Treatment of Existing Utilities Contracts

129  If the Local Authority can demonstrate (in accordance with its duty to provide Best Value) that it can achieve more economic prices and that the costs of administration are lower than those of the Service Provider.

130  The Local Authority's existing energy contract(s) may span financial close and service commencement.  If the Service Provider is responsible for procuring the utilities under the contract, then the Local Authority should review the value for money offered by the existing contractual arrangements in comparison with those proposed by the Service Provider.  

131  As part of this review, the Local Authority should consider whether they are able to assign the existing contract to the Service Provider, and/or the impact of early termination including the potential liability of any breakage costs.  

132  Where the Service Provider can offer a better arrangement than the existing contract, these arrangements should be terminated at a time that achieves the best balance between the costs of termination and the reduced costs of the new arrangements.  Where, as a result of competitive pricing or high breakage costs, the existing contract offers better value for money, then it should remain in place until it expires.