The 2027 care energy budget: a practical guide for owners and managers

Start with your home, not a national percentage

A care-home owner sees a forecast increase in electricity network charges and asks a reasonable question: how much more should we budget? The answer begins with the home’s agreement, not the percentage in a headline. Different parts of the bill can change for different reasons, and an organisation may have several supplies with different terms.

Begin with three documents: a recent invoice, the full supply agreement including its price schedule, and twelve months of meter readings or consumption records. Ask your supplier for anything missing. For a group, collect these for each supply and record which organisation pays. You can start this review without learning tariff calculations. The first outcome is an explanation of the bill that agrees with the documents.

Understand the five parts of the bill

Think of the electricity bill as five connected costs: the energy purchased, the networks used to deliver it, the work of keeping the system balanced, other contractual or policy costs, and tax. Your supplier may bundle these into a unit rate and standing charge or show separate items. Ask for an explanation that reconciles to the total, without counting a bundled charge twice.

Transmission Network Use of System, usually shortened to TNUoS, pays towards the high-voltage transmission network. It is one component of the bill. In its October forecast, the National Energy System Operator (NESO) describes much of the demand charge as daily amounts for each site, with additional location-related elements. These published network tariffs are not the same as a supplier’s all-in standing charge. ^[1]

The practical implication is important: reducing electricity use may reduce the energy component while leaving a fixed daily network component unchanged. That does not make efficiency pointless. It means the saving must be calculated against the charges the action actually avoids, rather than applying a consumption reduction to the entire invoice.

Find out which costs can change

Ask your supplier or broker: which parts of this agreement are fixed, for how long, and which can be updated, reconciled or passed through? Ofgem describes fixed-rate contracts as fixing unit rates and standing charges. Its more detailed guidance also notes that some agreements contain conditions allowing rates to change. Ask what is included in your particular fixed price and request the relevant clause for any claimed exception. Do not assume that a national charge forecast overrides an agreed price. ^[5]

Ofgem’s business-contract guidance asks customers to check the contract type, term, fees, protections and what happens when it ends. Its intermediary guidance supports clear principal terms, market coverage and remuneration, while distinguishing its developing regulatory framework from current requirements. A useful specialist should make those matters easier to understand. ^{[2] [3]}

For a group, compare every site’s end date and charging treatment before assuming one purchasing decision covers the estate. Include landlord-billed locations and recently acquired homes. Establish who has authority to sign and whether the legal customer matches the service being reviewed. An incomplete site register is a practical obstacle to a reliable budget.

What would an increase mean in pounds?

Consider a fictional annual electricity bill of £40,000, containing £5,000 of charges exposed to a particular change. If that element rose by an assumed 20%, with every other cost unchanged, the additional cost would be £1,000. The resulting £41,000 bill is 2.5% higher, not 20% higher. This is arithmetic using invented inputs, not a forecast or a typical care-home bill.

The example assumes the change reaches the customer in full for a complete year. A real agreement might absorb it, apply it only at renewal, or calculate it differently. Quantity, tax and other charges may also change. Ask the specialist to identify the affected amount first, explain the timing and show the calculation before putting a percentage into the board paper.

From a headline to your budget

A change to one cost is not the same as a change to the whole bill

Your next question: which part of our bill is affected, and when would the change reach us? Ask for the answer in pounds and the contract clause supporting it.

Ask which charging band applies to each supply

NESO’s forecast tables contain different daily amounts for different bands. The accompanying evidence panel translates a small selection into annual amounts so readers can see why the assigned band matters. The original codes are available in an expandable evidence note. They do not describe types or sizes of care home, and you do not need to select one yourself. ^[1]

A charging band is a category used to allocate a fixed network cost. Ask the supplier to confirm yours, the basis for it and how its cost appears in the agreement. Ask: is the published amount included in our price, or can it be charged separately? Do not choose the cheapest table row or assume that a recent fall in consumption immediately changes the band. If the record appears inconsistent with the site, request a documented investigation through the appropriate supplier or network route.

Any proposal to change agreed electrical capacity needs competent assessment of the building’s real demands and planned equipment. A future heating project, kitchen alteration or extension may need that capacity. A smaller charge is not a sound outcome if it leaves the service unable to operate safely or creates avoidable future costs.

Build a consumption forecast around care

Gather twelve months of reliable electricity and gas quantities, separating actual and estimated readings. Then explain what will differ in 2027: occupied rooms, nursing needs, opening or closing areas, laundry arrangements, hot-water use, catering and new equipment. For homecare offices or supported living, establish which energy costs the organisation controls before importing a residential-home model.

Use overnight and weekend records to investigate unexplained use. Care runs around the clock, so an overnight load is not automatically waste. Ask the manager and maintenance lead which equipment must operate, which schedules look wrong and what checks can be made without compromising warmth, ventilation, water safety or clinical needs. Record any intervention and verify its effect.

National statistics can provide context, but comparisons need discipline. The Department for Energy Security and Net Zero’s September 2026 release covers 2024 consumption in England and Wales and uses broad building categories. Its supporting tables label Health, rather than providing a named care-home category. We have not turned that category into a care-home target or a claim about what your service should consume. ^[4]

For your own estate, compare like periods and explain differences in floor area, occupancy, service and heating fuel. Energy per square metre or occupied bed can prompt questions, but a lower figure does not by itself prove better performance. Keep electricity and gas separate, and investigate the reason before setting a reduction target.

Reduce waste while protecting the care day

Start with faults and mismatched settings: lights in empty areas, failed sensors, equipment left on unnecessarily or heating schedules that do not fit how a room is used. Ask a competent maintenance lead to check them with the manager. Record the change, resident feedback and subsequent consumption before deciding whether it worked.

Energy savings must sit alongside safe care. The Care Quality Commission’s England premises guidance retains provider responsibility when maintenance is contracted out. Health and Safety Executive guidance links hot-water management with both scalding and legionella risks. Do not change water-safety settings to meet a budget target. Use the home’s established safety arrangements and competent advice. ^{[6] [7]}

Build a budget with room for uncertainty

Use current contracted costs where they apply. Identify the period needing a new quotation, the charges still uncertain and the assumptions behind them. Keep tax treatment separate, including the Budget developments covered in our preceding feature. Show an alternative outcome for the unresolved element, with the assumption named, rather than presenting a single precise total as certain.

Before approval, reconcile the annual plan to individual sites and ask how actual invoices will be checked against it. Where a bill rises, ask first whether the quantity, rate, billing days, tax or a correction changed. Give each unexplained difference an owner and a date. A practical review can finish with a confirmed position, an evidenced correction or a well-defined question for support. It should not finish with an unsupported promise that energy will become cheaper.

The next conversation should be easier

Send the questions below to the supplier, broker or internal finance lead. Ask for plain answers, the documents supporting them and a named person to resolve exceptions. Professional support can add considerable value through a clear charging explanation, comparable quotations and follow-through on billing issues. Agree its scope and fees before work begins.

Bring the completed record to the board with the options, uncertainties and next review date. Retain the original quotation and calculation so later results can be explained. That is the practical meaning of budget confidence: leaders understand the assumptions, know which costs could change and can identify what to do next.

For the next leadership meeting

Questions to resolve.

1. Can we explain the proposed budget without relying on an unexplained percentage?
2. Which question needs specialist support, and what evidence will that support deliver?