AGENDA ITEM 4
BOROUGH OF POOLE
ENVIRONMENT OVERVIEW AND SCRUTINY COMMITTEE
4 SEPTEMBER 2014
THE GREEN DEAL: THE BOROUGH OF POOLE’S RESPONSE
PART OF THE PUBLISHED FORWARD PLAN
YES
STATUS (Strategic, Service Delivery Information)
1.
PURPOSE
1.1
To outline the outcomes of the Green Deal Working Party that was tasked by this
Committee to investigate the Borough’s response to the Green Deal.
2.
RECOMMENDATION
2.1
Members are asked to support the recommendations of the Working Party detailed
in 8.1 and to seek Portfolio Holder agreement.
3.
BACKGROUND/INFORMATION
3.1
The Green Deal is the Government’s main scheme to deliver energy efficiency
improvements in homes across Britain. The scheme was launched in the Autumn of
2012 and enables residents to fund measures via an unsecured loan, repaid from
the savings achieved via the household’s energy bill.
3.2
The key principle of the Green Deal is the ‘Golden Rule’. The Golden Rule is that
repayments on the loan must not be greater than the savings expected to be
achieved by the measures installed. This should mean that the resident will be no
worse off as a result of having the measures installed and should be living in a
warmer, more energy efficient home.
3.3
However, the interest charged on a Green Deal Loan, c. 7%, is such that it can be
cheaper to borrow the money in other ways. This, coupled with the long repayment
period on the loans (up to 20 years), has led to a slow and inconsistent uptake of
the scheme.
3.4
As a result of pressures from businesses to ensure a reliable uptake, the
Government has made a number of unexpected alterations and additions to the
scheme. A cash back scheme was introduced and then additional cash back
through a Home Improvement Fund which was subsequently reduced after six
weeks. Recently there have been difficulties with this scheme leading to late
payment of contractors by the Government, forcing some contractors to layoff staff.
3.5
In parallel the Government has been keen to encourage Local Authorities to support
and promote the programme to drive up uptake. The responsibility of the Local
Authority to report actions to reduce domestic energy use under the Home Energy
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Conservation Act was re-cast to bring the focus on actions taken to deliver Green
Deal plans.
3.6
In response, on 5 December 2012, this Committee set up an officer working group
to explore three possible responses to the Green Deal. These were: High Input/High
Outcome (Provider), Medium Input/Medium Outcome (Partner) and Low Input/Low
Outcome (Promoter). The Working Party held three presentation meetings, shared
with Bournemouth Borough Council, with information provided by national and local
external experts to discuss each of these potential options and review the impact on
the Borough of Poole.
3.7
Whilst this was occurring, in July 2013 the Government announced a multi-million
pound funding stream to deliver more Green Deal plans. The decision was taken to
bid for this funding, in partnership with Bournemouth Borough Council and Dorset
County Council, with the aim of using the funding to support the delivery of between
3,500 and 5,000 Green Deal Plans across Dorset. The decision of the working
group was postponed until the outcome of the bid was announced.
3.8
Unfortunately, on 28 March 2014, we received notification that the funding bid was
unsuccessful. Since the announcement of the bid result the Carbon Management
Programme have been reviewing the conclusions of the working group in the light of
revisions to Green Deal programme announced in the 2014 budget.
3.9
Working Group Conclusions
3.9.1 The Borough of Poole as a Green Deal Provider
The role of a provider would involve a considerable financial investment from the
Borough to set up and support. This could lead to an increased uptake of the Green
Deal and a revenue stream for the Borough. The potential for the Borough to
collaborate with Bournemouth Borough Council as a provider was also considered.
However, larger Local Authorities have invested considerable amounts of money,
some of which provided by central government, in setting up the scheme.
Birmingham City Council spent £1.5 million on procurement and promotion before
anybody signed up to the scheme. Given the current paucity of public enthusiasm
for the Green Deal this method is viewed as too high risk.
3.9.2 The Borough of Poole as a Green Deal Partner
The partner role pares back some of the financial commitment involved in becoming
a provider by joining an external organisation to take on some of the risk. However,
the Borough does not currently have the in house resource to act as a Green Deal
Partner without a serious impact on ongoing projects. Therefore, a decision to take
this role would involve considerable resource commitment. In addition, the risk of
low take-up of the Green Deal remains, which could make recovery of the set up
costs difficult. As such this option is not recommended.
3.9.3 The Borough of Poole as a Green Deal Promoter
The promoter role is by far the least onerous option for the Borough as it requires
very minimal financial commitment, merely the Borough making residents aware of
the option to use the Green Deal. On review it has been found that the Borough
would not need to recommend a particular provider and may be able to continue its
current policy of pointing towards the Dorset Energy Advice Centre as a source of
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advice. Due to the lack of confidence in the desire of residents to take up the Green
Deal this low risk option was supported by the Working Party.
3.10
The Carbon Management Programme, working with Geographic Information
Services (GIS) and planning officers, have been developing a Local Energy
Information Portal (LEIP) which will support the Borough’s intention to act as a
Green Deal promoter. The purpose of the LEIP is to provide a toolkit for residents
and communities looking to initiate energy projects. The intention is to launch this
portal later this year at a public workshop; facilitated by Bournemouth University
Business school students. This workshop will also assist in supporting the Councils
Renewable Energy Strategy obligations.
4.
FINANCIAL IMPLICATIONS
4.1
The promoter option of the Green Deal will not result in any additional cost to the
Borough as the requirements can be fulfilled within existing staff resource.
4.2
The Local Energy Information Portal has been produced entirely in house from
information which is freely available so there are no financial implications of this
project.
5.
LEGAL IMPLICATIONS
5.1
None.
6.
RISK MANAGEMENT IMPLICATIONS
6.1
Acting as a promoter will involve signposting to a neutral source of information for
residents considering making home improvements. Therefore, all risks are
minimised.
7.
EQUALITIES IMPLICATIONS
7.1
None
8.
CONCLUSIONS
8.1
It is recommended that the Borough of Poole acts as a Green Deal promoter to
meet its obligations under the Home Energy Conservation Act.
Contact officer:
Paul Cooling
Carbon Reduction Manager
01202 63(3719)
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