By Matt Jarram, Local Democracy Reporter
Nottingham City Council could bring more of the companies it owns in-house after deciding to take over Enviroenergy last year.
Cllr David Mellen (Lab), leader of the local authority, said a full review is under way to look at the companies it owns as part of its plans to become financially stable.
In November, the Labour-run authority decided to bring council-owned Enviroenergy – which needs £17.5m of investment – in-house.
The authority planned to liquidate the company it had owned since 2001 and take over its operations. It currently provides water and heating to about 5,000 homes and 70 businesses.
The transfer cost taxpayers about £500,000 and came a year after the collapse of Robin Hood Energy, which left taxpayers with £38m of losses.
The council says bringing Enviroenergy in-house is the ‘best way forward’ and saves the council £5m a year as it reduces the amount of waste it has to take to landfill.
Waste is sent to the Eastcroft Incinerator on London Road and the power generated from the steam is then sold to Enviroenergy customers to heat their homes.
But the city council says the company needs around £17.5m of investment so it can continue to provide services to its current customers.
The money will be used to upgrade the heating network – including boilers, meters, pipes and pumps – and the customer billing systems, between 2022 and 2026.
The council said closing down the Enviroenergy heating system was not an option as the complexity of the infrastructure meant its 5,000 customers cannot immediately receive energy from other providers.
At an Overview and Scrutiny Committee on Wednesday, January 5, Cllr Mellen said other companies run by the council could also be brought in-house.
The council owns eight core companies: Nottingham City Homes, Nottingham City Transport, EnviroEnergy, National Ice Centre, Thomas Bow City Asphalt, Nottingham Revenue and Benefits, Blueprint and Nottingham Futures.
Cllr Mellen said: “There is obviously ongoing work with our companies. We said we would review the relationship with the council and all of our companies. We have now taken Enviroenergy in-house.
“Other companies are being worked out and we have agreed a longer contract with Nottingham Revenue and Benefits and work is being done with Thomas Bow to establish the future of that company.
“We will work on to look at other companies in detail and their relationship with us; whether they remain as an independent company or like Enviroenergy are better based in-house, in the council.”
This is part of the council’s recovery and improvement plan to prove to the Government it is taking steps towards financial resilience.
Following the demise of Robin Hood Energy, a government-appointed Improvement and Assurance Board was set up, giving the council until March 2022 to sort out its financial problems.
If it fails to do so, the council could be run by Government commissioners in the future.
Talking about the review on its company portfolio, Cllr Mellen said: “The view of the improvement board is that we need to move more quickly on that but it is a balance of moving quickly and doing it thoroughly.”
Cllr Andrew Rule, opposition leader of the Conservative Group at Nottingham City Council, questioned a recent Section 114 notice served on the council.
It emerged in December that more than £15m of money ringfenced for Nottingham City Homes housing tenants was unlawfully spent on other council services. The money must now be paid back.
He said: “You have spoken about the reviews that have gone off with council companies. How much does the recent Section 114 report put a focus on the review of Nottingham City Homes?”
Cllr Mellen responded: “Clearly there are many implications of that, but I wouldn’t want to rush any decisions about Nottingham City Homes, prejudging the result of an investigation and not doing that work thoroughly.
“We have always said we have to do this work carefully, so we create solutions not create further problems.”