ADD2036 London Boiler Cashback Scheme administration

The London Boiler Cashback Scheme was launched on 2 February 2016 (MD1606) to provide 6,500 owner occupiers and London Rental Standard (LRS)-accredited private landlords each with £400 cashback on replacement of a working 70 per cent or less efficient boiler with a new 90 per cent or above efficient boiler or renewable heating generation. The Energy Saving Trust (EST) was contracted by the GLA to manage and administer the scheme to the end of July 2016, at a cost of £148,000.
As at 20 September 2016, over 8,700 people had applied, or were in the process of applying, to the scheme. Of these, around 3,200 had been issued with a cashback voucher and a further 230 are likely to be issued with vouchers shortly. The scheme has so far contributed to the replacement of around 2,200 boilers (that is, around 2,200 households issued with a voucher have so far submitted a claim for their cashback). These boiler replacements will save an estimated 3,300 tonnes of carbon dioxide (tCO2) and £748,000 in participating households’ fuel bills every year.
Demand has been steady since the launch. However, it is significantly slower than was expected when the scheme was originally designed. First, this is mainly because - two days before the launch - the then Mayoral administration changed eligibility within the private rented sector (PRS), limiting the scheme to (LRS)-accredited landlords (rather than all private landlords). Second, there was very limited marketing of the scheme during the pre-election period and following the Mayoral election.
Based on uptake to date, and with no renewed marketing, it is estimated that the scheme will have issued all 6,500 vouchers by around June 2017. However, as demand will almost certainly increase as the winter approaches, this is likely to happen far sooner.
GLA officers have negotiated with EST for the cost of administration from 1 August 2016 to be at a lower monthly rate than that in the initial contract (£7,117 compared with £12,333). An exemption from the requirements of the GLA’s Contracts and Funding Code to seek competitive tenders for such services is sought, on the grounds that the supplier is unique in its ability to provide compatibility with an existing service.

The new contract would enable a continuation of the scheme until all vouchers have been issued, which would:
• save carbon – an estimated 9,750tCO2 per year
• cut fuel bills – an estimated £2.2m per year (around £340 a year for each beneficiary)
• improve air quality - reducing NOx emissions by 8000kg per year
• help tackle fuel poverty and prevent excess winter deaths
• catalyse additional energy efficiency improvements to the home (e.g. heating controls and insulation)
• create investment of at least £15m or more in new boilers/renewable heating systems - helping to sustain work for the low carbon and heating sectors across the capital.

The GLA is taking appropriate steps to ensure that there are no potential negative impacts expected on those with protected characteristics. Those with protected characteristics will gain from the positive benefits of this scheme in equal measure should they participate in the scheme, and there will be equality of access to participate in the delivery and benefit from the scheme, without discrimination.

a) Risks and issues

b) Links to Mayoral strategies and priorities

Continued administration of the scheme will contribute to meeting the following Mayoral priorities:
• London becoming a zero carbon city by 2050
• investing in older homes to make them more energy-efficient
• restoring London’s air quality to legal and safe levels.
c) impact assessments and consultations
There was extensive consultation with industry, government, local authorities and many NGOs during the development of the scheme – and there is continuing support for the scheme across all sectors. The project is also being evaluated, through an online survey of all beneficiaries.

5.1 This decision seeks approval to award the contract to the Energy Savings Trust for the administration of the London Boiler Cashback Scheme for a maximum of seven months, at a monthly cost of £7,117 (a maximum of £49,819). The initial contract has been approved by MD1606 for the total amount of £148,000 to the end of July 2016.
5.2 Proposed expenditure is available to be used from RE:NEW budget within Housing and Land directorate and will be utilised in 2016/17 financial year. Any changes to this proposal, including a continuation beyond the period stated above (or a request for additional funds), will be subject to further approval via the Authority’s decision making process.

6.1 The foregoing sections of this report indicate that:

6.1.1 the decisions requested of the Assistant Director fall within the powers of the GLA, to do anything which may be considered to be facilitative of or conducive or incidental to the exercise of its functions in a way which promote the improvement of the environment in Greater London; and

6.1.2 in formulating the proposals in respect of which a decision is sought officers have complied with the GLA’s related statutory duties to:

(a) pay due regard to the principle that there should be equality of opportunity for all people;
(b) consider how the proposals will promote the health of persons, health inequalities between
persons and to contribute to the achievement of sustainable development in the United Kingdom; and

c) consult with appropriate bodies.

6.2 Section 4.1 of the GLA’s Contracts and Funding Code (“Code”) requires that a tender exercise be
conducted for services with values of that proposed or that they be called off from and accessible
framework. However, section 5 of the Code provides that exemptions from that requirement may be approved where the supplier is unique in its ability to provide compatibility with an existing service. Officers have indicated, at section 1 of this report, that this is the case here. Therefore, if the Assistant Director is satisfied with the content of this report they may approve the exemption sought. If so approved officers must ensure that appropriate contract documentation is put in place between and executed by the GLA and EST before any commitment is made to the scheme or commencement of such services.

6.3 Officers must also ensure that the proposed award of grant funding to end recipients of the London Boiler Cashback Scheme (here as part of the proposed voucher scheme to be administered by EST) is administered fairly, transparently, and in a manner which is considered to afford value for money and appropriate funding terms are incorporated before any commitment is made to the scheme or such funding.