Agenda item

Report of the Portfolio Holder for Energy, Environment and Democratic Services and the Portfolio Holder for Planning, Housing and Heritage.

The Leader of the Council agreed that this item, although not on the agenda, could be considered as a matter of urgency in accordance with Section 100B(4)(b) of the Local Government Act 1972 in order to meet externally imposed deadlines for accessing funding.

The Board considered the report of the Portfolio Holder for Energy, Environment and Democratic Services proposing a further rollout of the Energiesprong initiative, making whole house interventions to achieve net-zero carbon emission standards.  The Portfolio Holder highlighted the following information:

(a)  the pilot scheme in Sneinton was very successful but small scale and therefore it is being extended to Radford and Clifton;

(b)  the initiative will be funded through the Housing Revenue Account and a £5.7million grant from Government;

(c)  262 properties will be retro-fitted as part of the initiative and become carbon-neutral; 

(d)  as the initiative expands, the costs of retro-fitting each home will reduce making the approach more affordable;

(e)  the initiative is developing cutting-edge expertise that will be of national benefit;

(f)  the initiative will create local construction jobs.

RESOLVED to

(1)  note the progress made on the Energiesprong project delivery and the impact made on both carbon reduction and fuel poverty;

(2)  approve acceptance of grants totalling £5.7million, via the Department for Business, Energy and Industrial Strategy (BEIS) Whole House Retrofit and Interreg North West Europe MUSTBE0 and delegate authority to the Head of Energy Services to sign a contract with BEIS to accept the grant;

(3)  include in the Public Sector Housing Capital Programme additional retrofit schemes to the value of £14.2million funded by grant and Major Repairs Reserve contributions from the Housing Revenue Account, subject to sign off by the Section 151 Officer of the business case as detailed in the financial comments at section 4 of the report;

(4)  delegate authority to the Corporate Director for Commercial and Operations in consultation with the Corporate Director for Development and Growth and the Portfolio Holders with responsibility for housing and energy to agree the procurement route, and following that to appoint the principal contractor and other contracts as necessary, approving dispensation from financial regulations to negotiate and award contracts to specialist suppliers named in the report;

(5)  approve the establishment of a multi-agency project board as set out in the report to lead the programme; and

(6)  to agree the leaseholder expenditure as set out in the exempt appendix to the report.

Reasons for decision

To meet its 2028 carbon neutral commitment, the Council has to make significant improvements to the majority of the domestic properties in the City.  The current costs for achieving higher standards are prohibitive and therefore a Government grant has been provided.  However, to ensure the initiative is scalable and can become an integral part of the City’s carbon reduction programme the unit cost must be reduced and how this can be achieved is an essential part of this project.

The project will whole-house energy retrofit 262 properties.  The precise measures used will be individual to each property. There will be a chance to develop and test new methodologies of getting to the same energy solutions, using similar measures and components.

Energiesprong is a model which focuses on achieving net zero energy retrofits through offsite manufacture, and driving innovation to reduce cost.  It also has a business case which can be used to make the cost of delivering work self-financing.  The model is new to the UK, and the initiative will test ways to adapt the model to achieve similar energy standards at lower cost.  It should also be able to deliver measures incrementally on some properties, which would reduce cost.  Opportunities for insourcing work, creating new jobs and training will be maximised.

Other options considered

The option to do nothing was rejected because the City has committed to being carbon neutral by 2028.  The projects enable the Council to develop cost reduction strategies and asset management plans about how best to achieve this target, whilst ensuring tenants are protected from fuel poverty.  Housing Revenue Account match funding has been allocated to this project and consideration was given to utilising this funding in a different way.  This was rejected because the benefits are holistic, scalable and guarantee standards for 30 years.

The incremental approach to installing ‘low hanging fruit’ energy efficiency measures will not achieve zero carbon standards.  This piecemeal approach costs the local authority or housing association more and leads to non-compatible solutions being procured separately and therefore was rejected. 

Whilst the cost for each home as part of this initiative is currently high (approximately £55,000), the budget is funded with the following:

·  money which is already allocated against those particular properties, within the 30 year Housing Revenue Account programme, with the cost of borrowing included on an ‘invest to save’ basis

·  additional revenues which are generated through the solutions

·  grant funding to bridge the gap between the total of the income and savings and the current cost.

As a result the project is cost neutral to the Housing Revenue Account.  Increasing in scale of deployment will mean costs reduce therefore reducing the cost of delivering the same high levels of energy performance to all properties, meaning a reducing amount of grant will be required.  Other projects using Housing Revenue Account funds will not provide the cost effectiveness and impact of the Deep Retrofit approaches.  These will deliver 2050 standards now, achieving the highest carbon saving possible in a cost effective and efficient way.