The average cost of cremation currently is just below the £700 mark. The cost of the fuel for the cremation is around £30.
What! I hear you cry that is outrageous! Well yes, but it is not quite as simple as that. The question is are we being ripped off? Or are we getting value for money?
In a BBC article from 2015 in quoted the following:
The cost of cremation at Mortlake Crematorium was £500
Cost of cremation breaks down as follows:
Spent on staffing £181
Profit allocated to improvements £163
Building maintenance, supplies, services and regulatory costs £127
Fee for fuel £29
So even with a relatively modest fee of £500 there is a profit. So what do Dignity (the main private crematoria operator) make from their activities, Surely they must be making a profit otherwise why would they be in business?
Their annual report for 2106 make interesting reading.
“The Group remains the largest single operator of crematoria in Britain, operating 39 (2014:39) crematoria as at 25 December 2015. The Group performed 57,700 cremations (2014: 53,400) in the period, representing 9.8 per cent (2014: 9.7 per cent) of total estimated deaths in Britain.
Underlying operating profit was £34.6 million (2014: £29.1million), an increase of19 per cent.
This operating performance is driven by increasing average revenues per cremation, which has been assisted by the increase in the number of cremations performed in the year. Sales of memorials and other items have been strong, equating to approximately £276 per cremation compared to £262 in the previous period.
Progress and Developments
Investment of £0.1 million has been made to develop a location that was acquired from a local authority in 2012. A further £0.8 million is expected to be incurred in 2016 to complete the local authority development. The Group has also invested £2.5 million maintaining its locations in the period.
So looking at their figures they earn £1107 per cremation of which £607 is profit. Let us be clear this is profit for all their crematoria based services, so as well as the actual cremation this includes memorials, burial plots, etc. They declared that that make £276 per customer from memorial products, so if we assume they make 40% profit from these. The profit for each cremation would be around £500.
Now again this £500 isn’t profit profit, this is before loads of things have been deducted, not least wages and tax. Also the purpose of the annual report is to make thing look rosy for shareholders and investors. Nether-the-less this is significant.
In addition, I would say, private organisations generally tend to run a tighter ship than local authorities. So we can assume that local authorities running cost will be higher too. But still local authorities on the whole should be making a reasonably significant profit.
Now to the vexing question of cost of regulatory compliance. Many authorities claim their rising cost relate to the need to install more sophisticated abatement equipment to deal with their emissions.
From the BBC article, a spokesman for Northumberland County Council said “£1.8m was being invested in new air pollution control equipment to comply with increasingly stringent environmental legislation”. So there is large cost associated with environmental compliance although the article also points another spokesman who states “Because it has not yet installed the newer pollutant filters, the council must pay a £53 government-imposed levy per cremation.“ which a) is slightly concerning implying many have not yet installed this equipment and b) emission compliance cost represent less than 10% of cost.
So my conclusion is, from this limited information: there is money in cremation, not perhaps as much as some may think, but still a heck of a lot.