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Nottingham Post
Nottingham Post
Joseph Locker

EnviroEnergy to be brought 'in-house' at Nottingham City Council - here's what that means for jobs and customers

Nottingham City Council plans to bring its district heating energy company in-house next year in a bid to invest in the network.

Enviroenergy, which has been owned by the council since 2001 but operates as a separate legal entity called EnviroEnergy LTD, provides heating to around 5,000 homes and 70 businesses across the city.

The network, which many people might be aware of due to it occasionally producing loud noises from its plant in London road, saves the council around £5m each year.

The council says the company currently operates as what is known as a "going concern", meaning it is assumed the business can and will meet its financial obligations when due, and is currently solvent.

However according to a report, the network is almost 50 years old and in need of "major investment", which needs to happen before 2030.

The transfer is subject to a a number of conditions.

These include a satisfactory outcome of the legal and financial due diligence which confirms the business, formerly operated by EnviroEnergy LTD, can be adequately run by the council, as well as confirmation of its ability to operate it and that, following the transfer of assets and liabilities, the company can be solvently liquidated.

Speaking to Nottinghamshire Live the council says the transfer is not another mismanagement of one of its companies, such as Robin Hood Energy, and is simply a more cost-effective way of running the company.

According to the council it will resolve the complication of adverse VAT impacts, which can occur due to there being two separate organisations - in this case, the council and the separate entity that is EnviroEnergy LTD - and they believe it is therefore a more financially viable solution.

City council deputy leader, councillor Sally Longford, said: "Nottingham’s district heating system is one of the largest in the UK and has been successfully providing renewable energy from waste to Nottingham households and businesses for 50 years.

"As well as saving customers and council tax payers money, the renewable low carbon energy provided by Enviroenergy is key to our ambitions to be a carbon neutral city by 2028.

"Therefore it’s vital that we plan for the future of the service which is why, as part of a strategic review of waste disposal and district heating, a recommendation has been made to bring the service in-house."

Bringing the company in-house, the council says, will not impact customers.

Jobs will also be retained, due to the fact they are already council employees.

The company will therefore be operated by the council itself, rather than the separate entity.

The transfer will come at a cost, however, and approved was the cost of £500,000, from the council's earmarked budget which has been allocated from reserves.

Quoted as reasons for the decision in the council's Executive Board report, it says it had "become apparent" operating an arms-length company is not the best value for money during a review as part of the Recovery and Improvement Plan, published earlier this year.

In a stark report, published last year, it was revealed the council's debt had become "at risk of becoming unsustainable".

It stated Energy and Waste Infrastructure was one of the council's "most significant risks", due in part to a potential £300m contract on the district heating network.

Responding to this concern, the council says this was not an accurate reflection of the position when it was reported, and it will not need the £300m investment as detailed in the report.

Councillor Longford added: “In-housing is the best way to support the investment in maintenance required with the service to customers continuing as before.

“We want to ensure heating and hot water can continue to be provided to local people and businesses in a sustainable way for decades to come.”

It is expected the transfer of Enviroenergy to the council will be completed mid-2022.

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