Excessive Energy Costs Challenged Service Charges Reduced by £695,000

Excessive Energy Costs Challenged Service Charges Reduced by £695,000

Miranda Toben, Associate, shares two recent case studies where we successfully challenged excessive budget increases relating to energy costs resulting in reductions totalling £695,000.

Our proactive approach and persistent engagement with Managing Agents results in substantial savings for our clients.  These case studies highlight the significance of our detailed budget analysis, utilisation of data held on Verivi, persistent communication, and protracted negotiations to optimise cost control for our clients.

In the first case study, we discovered a significant surge in utility expenses, electricity costs rising by 400% and gas costs by 325% within the budget.  We promptly expressed our concerns to the Managing Agent to understand the underlying reasons for the increases.  The Managing Agent liaised with the Landlord who also expressed dissatisfaction with the increases, who in turn initiated a review by their procurement team.   We applied pressure, withheld uplifts, and engaged in strategic negotiations.  This resulted in a revised budget being issued, reducing energy costs by £640,000.

The second case study involved an unrealistic increase in electricity costs, escalating from £6,000 to £89,600. We challenged the increase with the Managing Agent, who initially defended the increased as accurate.  However, through our tenacious engagement, when the Managing Agent reconciled the account for the previous year, they realised an error had been made where the Landlords supply was tapped into during another tenant’s fit-out and the costs included in the common electricity.  This usage inflated the costs, impacting the budgeting process.  The error was confirmed with the budget too, and a revised budget was issued, reducing the electricity costs to £10,000, resulting in an overall reduction of £55,000.

These case studies highlight the invaluable role of our expertise in minimising costs for occupiers.  By conducting thorough budget analysis, leveraging the data available on Verivi, and fostering collaborative efforts in cost control, we have effectively mitigated budget increases of a staggering £695,000 combined in these two cases.

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