Richard Cohen has today replied to SOS Chair Richard Thurlow, as follows:
Thank you for your enquiry regarding the comparison of Annual Running Costs.
You are correct that during year one the differential in electricity and gas costs when comparing the Knowle with proposed new office at Heathpark and a refurbishment of Exmouth Town Hall is £50,200. Using a 2% pa general increase for inflation, but with 10% pa for electricity and gas the difference progressively increases to some £366,000 by year twenty.
Also, please be aware that in addition to electricity and gas costs there are other elements including Business Rates, Maintenance (planned, reactive, grounds), insurances and other running costs that have also been taken into consideration.
Deputy Chief Executive
East Devon District Council
Mr Thurlow’s original letter (5th Dec 2014) is copied here:
Dear Mr Cohen,
Your report to Cabinet, of 3/12/2014, (Agenda item 11), contained the statement:
Knowle has annual energy costs of £83,900 pa compared to a predicted energy cost for
Honiton/Exmouth combined of £33,700 pa.Even after repairs, Knowle energy costs would
still be double those of the Honiton/Exmouth alternative.
Based on Dept. of Energy and Climate Change (DECC) current fuel price indices, gas has
increased on average 18.8% pa between 2003 and 2013 whilst over the same period,
electricity has increased on average by 11.9% pa. Allowing a modest 10% pa inflation rate
for energy and 2% for general inflation, the total savings in running costs of
Honiton/Exmouth over Knowle are of the order of £5.55m over 20 years
The difference between the two costs is about £50,000 pa.
Please let me know how this adds up to a saving of £5.55m over 20 years, even allowing for hypothetical increases over 20 years.