Two of the council’s six core objectives for the city under the Best Council Plan 2015-20 are to support communities and tackle poverty and to promote sustainable and inclusive economic growth. The latest available fuel poverty figures cover 2013 and in Leeds 11.6% of households (38,133) fell under the definition. In the same period, the figure for England was 10.4% of households, which shows how crucial it is that we take affirmative action, especially in the context of our organisational priorities.
In response to this an opportunity has arisen wherein energy market innovations now allow entities such as the council to form its own energy service companies (ESCo’s) at relatively low risk.
By moving into this emerging field and exploiting an ability to directly structure and uphold a fair tariff pricing strategy, the council could save the average resident in the city a sizeable amount of money, estimated to be between £100 and £200 per customer annually, compared to a status quo in which those households didn’t switch. Pertinently, the offer will be open to all without restriction.
Other ancillary benefits will also be achievable, including but not limited to: switching people from ‘dumb’ pre-payment meters to ‘smart’ pay-as-you-go (PAYG) alternatives; providing a route to market for local renewables based microgeneration schemes; and, cost neutrality for the council given that a small addition can be made to the overall tariff to cover the costs of any staffing that might be required internally (the ‘income’ to the council is envisaged to be around £250K per annum).
Executive Board approval is now sought to undertake an open, competitive process to enable the appointment of a partner who the council can work with to take these plans to fruition.
Members of the Executive Board will be recommended to:
Delegate authority to the Director of Environment & Housing to conduct the competitive process referred to above, and to negotiate and agree the resulting formal contract and all ancillary matters/documents.
Decision type: Key
Reason Key: Expenditure > £250,000;
Decision status: Recommendations Approved
Notice of proposed decision first published: 24/08/2015
Decision due: 23 Sep 2015 by Executive Board
Lead director: Director of Environment and Housing
Department: Environment and Neighbourhoods
Contact: George Munson, Energy and Climate Change Manager 0113 39 (52451) Email: george.munson@leeds.gov.uk.
Consultation process
The environmental programme board (EPB) were briefed prior to a precursory soft market testing / expression of interest exercise and key individuals were kept abreast of the draft executive board’s content as it was developed, so that their views could be incorporated.
Senior staff in Housing Leeds have also been consulted, as have relevant elected members (including the ‘Executive Member for Communities’, the ‘Executive Member for Regeneration, Transport, & Planning’, and the ‘Chair of the Affordable Warmth Partnership’).
In addition, the 2014 ‘survey of tenants & residents’ (STAR) received responses from over 10,000 council tenants. Of these, 41% said that they had difficulty affording energy bills and 40% said the heating and insulation of their homes was poor. Their response to the following question was as the per the bullet-points immediately below:
“The council wants to provide better value energy to all households in Leeds. One option is for the council to supply energy, either by setting up a new local energy company or creating a partnership with an existing energy company. This would aim to offer simple tariffs, no introductory offers or other gimmicks and to stop overcharging for pre-payment meters. Would you be interested in signing up to this company?”
· No - 18%
Consultees
Relevant elected members, environmental programme board (EPB) members, Housing Leeds leadership, and city residents.
Portfolio Holder: Executive Member for Communities' & 'Executive Member for Regeneration, Transport, & Planning'