Nottingham City Council has decided to spend £1.3 million on improvements for an energy company it took in-house last year.
A ‘delegated decision’ to spend the money – meaning it can be spent without holding a public council meeting – was made on Tuesday, 25 January.
The authority said the decision needed to be made quickly because the work required needs to start without delay.
The authority decided to bring Enviroenergy, based on London Road, in-house at the end of 2021. The transfer cost taxpayers about £500,000.
The council liquidated the company it had owned since 2001 and took over its operations.
It currently provides water and heating to about 5,000 Nottingham homes and 70 businesses.
The council says bringing Enviroenergy in-house is the ‘best way forward’ and is worth it because it saves the council £5m a year through cutting the amount of waste it has to take to landfill.
Waste is instead sent to the Eastcroft Incinerator on London Road and the power generated from the steam is then sold to Enviroenergy customers to heat their homes.
But the city council says the company needs around £17.5m of investment in its pipe network and technology so it can continue to provide services to its current customers.
The upgrades – including boilers, meters, pipes and pumps and the customer billing systems – will be carried out between 2022 and 2026.
The council said closing down the Enviroenergy heating system was not an option as the complexity of the infrastructure means its 5,000 customers cannot immediately receive energy from other providers.
In a delegated decision on Tuesday, 25 January, the council authorised £1.3m to be spent on essential health and safety works. The full cost of Enviroenergy’s capital programme will be revealed this March.
The council said the £1.3m decision needed to be made “urgently” and that a call-in period would result in “a delay in making the decision” and would mean “the statutory work would miss the required timescales”.
The report states: “On December 1, 2021, the district heating business formerly operated by Enviroenergy Limited was transferred in house.
“Accordingly, the council is now fully responsible for the operation of the business and the network.
“This includes the safe operation of the heat station located at London Road.
“The council is subject to its statutory obligations in respect of any health and safety requirements for the heat station.
“The proposed decision is to broaden the remit of the approved rolling scheme for maintenance to allow the budget to be used for any necessary health and safety works to the heat station.
“There are no legal concerns arising from this element of the proposal and legal advice is that such works, if necessary, must be carried out in order for the council to meet its statutory requirements as both an operator and also an employer.
“Authority is also being sought to allow for the procurement of any necessary works and again this raises no legal concerns and is supported.”
The spending comes at a time when the council needs to save £38m over the next four years. Cost-cutting measures include plans to close six children’s centres, reduce youth provision, and close three libraries.
Cllr Andrew Rule, leader of the opposition Conservative Group, said: “We already know Enviroenergy is in the capital programme for considerable expenditure and time will tell. It should never have been set up as a company in the first place.”