Report to the Cabinet Member for Economic Development, Environment and
Planning
Report submitted by: Executive Director for Environment
Date: 20 February 2013
Part I
Electoral Divisions affected:
All
Update on the outcome of the DECC Local Authority Funding Competition and
Introduction to the emerging Lancashire Collective Energy Scheme
Contact for further information:
Debbie King, (01772) 534195, Environment Directorate,
[email protected]
Executive Summary
In October last year the Department for Energy and Climate Change announced a
£40 million "competition" for local authorities aimed at driving local initiatives to
boost energy efficiency, reduce fuel poverty and encourage collective energy
switching and purchasing.
This report provides an update on the outcome of a number of applications made to
the Competition by Lancashire authorities, including the County Council. It also sets
out the progress being made to develop a Lancashire collective energy switching
scheme by district councils and the role the County Council could take in supporting
the project.
Recommendation
The Cabinet Member for Economic Development, Environment and Planning is
asked to:
(a) note the report,
(b) Endorse the County Council's continued support to district councils in the
development of a Lancashire Collective Energy Switching Scheme.
(c) Agree that the County Council helps to promote the scheme across Lancashire
in the marketing process.
Background and Advice
On the 19th October 2012, the Department for Energy and Climate Change
announced a £40 million "competition" for local authorities aimed at driving local
initiatives to boost energy efficiency, reduce fuel poverty and encourage collective
energy switching and purchasing. The competition had three strands each with its
own pot of money. This paper provides an update on the outcome of applications
made by Lancashire authorities and in particular progress being made to develop a
Lancashire collective energy switching scheme.
Strand 1 - £25 million Fuel Poverty Fund
Lancashire County Council submitted a bid, on behalf of all Lancashire authorities
including Blackburn with Darwen and Blackpool Councils, to the Fuel Poverty strand
of the competition to continue the Lancashire Insulation Scheme until March 2013.
This application was successful and £740,620 has been secured to provide free
cavity wall and loft insulation to Lancashire residents. The funding is predominately
aimed at supporting those in fuel poverty and the scheme marketing will, therefore,
be targeted at vulnerable households, including those on means-tested benefits, the
elderly, long-term sick/disabled and children under 5 years. It is expected that
referrals from these groups will be generated through local Warm Homes Healthy
People projects, for which £716,818 was secured from the Department of Health last
November.
Strand 2 – Green Deal Pioneer Places Fund
£10million was available for Local Authority Green Deal ‘pioneer’ projects aimed at
promoting the Green Deal. The County Council continues to have a number of
significant concerns about the operation of the Green Deal scheme and an agreed
approach to this Government initiative is still being discussed between district
councils. No application was, therefore, submitted to this strand either by the County
Council or any of the district councils. Blackpool Council did submit a bid which was
unsuccessful.
Discussions at officer level continue to take place around Green Deal with particular
focus on how Energy Company Obligation (ECO) funding can be secured for
Lancashire residents. Current indications are that this funding can be accessed
independently of Green Deal loans.
Strand 3 – ‘Cheaper Energy Together’ Fund: Collective Energy Switching
Collective energy switching occurs when a group of consumers group together to
negotiate a better deal with their gas and electricity suppliers. A specialist switching
partner negotiates on behalf of the consumers they represent and the offer is
presented back to the group of householders to decide whether to switch energy
provider or not. £5 million funding was available to support the development of
innovative collective energy switching schemes.
A number of Lancashire authorities expressed an interest in developing schemes
last November (due to the success of other local schemes in South Lakeland and
Oldham) and were at various stages of development. The position has progressed
rapidly since then. An application was submitted to the competition, led by
Blackburn with Darwen Council on behalf of all Lancashire districts, to secure
funding to support the delivery of a scheme. The bid was successful and £139,000
has been secured predominantly for marketing and to provide support for vulnerable
households and those unable to sign-up online.
A Collective Energy Switching Scheme for Lancashire
As there is strength in numbers, a scheme across multiple districts makes for a more
successful scheme and on that basis the Lancashire authorities have joined forces,
rather than pursue schemes independently, to work together along with Blackburn
with Darwen Borough Council (Blackpool Council has already progressed with a
scheme, taking part in a procurement process led by Peterborough Council) to
deliver a Lancashire-wide collective energy scheme, tentatively named the
'Lancashire Big Community Switch'.
All 13 Councils are onboard with the scheme and have individually already secured
political and executive support or are in the process of doing so throughout January
and early February. Collectively, with Wyre BC as the lead, all districts registered
their interest in using a contract that has been developed following a formal public
tender exercise by the Association of Greater Manchester Authorities to select a
switching partner. That process is now complete and ‘iChoosr’ has been appointed
as the preferred broker and an auction date of 9 April 2013 has been set for those
authorities joining the AGMA contract.
iChoosr has been the driving force behind collective energy switching schemes in
The Netherlands and Belgium and now also in the UK, working with more than 30
councils. They will manage the complete process for those residents registering via
the web, carry out the auction with the energy market to determine the lowest tariff
and complete the handover process with the successful energy company for
residents who wish to go ahead and switch provider. An example of a live online
registration process can be seen here: www.gmfairenergy.co.uk, currently open for
AGMA households to register. A site similar to this would be developed for
Lancashire by iChoosr.
Since DECC announced its ‘Cheaper Energy Together’ scheme many Councils have
expressed their interest in setting up a collective switching scheme for their local
community in the first part of 2013. With this in mind iChoosr has developed an all
encompassing approach that will accommodate a collective switching scheme for
everyone. “The Big Community Switch” will, 'behind the scenes' group both smaller
and larger Councils together in the same auction on April 9 whilst protecting and
ensuring the local approach that has proven to be so successful last year in the UK.
Grouping councils together in this way provides a higher number of consumers
which provides more negotiating power. There may be some national PR by DECC
and iChoosr on this.
Participating councils are expected to commit resources including staff time and
funding to ensure that the project is promoted successfully, including provision of all
marketing materials although iChoosr will advise on content and marketing
messages, which need to be carefully managed as not all households will find the
new offer better than their existing one. It is anticipated that the Lancashire
marketing campaign, which will be consistent across the county, will be fully
resourced by the DECC funding and communications teams from the districts have
now been engaged and brought together to develop a marketing plan.
There is also an expectation that each district council will manage the registration
process for those residents who do not have access to the internet. This could be
done via council offices/facilities that are open to the public for face to face sign up
and through customer contact centres for registration over the phone. iChoosr
provide a short training session, which is easily cascaded, for customer services staff
to assist them in managing this process.
iChoosr also expects councils to provide additional support and advice for vulnerable
residents who may be interested in the scheme, this will be a key element of the
project as these are the households who are likely to achieve the greatest saving.
Districts have begun engaging with agencies such as Citizens Advice Bureau, Age
UK and HelpDirect locally to help provide this support. Initial discussions have been
positive as these organisations see this as an opportunity to discuss other support
needs with households who have previously not come forward. Again it is
anticipated that the DECC funding will help resource this.
A number of districts have raised concerns about meeting the commitment to
support offline registration but are keen to explore ways of delivering this service to
enable the project to go ahead in their district.
An approach has been made via LCDL to the Workforce Development Team in One
Connect to consider the possibility of securing graduate or higher skilled placements
for a number of positions to provide additional support for districts. This would
include someone with marketing expertise to support with developing the marketing
plan and also for customer services support for each district for up to 8 weeks
without cost. Again early discussions have been positive.
For every switch (not registration) completed the district councils will each receive a
fee of £5 per fuel so this would generate an income of £10 for a typical dual fuel
switch. This could be used to offset project costs (customer services resource) or to
establish a community fund for future fuel poverty or energy efficiency projects.
It is estimated that 3% of households will initially register for a scheme, of which 20%
will be off-line registrations, for Lancashire this would be about 3,500 registrations,
about 290 registrations per district. Of those registering 10-25% will typically take up
the offer and switch supplier. The savings achieved can vary greatly from no saving
(in which case no switch would be made) up to a few hundred pounds per year.
The timescale proposed for the scheme is as follows:
 Campaign launch: Mid-February 2013
 End of registration: April 8
 Auction date: April 9
 Sending e-mail & letter (to inform of switch offer): From April 15
 End of acceptance period off line: April 29
 End of acceptance period on line: May 3
A role for the County Council
Up until now the County Council has had modest involvement in the development of
the scheme but has continued to engage with districts as the project has progressed.
Now that a timetable is in place and funding has been secured, firm actions are
being discussed and the support of the County Council has been requested.
In the main this would be support for the marketing campaign to encourage
registration. This could involve the use of the County Council’s logo alongside other
councils on promotional material, providing information on the website and a link to
online registration. Corporate Communications would be engaged to input to and
support the development of the marketing plan, which is being co-ordinated by
Blackburn with Darwen Council. All County Councillors would be encouraged to
support the project in their local areas.
A further suggestion from districts is that the County’s libraries could be used as an
additional point of contact for off-line registrations. This could be facilitated by
residents being directed to take a recent utility bill into the library, the library assistant
would then simply need to photocopy the document and collect some contact details.
These would then be passed on to the relevant district (a named contact would be
supplied) to be followed up. Alternatively, help could be given for on-line registration
via the People's Network of library computers. Involvement would be time limited for
the duration of the registration process and is unlikely to be resource intensive.
Some districts have already engaged with HelpDirect locally to support with off-line
registration for vulnerable residents and there may be opportunities to engage with
Adult & Community Services regarding a county-wide approach for support from
HelpDirect.
Whilst a positive outcome from the discussions with the Workforce Development
Team would greatly assist with off-line registrations the libraries are seen as an
accessible referral route by the district councils, who are keen that the County
Council is involved in some way to enforce the consistent message for a Lancashirewide scheme.
Consultations
N/A
Implications:
This item has the following implications, as indicated:
Risk management
This report provides an overview of current activity on domestic energy projects
ongoing across the county, with particular reference to the emerging Lancashire
Collective Energy Switching scheme being developed by the district councils. There
are no direct risks linked to this for the County Council as it is not a direct delivery
partner in the project. Indirectly the County Council's reputation could be at risk by
association with the project if communication messages with residents are not
carefully managed. This is a low risk and can be mitigated by the involvement of
Corporate Communications in the development of the marketing plan.
Finance
There are no direct financial implications arising from the recommendations as set
out in the report
List of Background Papers
Paper
Date
Nil
Reason for inclusion in Part II, if appropriate
N/A
Contact/Directorate/Tel