Decisions

9.1

The report set out the budget pressures and risks facing the services that are the responsibility of the Economic Development and Skills Policy Committee (EDSC), and a budget action plan to mitigate these as far as possible in the 23/24 financial year.

It provided recommendations for approval which will allow the services to contribute to Sheffield City Council’s ability to set a balanced budget.

9.2

RESOLVED UNANIMOUSLY: That the Economic Development and Skills Policy Committee:-

1.    Note the Council’s challenging financial position;

2.    Note the pressures and risks identified in relation to the Economic Development and Skills Policy Committee budget for the 23/34 financial year and commit to work with officers to mitigate these risks where possible;

3.    Note the work undertaken over the summer to develop the Budget Action Plan; and

4.    Approve the budget action plan to deliver savings for 23/24 of £525K, against a pressure of £595K, for submission to the Strategy and Resources Policy Committee.

9.3

Reasons for Decision

9.3.1

A balance has been sought to strike a balance between meeting the budget challenges in Committee and still delivering as much impact as possible for Sheffield’s economy and residents in line with the priorities set in the one-year plan and Business Recovery Plan. The contribution and commitment of the Service in supporting the city economy through covid has been noted, and losing the momentum built as we face a cost-of-living crisis would be damaging to the broader City economy.

9.3.2

Furthermore, removal of the services and budgets would also dramatically reduce the City’s ability to bid for and win external funding, which maximises the Council’s investment.

9.3.3

This is the preferred option as it allows the Committee to contribute substantially to the Council’s budget position. Further options can be considered by Strategy and Resources Committee with the EDSC, as the range of options across all Committees are considered together.

9.3.4

In setting this Budget Action Plan the intended outcome is to continue to deliver services which are pivotal to economic development within the city and support the wider regional economy and maximise our limited financial resource by working in partnership and bringing in external funding.

9.4

Alternatives Considered and Rejected

9.4.1

Do nothing

By undertaking none of the proposed actions, we would be unable to contribute to delivering a balanced budget.

9.4.2

Deliver Balanced Budget

Make further savings by accepting the options, currently rejected, by the Committee.

9.4.3

Offer greater budget savings by stopping services

Make further savings by stopping non statutory services.

8.1

Culture has moved organisationally within Sheffield City Council from Leisure to Economic Development, opening up new opportunities to use culture to make Sheffield a great and inclusive place to work, study, invest, and live.

The report proposed some strategic actions which would strengthen the cultural leadership role of Sheffield City Council and help the sector to develop.

8.2

RESOLVED UNANIMOUSLY: That the Economic Development and Skills Policy Committee:-

1.    Formally adopt the Sheffield Culture Collective Strategy on behalf of Sheffield City Council as an interim, while SCC works with partners to develop a full city Culture Strategy;

2.    Note the submission of three Expressions of Interest to the Create Growth Fund; Cultural Development Fund 3; and Place Partnership Fund; and

3.    Support in principle the creation of a Cultural Feasibility Fund through external funding sources such as SYMCA.

8.3

Reasons for Decision

8.3.1

Three strategic actions were proposed in the report:

Action 1: Adopt a clear strategy which can underpin funding applications in the sector.

Action 2: Engage with immediate external funding opportunities

Action 3: Support the creation of a Cultural Feasibility Fund and project pipeline

8.3.2

These actions will help to create a context where the cultural sector can develop further and SCC can show cultural leadership:

·       The adoption of an interim Strategy will give clarity and confidence to funders

·       SCC’s clear support with external funding bids will improve the likelihood of success

·       A Cultural Feasibility Fund will start to create a cultural project pipeline, and will begin to address inequalities in provision and access to resources.

8.4

Alternatives Considered and Rejected

8.4.1

Do Nothing

By undertaking none of the proposed actions, the cultural sector in Sheffield will continue to experience under-investment from external funders and SCC will suffer ongoing reputational damage in its cultural leadership.

8.4.2

Develop an SCC Cultural Strategy without adopting the Culture Collective Strategy as an interim

It will take a number of months to craft an effective city Cultural Strategy. If we waited for the creation of a new document without having an adopted strategy document, this would continue to undermine external funding bids and reduce clarity and profile for culture. The Sheffield Culture Collective Strategy was developed for a particular purpose with 19 local organisations and individuals, and does not include all the elements (e.g Net Zero) or methodology (co-creation) which would feature in a city Culture Strategy. However, the general approach and priorities of the Collective Strategy are in line with Council policy, and provide a valuable immediate strategic hook for strengthening the cultural landscape in the city.

14.1

Sheffield City Council holds a substantial portfolio of land and property assets some of which are no longer required for the delivery of services to the public. This report seeks approval of a Disposals Framework for council land and property.

The Framework provides guidance to decision makers, officers and Elected Members to ensure that the Council is compliant with its legal, financial and statutory duties.

14.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     That the attached Disposals Framework be adopted as Council Policy.

2.     That the Council’s Chief Property Officer be authorised in consultation with the Chair of Finance Sub-Committee and the Director of Legal Services to revise and reissue the Disposals Framework as required.

14.3

Reasons for Decision

14.3.1

Disposal of Land and Property by public authorities can be controversial and there has been recent scrutiny of a number of Local Authorities regarding estate management practice, disposals and achieving best value in property transactions. It is therefore important that decision makers, Officers and Elected Members are provided with clear guidelines and procedures for good governance to reduce the risk of challenge.

14.4

Alternatives Considered and Rejected

14.4.1

The main alternative option is to continue using the Disposals Framework approved by the Cabinet Member for Finance and Resources in 2013. However, this does not take account on the new governance arrangements and committee system introduced in 2022, recent case law and best value reviews of Local Authorities and best practice, neither does it fully address certain areas of policy such as disposal at less than best consideration. This leaves the Council at risk of exposure to challenge and the requirement to use scarce resources to defend actions.

9.1

The report updated the Committee on the progress of the Sheffield City Region Urban Development Fund (the JESSICA Fund) over the past ten years and seeks approval for the Fund to retain its initial allocation of capital funding for a further ten years to enable additional commercial investment loans across South Yorkshire.

Approval was also sought to expand the Investment Strategy of the Fund to include investment in residential, leisure and retail developments.

9.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Notes the progress of the JESSICA Fund over the past 10 years and approves the Council maintaining its lead role in the oversight of the JESSICA Fund;

2.     Approves the JESSICA Fund retaining the Growing Places Fund Legacy for a further ten-year period with an expansion of the associated Investment Strategy to include residential, retail and leisure development; and

3.     Notes the JESSICA Fund’s intention to retain, with the permission of the Department for Levelling Up Housing and Communities, the original ERDF investment and the existing Sheffield City Region funding for a further 10 years.

9.3

Reasons for Decision

9.3.1

The underlying benefit that this proposal brings is that it retains a sustainable source of finance that can be used for future capital developments that might not be feasible through traditional commercial (private sector) finance and will support the economic regeneration of the City and wider region. A successful JESSICA Fund represents an opportunity to progress the local and regional regeneration agenda creating jobs and wealth.

9.3.2

Retaining the JESSICA Fund with its Legacy funding and newly procured Fund Manager for a further ten years with an expanded Investment Strategy will:

       I.          Retain £32m in the South Yorkshire economy to support property development and the wider economy through the accommodation of indigenous business growth and inward investment.

     II.          Enable a local Fund to invest in a broader range of property investments thereby improving the opportunity for businesses to access finance. iii)

   III.          Provide an innovative local investment vehicle to attract additional private and public sector investment into the region.

9.4

Alternatives Considered and Rejected

9.4.1

A do-nothing option would see the Fund end its activity in supporting activity in South Yorkshire and its capital proportionally returned to DLUHC to be invested in the UK and to SYMCA with investment in the South Yorkshire economy.

9.4.2

The Fund could be ‘sold’ as an ongoing asset to a private investment vehicle. This would likely generate a small return for the Funds original investors but would see a loss of control of the Funds activity. It is likely that the geographic and sector restrictions in the Investment Strategies would be removed, and investments would no longer be directed at those that have both economic and social benefits for South Yorkshire.

13.1

Acceptance was sought for £4,033,566 of DEFRA / DfT Implementation Fund grant funding awarded towards delivery of the Sheffield and Rotherham Clean Air Plan to achieve legal NOX levels within the shortest possible time.

Approval was also sought for £6.176m of the existing DEFRA / DfT Clean Air Fund (CAF) award to be included in the Capital Programme to enable Financial Support Measures (grants) be provided to owners of Clean Air Zone (CAZ) non-compliant to upgrade their vehicles.

13.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Accept the additional grant funding of £4,033,566 awarded to Sheffield City Council as the accountable body by the Department for Environment Food & Rural Affairs (DEFRA) and the Department for Transport to enable the Council to comply with its statutory duty to implement the Sheffield & Rotherham Clean Air Plan as the Direction from the Secretary of State received on 13th July 2022.

2.     Approve the inclusion of in the Capital Programme of a scheme of grant assistance to Bus, Coach and HGV owners as described in the report to a value of £6.176m.

13.3

Reasons for Decision

13.3.1

The £4,033,566.00 Implementation fund grant award needs accepting to enable implementation to progress to progress within the required timescale. Without this the funding will not be available when required and could cause delay and / or will require expenditure at risk.

13.3.2

The £6.7m of the CAF funding needs including on the capital programme to progress within the required timescale. Without this approval the funding will not be available when required and may delay roll-out of the FSM’s grant and loans designed to mitigate some of the financial impacts of the CAZ charging zone.

13.4

Alternatives Considered and Rejected

13.4.1

Options were assessed throughout the outline business Case and Full business case process. Proposals are now final and the Local Authority is Directed to implement the measures to achieve legal compliance by 2023.

15.1

The Council is the lead commissioner in the city for drug and alcohol treatment and recovery services which fall under the Council’s Public Health statutory duties. Services are funded via the Public Health Grant with a contribution from the Office of the Police and Crime Commissioner.

The Office of Health Improvements and Disparities (OHID) have made additional funding available to support Local Authorities to achieve the aims of the new National Drug strategy ‘From Harm to Hope’ published in December 2021.

The purpose of the report was to seek approval to spend the new Supplemental Substance Misuse Treatment and Recovery Grant (SSMTRG) to deliver against the objectives of the national drug strategy and to seek approval to accept and spend the Rough Sleeper Drug and Alcohol Treatment Grant (RSDATG) funding to support the prevention, treatment and recovery associated with drugs and alcohol in the city for those who are rough sleeping or at risk of rough sleeping.

15.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     notes the receipt of the Supplemental Substance Misuse Treatment and Recovery Grant for which the Council we will be accountable.

2.     accepts and thereby agrees to be the Accountable Body for the Rough Sleeper Drug and Alcohol Treatment Grant.

3.     notes the objectives that the Council is required to address using the two grants and agrees the approach taken.

4.     endorses the planned interventions and, where these are reserved decisions in accordance with the Constitution, approves the outlined commissioning strategies and grant awards and approves the establishment of the enhanced recovery support grant fund.

5.     delegates authority to the Director of Public Health to agree the final eligibility criteria for the enhanced recovery support grant fund.

6.     delegates authority to the Director of Public Health to take any further reserved commissioning decisions necessary to deliver the outcomes outlined in this report, where such decisions are within agreed budgets including the additional funding outlined in this report.

15.3

Reasons for Decision

15.3.1

OHID have made their intention to monitor and scrutinise local authorities against the investment explicit. Sheffield is one of the areas in the Yorkshire and Humber region to receive the greatest allocations of funding and will be challenged if progress against the plan slips. There is a reputational risk if SCC fails to deliver.

15.3.2

Both grants offer significant opportunity to provide support to some of the most vulnerable residents in Sheffield and to improve the city’s public health and equality outcomes.

15.4

Alternatives Considered and Rejected

15.4.1

The Council could decide that it wishes to put forward different proposals. However, this would either require further approval by OHID otherwise there is financial risk if we are unable to spend the grant in the way it is intended and reputational risk if we are unable to deliver against the new national strategy.

15.4.2

The Council could decide not the spend the money, in which case it would have to be repaid. However, if expenditure is not approved, Sheffield risks not being able to deliver against the National Drug Strategy and risks losing the associated funding. This would be a lost opportunity for Sheffield residents.

12.1

This report sought approval for the former Bole Hill View Older Persons’ Residential Home site (Eastfield Road, Crookes, Sheffield, S10 1QL) to be appropriated1 for the purposes of Part II of the Housing Act 1985. The vacant former Older Persons’ Residential Home, which has been disused for several years, currently occupies part of the site. The site and building have been declared surplus to requirements in terms of their original/ previous use. The site has been identified as suitable for the delivery of new affordable homes as part of the Council’s Stock Increase Programme. The site needs to be formally appropriated for ‘housing purposes’ to enable work to progress (e.g. disconnection of utilities, demolition of existing structures, completion of ground investigation surveys) on the delivery of new affordable Council homes.

12.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Approve that the former Bole Hill View Older Persons’ Residential Home site is appropriated for the purposes of Part II of the Housing Act 1985

12.3

Reasons for Decision

12.3.1

In Planning terms, the preferred use for the site is C2 (residential institutions) and C3 (housing).

12.3.2

The site is in the Urban West Housing Market Area. This is the area of the City with the largest shortfall of affordable homes, which includes demand for 1-bed apartments which this project will ultimately deliver (subject to further detailed design work, the outcome of a Planning Application and Council approval via the Capital Approval process).

12.3.3

The site is in an area with limited surplus Council-owned land suitable for housing development and where competition for and cost of sites on the open market is high.

12.3.4

Provides an opportunity to regenerate a Council-owned brownfield site (removing liabilities associated with a vacant building/ disused site).

12.4

Alternatives Considered and Rejected

12.4.1

‘Do nothing’: The site was declared surplus in 2013. It has been disused for several years, with part of the site is occupied by a former older persons’ unit. The site remains a maintenance liability for the Council and is an underutilised brownfield site in Council ownership. ‘Do nothing’ is not considered a suitable long-term option.

12.4.2

Disposal of the site and subsequent marketing for a commercial use: Marketing the site for commercial use is also likely to generate a land receipt for the Council which could be re-invested in services. However, whilst other uses may be acceptable, in Planning terms, the preferred use for the site is C2 (residential institutions) and C3 (housing). Given the location of the site in an established residential area, with good access to public transport and local services – a residential use is preferred.

12.4.3

Disposal of the site and subsequent marketing for a residential use: Marketing the site for residential use is also likely to generate a land receipt for the Council which could be re-invested in services. Given the need for affordable housing in this area of the City, coupled with limited surplus land in Council ownership suitable for housing development to meet this need, the preference is to secure the site for the delivery of affordable Council homes as part of the Stock Increase Programme.

Whilst market disposal of the site for residential use cannot be ruled out in its entirety (if a Council-led scheme is considered unviable) it is not the preferred option for this site.

10.1

The report sought approval from the Sub-Finance Committee to accept £6.6m from the South Yorkshire Mayoral Combined Authority (SYMCA) to support the implementation of a Project Feasibility Fund (PFF) and to note the proposed governance arrangements for the PFF.

10.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Sheffield City Council through the Programmes and Accountable Body Team will act as the Accountable Body for the Project Feasibility Fund.

2.     The Council to enter into a funding agreement with the South Yorkshire Mayoral Combined Authority in order to accept a grant of £6.6 million.

10.3

Reasons for Decision

10.3.1

Entering into the Fund Agreement will allow the Council to:

1.     Develop and complete of the City Strategy which will also include Policies and Spatial Strategies and the Sheffield Place Based Plan.

2.     Enable the development of project ideas from prioritised City strategic objectives.

3.     Turn ideas into deliverable projects with developed and costed business cases that can deliver against South Yorkshire Strategic Economy Plan (SEP) objectives.

10.4

Alternatives Considered and Rejected

10.4.1

A do-nothing option would see the Council with very little capacity and resource to complete the City Strategy and Place Based Plan. In addition, there would be extremely limited ability to proactively develop project ideas and business cases to delivery strategic outcomes for the City.

10.4.2

No alternative external funding sources have been identified for this type of activity to be undertaken.

11.1

The report provided an update on the lifecycle maintenance work outlined in the Leisure Investment and Facility Review report, approved at Cooperative Executive in November 2021.

The report provided an update on the above work that has been carried out to date.

The report provided an update on the planned work between now and 2024, including a breakdown of the required investment for each of the facilities and the planned work.

The report asked for committee approval to draw down the next tranche of funding to allow this planned work to proceed.

11.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Approves the drawdown of funding to SCT for essential health and safety/maintenance and lifecycle improvements through to 2024 of up to £19.2m, to be funded as identified in the Leisure Facility Investment Review (LIFR) approved at the November 2021 Cooperative Executive.

2.     Notes that a further report will be brought to a future Finance Sub Policy Committee meeting in relation to maintenance and lifecycle work at Upperthorpe Healthy Living Centre.

11.3

Reasons for Decision

11.3.1

It is expected that investment into improved facilities will help to retain participation and usage of venues. Improved facilities will better meet customer expectations of a modern and welcoming leisure and entertainment offer.

11.4

Alternatives Considered and Rejected

11.4.1

Option 1 - Do nothing. This is not a realistic option because without investment facilities will continue to deteriorate and there is a significant risk that facilities would have to be closed.

11.4.2

Option 2 – Delay Investment to 2024 Page 101 Page 8 of 8 Investment could be delayed until the appointment of a new operator in 2024. This is not the preferred option because there is a risk that plant and equipment may fail prior to 2024 resulting in unplanned building closures and disruption to customers. It is also our preferred option to progress as much work as possible in advance of handing over facilities to a new operator to help support a smooth transition and mobilisation process.

8.1

The report provided details of proposed changes to the existing Capital Programme as brought forward in Months 03&4 2020/21.

8.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Approve the proposed additions and variations to the Capital Programme listed in Appendix 1 & Appendix 2 of the report.

8.3

Reasons for Decision

8.3.1

The proposed changes to the Capital programme will improve the services to the people of Sheffield

8.3.2

To formally record changes to the Capital Programme and gain Member approval for changes in line with Financial Regulations and to reset the capital programme in line with latest information.

8.4

Alternatives Considered and Rejected

8.4.1

A number of alternative courses of action are considered as part of the process undertaken by Officers before decisions are recommended to Members. The recommendations made to Members represent what Officers believe to be the best options available to the Council, in line with Council priorities, given the constraints on funding and the use to which funding is put within the Revenue Budget and the Capital Programme.

7.1

This report brought the Committee up to date with the Council’s financial position as at Month 4 2022/23.

7.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Note the Council’s challenging financial position as at the end of July 2022 (month 4).

7.3

Reasons for Decision

7.3.1

Executive directors and Directors will be required to develop plans to mitigate the in-year forecast overspends.

7.4

Alternatives Considered and Rejected

7.4.1

The Council is required to both set a balance budget and to ensure that in-year income and expenditure are balanced. No other alternatives were considered.

16.1

The purpose of the report was to seek approval to accept and allocate monies from NHS South Yorkshire Integrated Care Board to the value of £2.427m on a non-recurring basis.

The purpose of this new funding from NHS is to enable an increase in social care capacity to enable the safe and timely provision of discharge from hospital and reduction of 40 beds on average per month.

16.2

RESOLVED UNANIMOUSLY: That Finance Sub-Policy Committee:-

1.     Approves the Council accepting £2.427m of non-recurrent funding from the NHS South Yorkshire Integrated Care Board and thereby becoming the Accountable Body for such funding as set out in this Report.

2.     Approves the establishment of a grant fund(s) of a maximum £2m, with eligibility criteria to be agreed with NHS South Yorkshire Integrated Care Board, from which grants will be allocated to successful providers to provide the additional social care support.

3.     Delegates authority to the Director of Adult Health and Social Care to set the eligibility criteria for the grant fund(s), in consultation with the NHS South Yorkshire Integrated Care Board, and to award any grants in excess of £50,000.

16.3

Reasons for Decision

16.3.1

The additional social care support and funding will:-

·       Alleviate short and long-term pressures which will lead to people being discharged from hospital on a timely basis and within 48 hours of being ‘Medically fit for discharge’.

·       Support the existing home care providers who are dealing with increased demand pressures.

·       Support and enable where possible the individual to return home if they are able to do so.

·       Reduce the number of people deconditioning due to extended stays in hospital.

·       Free up acute beds for other purpose

·       Support increased demand due to winter pressures and other spike in demand due to COVID/Flu etc

16.4

Alternatives Considered and Rejected

16.4.1

The Council could decline the grant funding but it is anticipated that demand would still increase and there would be no additional funding to meet those costs. In addition, it is highly unlikely that the homecare sector could provide the additional capacity without the measures proposed in this Report.

16.4.2

The Council could agree to be Accountable Body for the funding but only look to directly provide additional capacity or contract for it without the grant funding arrangements proposed in this Report. However, as above, it is highly unlikely that the homecare sector could provide the additional capacity without the grant funding measures proposed in this Report. It is believed that those grant funding arrangements will stimulate the market and enable them to increase capacity so that we are able to enter into additional call off contracts under existing contractual arrangements.

6.1

The report seeks approval to award a further 1-year contract to Total Gas and Power via the Crown Commercial Services (CCS) framework for the supply of gas to the Council. There is a requirement for a corporate contract to supply natural gas for heating and hot water across the authority’s portfolio of sites as well as for some schools and academies.

The gas needs of these buildings are currently being supplied by Total Gas and Power Ltd and contract managed through Facilities Management and Procurement and Supply Chain Team. The contract was procured for a period of four years from 1^st April 2021 to 31^st March 2025.

To allow forward purchasing of gas to take place for the following year (2025/26), and to bring this contract in line with the electricity contract, the Council will need to extend the current arrangement for a further one year before the 15^th of September 2022.

6.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

1. agrees the Council commission of a further 1-year provision, for the period from 1st April 2025 to 31^st March 2026 for the Council’s gas supply, as outlined in this report; and

2.  approves the procurement strategy and contract award of a 1-year contract to Total Gas and Power via the Crown Commercial Services (CCS) framework RM6011.

6.3

Reasons for Decision

6.3.1

The Council do not currently have expertise in energy market trading, therefore contracting through a Public Buying Organisation (PBO) such as CCS offers the Council the best value procurement route.

6.3.2

The commissioning decision taken in 2021, and the reasons provided in the decision report to use the Crown Commercial Services (CCS) framework still apply and therefore are considered to offer the best route for purchasing the Council’s gas supply.

6.3.3

To bring all future contract renewals (and council decisions) in line with the CCS framework renewal date, the next decision would be required by 15 September 2023, and every 4 years after that (15 Sept 2027, and so on), to enter the council into contract (aligned with the 4 year framework term) for a period of 4 years. 

6.4

Alternatives Considered and Rejected

6.4.1

5.1

The existing contract for the supply of electricity to the Council with Npower was procured for a period of four years using the Yorkshire Purchasing Organisation (YPO) Electricity framework 791 from 1st April 2019 to 31st March 2023.

The Council’s contract for electricity provides a supply to all Council assets and includes an optional traded offer to maintained and academy schools.

This report describes the options available to the Council for the procurement of its electricity from the 1st April 2023 to 31st March 2026.

5.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

1. agrees that the Council commission the Council’s electricity supply for the period 1st April 2023 to 31st March 2026 as set out in this report; and

2. approves the procurement strategy and contract award for the Council to enter into a 3-year contract via the CCS Energy Framework, with its nominated supplier EDF Energy Ltd effective from 1st April 2023 to the 31st of March 2026

5.3

Reasons for Decision

5.3.1

The Council do not currently have expertise in energy market trading, therefore contracting through a Public Buying Organisation (PBO) offers the Council the best value procurement route.

5.3.2

Following an evaluation of the currently available PBO frameworks the Crown Commercial Services (CCS) PBO is considered to offer the best route for purchasing the Council’s electrical supply. The nominated supplier of electricity for CCS is EDF. The benefits of the CCS framework are detailed below:

- Ensures full compliance with Public Contracts Regulations

- Largest energy spend of all PBOs - forecast £1.5Bn (Excl VAT) electricity spend for supply year 22-23

- Largest number of customers of all PBOs - 896 electricity customers for supply year 22-23

- Enhanced customer services options

- Dedicated and experienced staff – total number of staff on energy team is 38

- CCS specific customer services team

- key account and customer query management

- Competitive management and administration fees, transparent not for profit pricing structure

- Market and budget reporting

- Electronic portal for customers account access

- Annual audit

- budget forecasting

- Freedom to add or remove sites from the contract with no penalty should the portfolio change (subject to conditions)

- Low supplier cost to serve fee (CCS unable to disclose the supplier fee due to commercial confidentiality)

- CCS fees are charged on a per meter per year cost (HH £240 per meter, NHH £5 per meter classes 01 and 02, any meter with class 03 and above is £24 per meter). CCS state these fees are the lowest in the market. CCS does not charge a Levy % on Energy Services. Total CCS income from Energy Services via Framework RM6011 is equivalent to 0.22% of total spend (Excl VaT) for 22-23.

- CCS is able to provide differing types of carbon neutral / 100% renewable energy via their nominated electricity supplier Edf (at varying costs). Edf standard Generation mix for 22-23 is 91.1% Carbon Neutral.

- A range of risk managed trading strategies including short term variable(V6), long term variable basket (V30), and a short term locked basket(L6). Additional option of medium term locked basket (L24) from 22/23. See table below for summary of trading basket options available to the Council with key timelines.

The outcome of the benchmarking exercise supports the Council’s decision to switch to CCS and EDF for the ongoing provision of its electricity supply.

CCS offer their customers opportunity to purchase a mix of variable and locked options within the contract – helpful to the Council in terms of schools becoming academies and giving a choice for housing sites.

5.4

Alternatives Considered and Rejected

5.4.1

Option 1 - Do nothing

Advantages:

-       There are no benefits with this option

Disadvantages:

-       The tariffs would move on to out of contract rates which would increase costs to the Council

-       The Council would not be able to demonstrate it has sought Value for Money, nor would this be compliant with Council Standing Orders.

-       This option would not be compliant with Public Contract Regulations (PCR) and is open to legal challenge

Option 2 – SCC procure directly from a supply company:

Advantages:

-       SCC able to run a fully compliant tender process to establish a supply agreement to purchase energy through various strategies including on the day spot purchasing or flexible contract. The council would tender only the known ‘fixed’ price element of the electricity (this includes suppliers profit margin/fee and estimated non-commodity costs over delivery period). The commodity costs are subject to live trading which will be made with the nominated supplier.

-       Opportunity to work collaboratively with other local councils to achieve some economies of scale and potential income generation as lead authority.

-       Council avoids paying any management fees to third parties for administrating any frameworks/contracts.

-       Increased potential to maximise economic, social and environmental benefits through a Council-led procurement process (by ensuring social value is captured in tender specifications and contract)

Disadvantages:

-       Requires significant expertise and knowledge to manage energy purchases in a complex market.  It requires ongoing monitoring of energy markets and relies on officers going to the market on the right time and day. These purchases will be made through the nominated supplier.

-       Limited volume of spend in comparison to PBOs who aggregate large volumes, means this is less attractive to suppliers resulting in higher prices.  

-       Time consuming and requires significant lead-in time to implement the new arrangements/contracts. If contracts are not awarded in time, we may incur out of contract rates from current suppliers increasing costs.

Option 3 – SCC procure through an energy broker:

Advantages:

-       Potential to secure prices direct from suppliers by monitoring market prices. Independent energy brokers are similar to PBO’s but without the benefit of aggregating large Local Authority portfolios.

Disadvantages:

-       Brokers will most likely charge a fee for their service. Types of contracts include fixed (broker charges fixed fee for service), hybrid (brokers costs built into unit cost of energy) and inclusive (cost of service built into total cost of energy)

-       Smaller brokers may not have access to all supplier offerings

-       SCC would need to ensure that the arrangements have been subject to a full procurement process to ensure PCR compliance.

Option 4 - Use of framework agreements offered by PBOs (recommended option):

Advantages:

-       Compliant with PCR 2015. Several major PBOs offer energy supply frameworks that are available for the Council to use including Eastern Shires Purchasing Organisation (ESPO), Crown Commercial Services (CCS) and YPO.

-       All PBO’s centralise spend into single supply contracts aggregating demand by combining energy volumes across organisations to form one large portfolio making it more attractive for suppliers. PBO’s can deliver energy prices which are lower than the Council would be able to achieve on its own.

-       The risk of market volatility is reduced by opting for procurement through a PBO which is also considered to represent best value for money due to economies of scale and the PBO’s purchasing power. PBO’s will optimise energy prices by purchasing in advance and ensuring risk is managed and controlled by market experts.

-       Increased certainty of utility commodity costs due to forward purchasing arrangements

-       Scale of Operations – large aggregation of Public Sector energy spend

-       experienced energy staff including energy Specialists providing customer support

-       established governance arrangements in place such as committees and boards

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Disadvantages:

-    PBO’s charge a small management fee for accessing their arrangements