New arrangements to supply gas to public bodies will save the Scottish government millions.

The contract, worth around £80 million a year from April 2010, has been awarded to Total Gas and Power (Total GP) after a competitive tender.

The public sector will benefit by around £5 million a year through flexible bulk buying on the wholesale market.

The contract also provides access to energy management measures to improve energy efficiency and cut demand.

Finance Secretary John Swinney said: "Every pound the public sector spends must represent maximum value for the taxpayer and the way we buy goods and services must make its contribution. This is yet another example of our radical procurement reform programme delivering results.

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"Collaborating across public bodies creates efficiencies and we are taking every opportunity to secure the benefits of closer working. Procurement Scotland will buy gas through Total GP on the wholesale market for the whole of the public sector, giving budgeting certainty. The contract also offers access to energy demand measures, such as automated meter reading, to help bodies become more energy efficient, cut emissions - and save money."

Total Gas and Power Director John Shead said: "We are delighted to have won the contract to supply Scotland's public sector with gas. For some years we have been developing our products and services for the public sector and the award of this contract cements our position as the leading public sector supplier across the UK.

"We are committed to supporting our new Scottish public sector customers with innovative products and services designed to help them optimize their procurement of gas and move towards greater energy efficiency across their estate."

(GK/KMcA)