Agenda item

Report of the Director of Business, Invesment and Culture

Cabinet considered a report of the Business, Investment and Culture on the Business Energy Advice Service.

In the first half of 2023, West Midlands Combined Authority (WMCA) and its Constituent Authorities and Universities had worked with government to design a programme of energy efficiency audits and Capital Grants covering the West Midlands International Territorial Level (ITL) 1 region. The scheme was developed in response to concerns that the West Midlands contained a relatively high proportion of energy intensive businesses (notably manufacturers) and that rising energy costs was a major threat to the long-term competitiveness of a significant number of businesses and could put jobs at risk. The West Midlands Industrial Energy Taskforce, which was charged with exploring this issue, concluded that a more in-depth business support and finance programme was required to complement the Decarbonisation Net Zero Programme that was being funded through UK Shared Prosperity Fund (UKSPF), which Coventry City Council was delivering for Coventry businesses, which was agreed by Cabinet in February 2023 (minute 92/22 referred).

In total, government had allocated £24.6m to the West Midlands ITL1 region, with the region needing to deliver energy efficiency audits to 4,000 businesses by March 2025, and awarded Capital Grants of up to £100,000 to support some of these businesses to tackle financial barriers to implementing capital investments to improve energy efficiency. The expectation was that the activities would improve energy consumption by reducing energy bills and therefore improve productivity and reduce carbon emissions, and would both protect good quality jobs and create new skilled jobs.

Given the size of the geographical area being targeted, a consortium of Delivery Partners has been developed. Coventry had been included within the WMCA delivery area, and similar to the UKSPF Decarbonisation Net Zero Programme delivery arrangements, Coventry City Council (CCC) had been selected to deliver Energy Audits for Coventry businesses as part of a consortium led by Aston University. In addition, Coventry City Council had been selected to administer the Capital Grants fund for Coventry businesses, as part of a consortium led by Birmingham City Council.

The BEAS programme was initially being delivered in the West Midlands as a national Pilot up to March 2025. It is not clear what government’s plans were for the programme beyond that date.

The total BEAS funding currently allocated to Coventry City Council amounted to £1,689,679.00 up to March 2025. It included £346,000.00 to deliver 277 Energy Audits to Coventry businesses, plus £1,343,679.00 to deliver grants of up to £100k to Coventry businesses and associated programme management and grant administration costs. Out of such totals, CCC’s revenue for Project Management and Grant Administration staff would be £9,700.00 until March 2024 and then £192,000.00 to fund staff from April 2024-March 2025. It should be noted that the funding for Coventry, which was part of the WMCA area allocation, was indicative and the value could change depending on levels of demand and take-up from the other Constituent Authority areas. 

To account for potential high levels of demand from Coventry businesses and the fact that potential underspend at regional level for other LAs, could mean further Grant funds for Coventry, the report also requested authority to accept further grant allocation up to the total sum of £2.5m of BEAS funding to deliver Energy Audits, and for delegated authority to enter into funding agreements. Delegated authority was also sought to contract with Lead Delivery Partners in order to complete this work.

RESOLVED that the Cabinet:

1)  Approves the acceptance of BEAS funding £1,689,679 for delivery and management of Energy Audits and any further allocation up to and including grants up to a maximum of £2.5m.

2)  Grants delegated authority to the Director for Business, Investment and Culture, following consultation with the Chief Operating Officer and the Chief Legal Officer and following consultation with the relevant Cabinet Member(s), to undertake all necessary due diligence in relation to the funding allocation, including the authority to establish and implement the grant scheme necessary to deliver the BEAS.

3)  Grants delegated authority to the Director for Business, Investment and Culture, following consultation with the Chief Operating Officer and the Chief Legal Officer and following consultation with the relevant Cabinet Member(s), to enter into back-to-back contracts with the Lead Delivery Partners – Aston University for Energy Audits and Birmingham City Council for Capital Grants and any other external providers that may be required to deliver some activities, as deemed necessary.