Thursday 23 May 2024
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Enviroenergy: Strategic review advice to cost £250,000

Consultants which will cost the taxpayer just under £250,000 are being employed to give advice to Nottingham City Council on its Enviroenergy district heating network.

Nottingham’s district heating system, the largest in the UK, involves waste burned at the Eastcroft Incinerator being converted into heat and hot water for thousands of homes in St Ann’s and more than 100 commercial properties in the city.

The network was previously run externally by the council as Enviroenergy, but the  authority brought the company in-house at the end of 2021 at a cost of £500,000.

Having now been brought back under the council’s full control, the authority says it requires specialist advice to help officers conduct a strategic review of the network, including the renewal of contracts.

All council-owned companies have been undergoing a series of reviews as part of improvement and transformation work, as instructed by the Government-appointed improvement board which continues to monitor operations.

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However, the council says it does not have the expertise in its current workforce to adequately conduct the review.

Delegated decision documents, published on May 16, say: “There is a need to engage consultants to provide specialist legal, technical, financial and other advice to council officers undertaking the District Heating and Waste Disposal Strategic Review.

“Contracts to provide energy to the district heating system and for the city’s waste disposal needs are due for renewal.

“Specialist advice and support not available within the council is required.

“The advice will inform the review, a report on which is scheduled for consideration by Executive Board in Autumn 2023.”

Enviroenergy had previously been given a series of loans by the council before it was brought in-house.

At the time of the decision to bring it back under direct control in 2021, around £11m of loans remained unpaid.

However, the council argued Enviroenergy has been profitable since 2013, with the exception of 2017, and the system saves the authority around £5m a year by reducing the amount of waste it has to send to landfill.

The review comes as the council says the huge network of pipes, and its associated systems, need £17.5m of investment between now and 2026.

More than £4m is already being spent on updating outdated energy meters and the billing system, to allow customers to pay online.

Around 95 per cent of domestic properties on the district heating network have an outdated prepayment meter installed, and parts to repair these systems are now obsolete.

The council also decided to increase the price of its tariffs towards the end of last year, meaning the average Enviroenergy customer in Nottingham will see their yearly energy bill rise by £86.

Cllr Kevin Clarke, the leader of the Nottingham Independents opposition party, told the Local Democracy Reporting Service: “It is a pity they do not hire the experience and instead keep having to rely on consultants.

“It makes you question have they got the right officers in there? Have they got the right training?

“Some of them are not on pennies. It is crazy to me.”

Leader of the council, Cllr David Mellen (Lab) has previously said the employment of consultants may seem “counter-intuitive”.

However he says often the work is for shorter periods only, and as such it makes “more economic sense to have people working on these specific projects with temporary contracts rather than as permanent staff so they can drive and direct the required changes which will leave us a better, more efficient council.”

Documents also state legal work will be done by law firm Bevan Brittan, which has previously supported the council in matters “closely linked” to the heating network.

The appointment will provide “some continuity and value based on their existing understanding of some of the issues,” documents add.

Funding for the appointments will be met from existing residents’ services budgets, after the council says it “overachieved” in the amount of income generated through the sale of electricity to the National Grid.

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