of smaller interventions that collectively deliver significant carbon and efficiency improvements.
- Combining multiple energy and renewable energy measures within a single programme can reduce the burden on estates teams compared with procuring and managing a series of individual projects.
- The performance guarantees available through the RE:FIT model can provide confidence when committing capital to energy projects. With NHS organisations under considerable pressure to demonstrate value for money from every investment, this is particularly relevant.
- External expertise can help organisations navigate what can otherwise be a complex process – from identifying opportunities and developing the business case through procurement and technical review to implementation.
Looking ahead
From my perspective, supporting Powys through the RE:FIT process demonstrated the value of established templates for procurement and contract documents and strong public-private sector collaboration. What began as an exploration of what might be possible has become a programme delivering tangible benefits for patients, staff and the wider public sector.
With the latest iteration of the RE:FIT framework now available exclusively to public sector organisations across the UK and Northern Ireland, I’m looking forward to helping more clients accelerate decarbonisation, improve estate performance and reduce costs through a proven delivery model. The latest iteration of RE:FIT also offers quicker routes to market and into construction, higher quality investment business cases, and more robust measurement and verification processes.
If you wish to develop and deliver a project or programme of work, please contact Local Partnerships at refit@localpartnerships.gov.uk. If most of your premises are in Greater London, please contact zca@london.gov.uk.
Local Partnerships is the exclusive facilitating organisation supporting public authorities outside London in accessing and using the RE:FIT framework. The Greater London Authority owns the RE:FIT framework and supports authorities in London.