Agenda item

Report of the Director of Property Services and Development

Cabinet considered a report of the Director of Property Services and Development, which would also be considered by Council on 19 March, 2024, which indicated that the UK has committed to reduce the carbon emissions associated with its public buildings compared to 2017 levels by 50% by 2032 and 75% by 2037. To support this, the Department for Energy Security and Net Zero (DESNZ) has continued offering the Public Sector Decarbonisation Scheme (PSDS), but now requires a local match contribution. The PSDS grant scheme provides grants of up to £325 per tonne of carbon emissions saved by capital energy efficiency and heat decarbonisation projects that directly reduce fossil fuel use.

Coventry City Council has previously been successful in Phase 1 of the grant scheme which has helped the Council reduce emissions from its buildings and schools by over 1000 tonnes of carbon per year.

The Council has now submitted a bid to the Phase 3c grant scheme to support the delivery of a second phase of building decarbonisation projects. Due to the change in criteria for the PSDS grant, a smaller pipeline of buildings than in Phase 1 has been identified as suitable candidates for Phase 2. The proposed scope of works has a combined project value of up to £1.85m with a maximum grant contribution of £786k available via the PSDS grant scheme.

The report sought approval to provide match funding for the project on an “invest to save” basis. Any investment would look to be recovered through revenue savings achieved from reductions in the buildings’ energy bills. Overall, the project is targeting carbon savings of up to 174 tonnes of carbon per year and estimated net savings of £40k per year after repayment of financing costs.

The report indicated that the energy improvement opportunities were identified during the building selection process and that, by delivering all of the measures together, the Council will achieve reduced carbon emissions associated with these buildings and will deliver financial savings estimated at £40k per year, net of financing costs. The buildings proposed for improvement and the measures proposed were detailed in the report.

Cabinet noted that Scrutiny Co-ordination Committee, had considered the report at their meeting on 11 March, 2024 and a detailed Briefing Note, outlining their consideration, was circulated. Cllr N Akhtar, Chair of the Scrutiny Co-ordination Committee was present at the meeting and outlined a number of concerns raised by the Committee in relation to the financial position of the project and the importance of ensuring the most beneficial interest is obtained. Cabinet received assurances from the Director of Finance and Resources and the Director of Property Services and Development in relation to the financial position, how the match funding would be met and the expected savings which would achieved by reducing property running costs, as detailed in the financial business case. 

RESOLVED:-

That Cabinet:-

1)   Notes the concerns raised by the Scrutiny Co-ordination Committee, together with the assurances provided in relation to those concerns.

2)   Approves the acceptance of a Public Sector Decarbonisation Scheme grant of up to the sum of £786k from the Public Sector Decarbonisation Scheme, if successful, to be utilised on the delivery of the Project as set out in the report.

3)   Delegates authority to the Director of Finance and Resources, following consultation with the Director of Property Services and Development, the Director of Law and Governance, Cabinet Member for Jobs, Regeneration and Climate Change and the Cabinet Member for Strategic Finance and Resources, to undertake all necessary due diligence and actions required to enter into a grant funding agreement with Department for Energy Security and Net Zero (or nominee).

That Cabinet recommends that Council:

1)  Approves the proposal to allocate up to £1m of corporate capital funding, funded from prudential borrowing towards Public Building Decarbonisation Phase 2 works with a total capital value of up to £1.85m as set out in the report ("the Project"), subject to successful award of the PSDS grant.

2)   Delegates authority to the Director of Finance and Resources, following consultation with the Director of Property Services and Development, the Director of Law and Governance, Cabinet Member for Jobs, Regeneration and Climate Change and the Cabinet Member for Strategic Finance and Resources, to approve the final scope and finances allocated to the Project, including in the event that grant funding is not successful.

3)  Delegates authority to the Director of Finance and Resources, following consultation with the Director of Property Services and Development, the Director of Law and Governance, Cabinet Member for Jobs, Regeneration and Climate Change and the Cabinet Member for Strategic Finance and Resources, to commence any necessary procurement activities and finalise the terms and conditions of the required contracts to facilitate delivery of the Project.

4)  Approves the addition of up to £1.85m to the Capital Programme to reflect the delivery of the works recommended as part of this report.