December 2013: The latest GLA Investment Performance Board meeting includes a useful progress report on the various Mayoral delivery programmes. ‘Project Performance Report‘ paper 10b Appendix 2 includes information of some challenges currently being faced by the Mayor’s residential energy efficiency scheme RE:NEW. The paper states:
“Delivery of the RE:NEW Phase II carbon targets are significantly delayed and contractors will miss their contractual obligations. This is largely due to delays in the availability of ECO. The mitigation options are being reviewed including withholding performance payments and reallocating funding to the RE:NEW Support Team to reduce any shortfall in achieving the carbon targets. This combined with a delay in having to wait for confirmation from the EIB for ELENA funding prior to commencing procurement of the full RE:NEW Support Team means the 2013/14 carbon targets may not be achieved…”
The delays have led to the project being graded an ‘amber’ rating under the paper’s ‘traffic light’ performance system.
- RE:NEW has retrofitted over 99,000 homes to date since it was created in 2009
- Over the next three years, RE:NEW will aim to support the letting of contracts that will save approximately 186,000 tonnes CO2 per annum through retrofitting approximately 232,000 homes
- Capita Symonds were appointed to operate an interim RE:NEW Support Team – and began work in June of this year, with the GLA’s £150k funding covering programme activities until the end of December 2013. The RE:NEW paper proposes extending this funding by up to £200k for the Support Team to continue activities until the end of March 2014.
- In contrast to the Investment Board’s mention of programme delays, the Housing Group’s paper relates that “progress made by the [RE:NEW Support] team to date has been excellent. The target of 1,500 tonnes of CO2 saved has been substantially exceeded; two contracts have been signed, with Brent Housing Partnership and LB Lewisham representing a total capital value of £24 million, and a saving of 4,333 tonnes CO2 per annum. There are a further 6 projects in procurement equating to a further £17.5 million capital investment and a saving of almost 6,000 tonnes CO2. This includes projects from Tower Hamlets Homes, LB Wandsworth and LB Havering. A further 17 boroughs and housing associations are engaged with the Support Team at the earlier stages of project development.”
The Housing paper also relates that the GLA is hoping to secure up to £3.85 million from the European Investment Bank’s (EIB) ELENA programme “to procure the full RE:NEW Support Team for three years”. The funding process with the EIB has however taken longer than anticipated, leading to the necessity to provide funding to an interim support team.
The paper interestingly also sets out risks associated with not securing this ELENA financing, as well as not being able to access sufficient ECO funds as a consequence of the Government’s recent pronouncements on the supplier obligation energy efficiency programme. The paper states “Changing the ECO model would require secondary legislation…The [GLA] Environment Team is currently developing a proposed lobbying approach to help to address this risk, which may include lobbying for a regional target. If successful this could improve the follow [sic – must be ‘flow] of funding for projects.”
The paper highlights that a formal submission to the EIB has now been made and “funding confirmed in principle” should be sometime this month. Hopefully the EIB will be presenting the GLA with a welcome Xmas present this year – watch this space!