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  Striving to achieve the next level of growth in turnover and profitability? Business Doctors suggest the Top Tips for continued success.
• Save
  Auditel reviews how to tackle spiralling costs, reduce financial waste and improve operational efficiency to enhance business performance and profitability.
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  Employment Law must be complied with and we show you ways to ensure that you avoid costly mistakes, meet obligations and avoid tribunals.
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  How have businesses prospered? Clydesdale Bank provide examples where collaboration has benefitted health and care businesses.

Event details:

Cost: No Charge (for delegates from a relevant health or care organisation, £30 otherwise)
Date: 18th May 2012
Time: 9.30am to 1.30pm

Marriot Heathrow/Windsor
Ditton Road
Langley Slough
SL3 8PT 

Click here to register for this FREE event.

NRC_13_8_398_401_Management profit

Source: Nursing and Residential Care Journal www.nursingresidentialcare.com

The company is the first of big six to break ranks over the way it manages its electricity trading.Its initiative will begin in earnest on 14 October with the expectation that it will reach 25 per cent during November. The aim is that all of SSE’s electricity supply and demand will be traded in the day ahead market by the end of the current financial year.

SSE argued that this move will significantly improve the liquidity, depth and credibility of the market, and assist in the creation of a robust and tangible pricing index.

SSE is the second largest electricity generator in the UK and last year generated over 47,500GWh of electricity, which represents almost 15 per cent of the UK electricity demand.
Alistair Phillips-Davies, SSE’s generation and supply director, said: “If other energy companies adopt a similar approach, this commitment could lead to a transformation in the wholesale electricity market in Great Britain.
“We believe this commitment represents the most significant change to the GB electricity market since the market arrangements were amended in 2005, to form the current market arrangements known as BETTA.
“Customers have demanded greater transparency around how we operate in the wholesale market. As well as improving liquidity, this approach will also improve the transparency of SSE’s activity in the wholesale market.”
Source: Utility Week

Ofgem ruled that the company had failed to reopen complaints when customers said they had not been resolved.

It added that British Gas had not provided customers with key details about help they could get from the energy ombudsman.

However, the energy company described the ruling as “totally disproportionate” to the issue.

‘Basic failures’

Ofgem also said the energy provider had failed to put in place proper complaint procedures for small business.

“Today’s finding highlights basic failures in British Gas’ customer service, particularly in dealing with some of its small business customers,” said Sarah Harrison at Ofgem.

“We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement.”

But British Gas said the breach was minor when it had 16 million accounts, and its complaints handling procedures had recently been praised by watchdog Consumer Focus.

“However, specifically for our micro-business customers, we acknowledge our service fell short of what they should expect from British Gas, for which we apologise,” a spokesman said.

“We knew we had an issue here, which is why we flagged it to Ofgem. After a £4m investment, we are now confident we meet all of our regulatory requirements.”

Further inquiries

Ofgem said it was also investigating Npower and EDF Energy over the way they handle customer complaints.

Ms Harrison said regulations over dealing with customer complaints had been in place for three years and, although the position was improving, Ofgem wanted to retain focus on the issue.

Scottish Power, Scottish and Southern Energy, EDF Energy and Npower are all being investigated by the regulator for mis-selling.

Ofgem added it was looking into potentially misleading marketing at Scottish Power, and the difference between the company’s standard credit and direct debit tariffs.

Audrey Gallacher, of watchdog Consumer Focus, said that customers were concerned about rising prices, and that should also be on the regulator’s agenda.

“Major questions are still hanging over whether pricing is fair, whether companies mis-sell energy on the doorstep and many others. Ofgem has a big job on its hands, but this is a good sign that it is prepared to step up,” she said.

This is the second time in a month that British Gas has been fined by Ofgem.

At the start of July it was fined £1m for misreporting how much electricity it supplied. This affected its target under the government’s programme for supplying electricity from renewable sources.

The error was made over seven years by British Gas Business, which supplies the company’s business customers.

Source: www.bbc.co.uk

However, despite the pressures in the market, there are a number of things businesses can do to manage and reduce the cost of this expensive business overhead.

1. Don’t bury your head in the sand

There’s an alarming gulf in the price businesses pay for what is essentially the same product. On the whole, it’s passive companies – those who fail to take action on their energy contracts – who wind up paying the biggest tariffs.

2. Get up to speed

Make sure you are up to speed on all aspects of your energy outlay so you don’t end up paying over the odds. At a bare minimum, you should at least find out what type of contract you are on and how much you are paying per unit rate.

3. Take control

Review your utility prices on an annual basis. Barely 15% of small businesses know what rate they are paying for electricity.

4. Don’t fall into the rollover trap

Unlike domestic users, businesses are subject to assumptive renewal contracts that only offer a limited window of opportunity to switch suppliers before being rolled over onto a new contract at a higher rate.

5. Don’t miss your window of opportunity

There’s an incredibly narrow period (sometimes just 30 days) in which to act. Take action before it’s too late by finding out when your contract expires.

6. Shop around

Just 7% of businesses switched energy providers last year, and more than half have never changed suppliers. Loyalty doesn’t count for much when it comes to your utilities so be prepared to switch, and switch often in search of the best possible deal.

7. Don’t be put off

Switching is generally perceived as a complicated, time-consuming process; but the reality couldn’t be further from the truth, especially if you ask the experts.

8. Adopt simple ideas to reduce consumption

In addition to getting better prices, simple ideas can be implemented to reduce energy consumption within your business. Try adopting a switching off policy for lighting and equipment when not in use, turning thermostats down from ‘max’ settings and changing to energy efficiency lighting.

9. Ask the experts

Simplify the energy cost management process by calling on specialist support from an independent savings expert. An impartial advisor will guide you through the utilities minefield, helping to save you valuable time and money in the process. Auditel even offers a no-savings, no-fee service to take the risk away from engaging in our specialist cost management service.

10. Don’t stop at energy

While the headline figures are reserved for energy, managing your costs in this way can also save you money in other business services, such as telecoms and insurance.

The big surprise is that it has taken a year to report on something that most people already knew, and proposes a solution that most sensible organisations in the private, and even third sector, have been practising for years.

The task for the government now is to put the plan into action quickly and effectively, getting the various government departments on board without creating another layer of bureaucracy, whilst simplifying the process for suppliers, especially smaller suppliers, to participate and stimulate competition, and ultimately deliver value to the taxpayer.

All a bit late in the coming, but as they say, better late than never!

The plan, which would require primary legislation, would see the Department for Environment, Food and Rural Affairs (Defra) ditch its existing plan to lower the threshold for the competitive market from 50Ml to 5Ml in favour of the Scottish model, where all non-household customers have been able to choose their supplier since 2008. Wales is unlikely to be involved, given that the Welsh Assembly Government is unconvinced competition will deliver benefits.
Business customers at a recent meeting with Ofwat, which included Asda, BAA, BOC, Boots and the NFU, were eager for change. According to the regulator: “Some customers … would switch to the Scottish model tomorrow if possible. There is a feeling that some [water] companies treat their business customers with arrogance and there is strong support for market forces to be brought to bear.”
Alan Sutherland, chief executive of Scottish regulator Wics and an advocate of competition, confirmed that the Scottish Government supported a single market and praised the potential move as “a step in the right direction”. He noted that many Scottish switchers had been small or geographically spread businesses that would have been ineligible had there been even a 5Ml threshold.
However, Sutherland cautioned: “Unless you change the costs principle [which governs how access prices are calculated], the change could have a relatively marginal impact.” He said the costs principle could be changed either by law or by interpreting the existing legislation differently.
Defra said ministers had not yet made a decision about whether the White Paper would include provisions for replacing the costs principle and, if the 5Ml threshold stood, whether aggregation of premises would be permitted.

Largest businesses keen on competition
The degree to which business customers at the Ofwat meeting supported a single water market straddling Great Britain varied according to their size and structure. There was unanimous support among multi-site customers, who cited single billing and a common approach on water efficiency as particular advantages. Large customers felt a single market was desirable, although they said that simple, accessible market arrangements and a menu of service options were more important than absolute consistency across areas. Smaller customers were eager for Ofwat to ensure that adequate consumer protection measures were put in place – for example,default tariffs.
Source: Utility Week

At the Care Show, Bournemouth International Centre, 29^th and 30^th March 2011, Auditel Cost Management Consultants Kien Lac and Terry Crouch will discuss how to tackle spiralling costs and ultimately sustain or even improve the bottom line performance under these difficult economic conditions.

Their keynote presentation will cover the issues of:

• Why it is important for businesses to control their costs, especially in difficult times
• Why sustainable cost management activity is more effective than a simple cost reduction
• What is ‘financial waste’ and where it can be found
• How to undertake effective Cost Management, through practical case study examples
• The key considerations that any business can apply to help them manage their costs and successfully navigate the challenges now and into the future.

Auditel is the premier independent specialist cost management consultancy in the UK, currently working with over 3,200 businesses – managing and saving millions of pounds of essential business overheads on their behalf.

Kien Lac, who has specialised in cost management throughout his career, says: “Managing and reducing costs routinely and sustainably is a proven and powerful way of optimising any organisation’s profitability. Unfortunately, there are no short-cuts, as effective cost management requires a discipline of continuous analysing, understanding, influencing and monitoring of costs and the drivers of those costs. Not all businesses have the depth of resource or expertise to undertake cost management to this level of rigour. But there are still options for managers of these types of businesses to gain the benefits of proactive cost management without having to dedicate resource or valuable time to it.”

Terry Crouch adds: “We at Auditel, for example, offer a free Business Health Check which provides a thorough examination of all business expenditure and identifies any opportunities for savings and efficiency. Coupled with our performance driven contingency fee model, this means that our service is self-funding, with no up-front fees and no hidden charges, giving clients maximum results with minimum involvement!”

Recent case studies indicate the kind of savings which Auditel has achieved with care organisations:  

• Brunelcare is a provider of accessible care and services for older people and an originator of the Meals on Wheels concept. Auditel identified and realised total savings of £105,500, using processes and industry expertise that the Client would not have had in-house.
• Action Housing & Support is a charitable organisation with 10 offices working with vulnerable and socially excluded people. Total savings to date of £42,855, covering energy and communications.
• JenCare Homes Ltd operates a 56-bed private care home. The first two cost areas reviewed by Auditel alone yielded £11,000 savings a year, with ongoing reviews under way to identify further opportunities for improving efficiency and reducing energy consumption.

Allen Chapman, owner of JenCare Homes Ltd comments: “Trying to keep costs under control is a constant battle. Having Auditel on board is like having an additional team member without the hassle of employer legislation.” Of the £11,000 annual savings achieved on the first two projects, he says: “This money can now be put to much better use, helping towards the cost of maintaining and improving the facilities for the residents.”

At the Care Show, owners, directors and managers of care homes and other care providers with responsibility for optimising profitability in their businesses will find refreshing new ideas and much to encourage and inspire. Kien and Terry are really looking forward to welcoming visitors to their presentation at 12.15pm in the MyBusiness Seminar Theatre or at stand S111 in the Solent Exhibition Hall!

Further information:

Kien Lac:           Tel: 0118 321 4282. Mob: 07793 721993.   E: kien.lac@auditel.co.uk

Terry Crouch: Tel: 01403 241127.  Mob:  07906 024584. E: terry.crouch@auditel.co.uk 

Visit www.careshow.co.uk/bournemouth for full details of the show and booking tickets.

The company that looks after more than 31,000 elderly Britons has been squeezed by higher rent demands from landlords and reduced fees from the local councils who pay for most of its residents.

Southern Cross said it had ditched talks with potential suitors as insiders admitted the firm could struggle to survive until the summer unless landlords agree to renegotiate rents.

That would have a devastating impact on the country’s provision of care for the elderly, as well as hit 45,000 jobs and suggest the dangers of outsourcing frontline healthcare provision to the private sector.

Southern Cross, which runs 752 care homes in the UK, said it was pleading with the Government and local authorities not to boycott its services.

In the last three months of 2010, Southern Cross’s local authority admissions fell 14.7%, although it had more self-funding patients as well as higher admissions direct from the NHS.

The firm said it was “urging government, landlords and commissioners to work co-operatively” during its restructuring process.

Southern Cross added that its lenders, state-backed Lloyds Banking Group and Barclays, were aware it was about to breach its banking covenants, claiming they were supporting its actions to address its problems.

It today hired restructuring firm KPMG for advice and said it was stepping up discussions with landlords “based on a more radical agenda”.

Amid suggestions landlords hadn’t realised the seriousness of the firm’s predicament, Southern Cross said: “The objective of these discussions is to reduce rental costs… and to create the conditions under which new capital can be attracted into the business.”

Chief executive Jamie Buchan has repeatedly warned the Government about the impact of squeezed fees. With some claiming local councils have asked for cuts of more than 20%, Buchan said: “This market is in huge difficulty. Cuts in frontline services and depressed fee levels are putting tremendous pressure across residential care in this country. Everyone in the industry is feeling the pain. Everyone is looking for help.”

Fast rise saw group become one of the biggest players

Southern Cross enjoyed massive expansion in the last 10 years.

As the care home industry saw mass privatisation under the Conservative Government in the 1990s, private equity groups bought up hundreds of homes around the UK. 

Southern became one of the industry’s biggest players and in 2004, buy out giant Blackstone spent £162 million acquiring it from West Private Equity. 

When Blackstone floated the group two years later, analysts flagged up the cash to be made from care homes. The US firm tripled its money as investors looked to cash in on the opportunities from Britain’s ageing population. 

But Southern Cross opted to focus on expansion as a care home operator rather than landlord, acquiring freeholds and selling them on to property groups. That has left it suffering more than industry rivals as the impact of cuts to local authority spending – which makes up about 80% of the group’s revenues – has been worsened by rising rental costs. 

At the end of last year, private equity grew interested in the firm once more. HG Capital, Duke Street and Blackstone were among investors who bought shares amid bid hopes. 

The care industry remains a lucrative area for buy out firms. Royal Bank of Scotland sold The Priory Group, which runs mental health centres, to Advent International in January for £925 million. 

In the meantime, Southern Cross’ reputation has been damaged. In January it had to close a care home in Luton following “serious concerns” expressed by the industry regulator. 

Today, as Southern Cross outlined its last-ditch restructuring plans, it also confirmed all acquisition bids were off the table. 

Company placed on the critical list

Southern Cross wheeled itself from “under observation” into the intensive care unit today. Its admission that rents have become “unsustainable” suggest landlords could force the UK’s largest care homes operator into a company voluntary agreement, or even to collapse.

That would leave 31,000 elderly people homeless and show just how dangerous successive Government policies of outsourcing front-line services could be. 

“These 750 UK care homes are not factories that are failing from lack of demand, but are an essential part of every community which now face ruin due to the combination of privatisation and private equity.” said the GMB union today. 

AssetCo, the owner of London’s fire engines, is still waiting for a much-needed funding injection. 

If that doesn’t happen, how will the capital’s firefighters put out burning buildings? 

Southern Cross has personal problems that make it stand out from rivals. It has been particularly hit by local authority funding cuts because it sold the freeholds on its properties. 

But the whole industry is in trouble. Last week, Bupa wrote down almost a quarter of a billion pounds. 

The industry is pleading for more funding. “So many people die in NHS hospitals – they could be well-cared for in care homes,” said Southern Cross chief executive Jamie Buchan. “There are real opportunities in this market. But it needs better support from the Government.” 

This summer, the Government will publish the results of its Dilnot Commission into funding of the care of older people. 

For Southern Cross, that may be too late. 

Source: London Evening Standard