Examination of witnesses (Questions 560
- 579)
MONDAY 29 MARCH 1999
SIR DENNIS
PETTITT, CLLR
DEREK GREEN,
MR ALAN
ALLSOPP, MR
DAVID PICKLES,
OBE, MR
DICK HUSKINSON
and MS SARA
BATLEY
560. How do you see that extending to purchasing
renewable energy or facilitating purchasing renewable energy?
(Mr Allsopp) That would be just the same. We would
set up green contracts with preferred bidders.
561. And practically, how would that manifest
itself here? What sort of renewable energy sources are currently
available, or do you think would become available, by people such
as yourselves being in the marketplace to promote it?
(Mr Allsopp) I think in the initial stages it
would stimulate the marketplace for renewables, so if the demand
were there the demand would be met basically, so I think it would
help to generate that.
562. But where? What is it going to be?
Is it going to be incinerators, is it going to be trees, is it
going to be bio-fuels or what?
(Mr Allsopp) That would be basically bought from
the pool at the moment, the green pool. East Midlands Electricity
and PowerGen have probably the biggest portfolio of the regional
distribution companies and so that would be on our doorstep and
we would then negotiate contracts with anybody who was actually
supplying renewable energy, particularly if they are on a local
basis, because that would also help to promote local jobs and
the local economy, so we would hope to stimulate the local economy
through generation of renewables. It is a massive potential economic
regeneration opportunity and job creation opportunity in this
region.
Chairman
563. But none of that you are able to do
under the existing powers of your authority?
(Mr Allsopp) That is correct.
564. Therefore, even though you had this
idea and obviously worked it through to a certain stage, there
was nothing you could do?
(Mr Allsopp) There are no specific powers for
local authorities to do anything that is innovative. There are
no specific powers even to deliver HECA and the private sector
can, as I said, do anything unless it is forbidden. We appear
not to be able to do anything unless it is specific.
565. Just being devil's advocate, one could
say, could one, that the downside of what you are proposing is
that the individual bill would not go down as much as it otherwise
would do, right? The individual household bill would not go down.
There would not be as much savings for the individual? Some of
that you would be taking?
(Mr Allsopp) This is back to this cultural change:
would they prefer to take that £60 or £70 saving per
year that they could get and spend it on entertainment down at
the pub or wherever, and our concept would be to say, "Let's
invest that into the future, into a sustainable energy future,
and in doing that we will get you the best price from discounted
energy efficiency measures such as cavity wall insulation, condensing
boilers, etc."
566. But the individual could equally well
say, "I'll take that £60 or £70 a year and over
a period of three of four years I'll have enough to insulate my
loft and I'll do it and I'll do it when I want to do it. Thank
you very much indeed, local authority"?
(Ms Batley) May I make a point on that, which
is that utilities generally are going to cherry-pick the best
customers and so ESCO-type services are not going to target the
fuel poor. The fuel poor are not going to receive a £60 saving
from the deregulated market and so a local authority ESCO is really
the only way that you are going to target the fuel poor and enable
them to make an investment in energy efficiency when they have
a very low level of capital available to them.
Mr Savidge
567. I realise this may go slightly beyond
the remit of what we are discussing, but given the problem you
have talked about in relation to duties, I know that in Scotland
we have had discussions as to whether it would be better perhaps
to have a power of general competence for councils to do those
things which they are not forbidden from doing. Do you think that
might be a helpful way forward?
(Cllr Green) I feel it could well be from the
local authority point of view because I remember the extreme frustration
of my fellow councillors when we found we could not continue with
the ESCO, because fuel poverty is very high on our agenda and,
as I say, we were extremely frustrated, and so a power of general
competence would certainly be welcome.
Chairman
568. When you are in this situation and
you have an idea which you feel might be slightly ultra vires,
outside existing legislation, what would happen if you simply
went ahead? Would you get a legal challenge inevitably?
(Cllr Green) We believed there was a possible
legal challenge on the way if we had gone ahead.
569. Who from?
(Cllr Green) Energy brokers, supplies and installers,
we believe.
(Mr Allsopp) It could have been from anybody obviously.
The dilemma that we faced as officers in advising political colleagues
was that if we recommended a project to move forward and then
it was found to be ultra vires, then that could impose
surcharges. We felt as technical officers that we could not make
that recommendation, and that was backed up by barristers and
counsel's opinion.
570. So you would not want Cllr Derek Green
to have a £25 million surcharge? It would have been a bit
unfair. I understand that.
(Cllr Green) I do not think my chequebook would
stand it.
Joan Walley
571. Could I ask, in terms of the work that
you do on the LGA, where your discussions on this have actually
led you to and whether or not that sort of wider national partnership
of local authorities is in a position to put forward constructive
ways round this or ways of addressing how local authorities can
deal with fuel poverty?
(Mr Allsopp) I think the document that has come
out of the LGA on sustainable communities is an excellent document
and personally I think that sums up the scenario for local authorities
and, indeed, other organisations and it is one certainly that
the Government ought to take on board. We fully endorse all the
recommendations. We have an excellent working relationship which
has been established over many years with the LGA and LGMB and
what is coming to the fore now is probably more joined-up thinking
with the DETR and the Energy Saving Trust and we certainly welcome
that.
572. But is there a timetable and a mechanism
for actually implementing that?
(Mr Allsopp) The LGA position statement?
573. Yes?
(Mr Allsopp) I am not quite sure actually. It
has only just been launched and obviously those views have been
presented to your own Committee, have they not?
Chairman: Yes.
Mr Robertson
574. Could we look at the Home Energy Conservation
Act and I wonder if you could give me your opinion. How effective
has that Act been in promoting energy efficiency?
(Cllr Green) We feel that the Home Energy Conservation
Act has been an excellent piece of legislation, certainly with
regard to moving energy efficiency on to the political agenda.
Prior to this domestic energy figured very low on the agenda and
was relatively dormant at the local level until the Act came along.
The Home Energy Conservation Act also facilitated the HECA action
funding machine that has been put in place.
(Mr Allsopp) I would like to comment on that as
well. I think that the HECA deadlines imposed by the requirement
to submit reports to the Secretary of State, as I indicated, certainly
focused the Partnership but it applies to the domestic sector
only and, as I said earlier, bestows no powers on local authorities
to deliver anything. All you are required to do is actually produce
a report.
575. You feel it should go further than
that?
(Mr Allsopp) I think there is value in extending
HECA certainly beyond the domestic sector. I certainly think that
local authorities require more support in delivering HECA, particularly
on the action proposed, and I think the Act probably needs a bit
more teeth to it, not just to produce a report. As I said earlier,
I think legislation and regulation are the driving forces and
people react to legislation and regulation and it is accepted
as probably the best value for money option, provided there is
a support mechanism in funding and funding available to local
authorities actually to deliver it.
(Mr Pickles) Chairman, one of the key benefits
of the Home Energy Conservation Act has been to create a greater
understanding as to the holistic benefits of the energy efficiency
investment in the housing stock, how energy efficiency can actually
deliver on economic, social and environmental outputs, and the
Act has enabled the authorities to try and put some numbers to
these benefits. At the end of the day we are all thinking in terms
of the pound, so just within Newark and Sherwood alone we have
identified that if we could persuade our householders to invest
in terms of a five-year payback there is the opportunity to produce
£14 million into their collective pockets. By coincidence,
the downsizing of the coal industry in Newark and Sherwood actually
cost our local economy £14 million, so with our local key
decision-makers and members, through equating that figure, there
is a definite economic regeneration issue which has been highlighted
through the work we have done through the Home Energy Conservation
Act.
576. May I take it slightly further, and
it links to the previous question which was asked as well. When
we talk about energy efficiency, in effect we are using less energy.
We spoke to the gas and electricity regulator recently and we
asked him about the perverse incentive which there is to achieve
lower energy prices if one uses more energy. How do you feel that
affects your ambitions?
(Mr Pickles) One of the key focuses of the Local
Authority Energy Partnership is fuel poverty, so we instantly
have a dilemma, do we not, where increased price is creating significant
difficulties? Certainly we would estimate something like 20-24
per cent. of households within Nottinghamshire and Derbyshire
have a fuel poverty issue problem. I think simplistically our
reaction to that is that what this does is identify a need to
regulate that. Certainly low energy costs do have significant
benefits to those 25 per cent. of households that have severe
affordability problems and it is going to take some many years
to get those particular homes up to a standard where affordable
warmth can be widespread throughout the region.
Mrs Brinton
577. I want to reinforce this message about
the lack of teeth. You have said it is an excellent Act, it is
an excellent piece of legislation, and yet you seem to be contradicting
yourself by saying it is warm words really and where is the action
and where is the force behind it. Obviously Nottinghamshire and
Derbyshire are excellent authorities and I include my own area
as well, Peterborough, in terms of the environmental aspects and
energy, but surely it is true to say that not every single local
authority in the United Kingdom is so advanced? So would you agree
with me that this requirement to write a report might get some
of the authorities, yes, going through the motions and doing the
report and then doing nothing at all? Would you agree with that?
(Cllr Green) Absolutely.
(Mr Pickles) Could I also say that it is our assessment
with current carrots and sticks of regulatory framework that we
will only be able to deliver on 40 per cent. of the HECA target.
Chairman
578. Do you assess the local authorities
in your area for their performance?
(Mr Pickles) Our assessment is limited to the
Newark and Sherwood locality specifically, but obviously we have
close contact with our colleagues within the Local Authorities'
Energy Partnership.
579. Do you have any evidence as to whether
there are wide differences in the performance?
(Mr Allsopp) I think within any Partnership there
are lead partners doing more than others would be doing. That
was one of the bases for forming the Partnership, particularly
in the early days when we had to write the reports.
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