EXCLUSIVE: LibDem-controlled council accused of ‘double dipping’ after it reveals it ‘won’ £310,000 grant to fund work on extending its misfiring heating network… even though that work has already been completed. CARL SHILTON, investigations editor, reports
Last week, Sutton Council reconvened its SSB, its shareholdings board committee, to consider the adjourned discussion on SDEN, the Sutton Decentralised Energy Network Ltd, the loss-making council-owned company that was heavily criticised in a recent independent report by accountancy watchdog CIPFA.
At tonight’s full meeting of the council, the CIPFA report will be up for debate again, in what could prove to be one of the livelier nights in the half-century of Sutton civic history.
The CIPFA report castigated the council for its inflated financial model for SDEN, what has been shown to be a deliberately faulty business plan that relied on non-existent homes and non-existent government grants to order to reach the financial threshold the company needed to proceed.
SDEN has been proven to be a blatant effort by Sutton’s ruling LibDems to greenwash the incinerator, where Viridor is due to benefit from a £1billion waste contract over 25 years from four south London boroughs, including Croydon.
SDEN is supposed to use “green energy” from the polluting Viridor incinerator at Beddington to heat homes at the New Mill Quarter estate at Hackbridge, although after nearly four years, it is still yet to deliver as much as a single kettle’s-worth of boiling water from the incinerator.
At last week’s meeting of the shareholdings board, opposition councillors slammed SDEN and the council for rehiring Simon Woodward, the consultant who was heavily involved in producing the discredited financial model for the first phase of SDEN.
Tim Crowley is the former leader of Sutton’s opposition Conservatives.
At the meeting, he described the decision to re-hire Woodward Energy Consulting Ltd for another two years, on a deal worth £800 per day, as “madness”.
“Einstein defined madness as doing the same thing over and over again and expecting a different result,” Crowley said.
A director of SDEN, operational manager David MacIntyre, tried to deflect and deny that hiring the consultancy run by Woodward was in any way repeating what the council had done already.
“I agree…,” MacIntyre said, “if we were to do the same thing over again, it would be madness.”
Earlier in the meeting MacIntyre had presented his own document, in response to the CIPFA report, that defied any sense of culpability, announcing that the council had “won” a £310,000 grant from the government’s Green Heat Network Fund to develop “Phase 2” of SDEN, an extension of the network into Sutton town centre.
“This funding will allow us to undertake a process to determine the specific costs, so we can then produce a techno-economic model and assess the financial viability of the extension, and this will start to take shape and move forward in the coming weeks,” MacIntyre told the meeting.
MacIntyre then gave more details of the work to be done with this new grant. “It will be for detailed designs, specific areas for back-up boiler locations. We’ll also undertake detailed surveys of underground network routes.
“It will also include technical support we’ll require, then there’ll also be funding we require for legal and technical advisers.”
While MacIntyre may have been trying to pull the wool over the eyes of less-well-briefed councillors, research by Inside Sutton has confirmed that nearly all this “route proving” work has already been done, with another grant, this time of £73,000 from the Great London Authority.
This particular study was undertaken by AECOM. Having been successful with their pitch for the job in 2019, their report was completed in 2020. Overseeing the work then was Woodward Energy Consulting Ltd, the same consultancy recently re-engaged on a mind-boggling daily rate.
It has also emerged that Simon Woodward himself was on the selection panel that chose AECOM as the contractor to SDEN. Also on the selection panel was a Sutton Council official, and Dave Culver, of Culver Energy Consulting Ltd.
Culver and Woodward’s working relationship goes back several years.
Culver has been the secretary of a trade association, the UK Decentralised Energy Association. Simon Woodward is the founder and chairman of the UK Decentralised Energy Association.
Culver has also worked at Cofely District Energy Ltd, where Woodward was a director for 11 years.
The report produced by AECOM was highly detailed. Inside Sutton has the full specification for the work that was conducted around two years ago. These appear to be a duplication of the proposed new works described to last week’s Sutton Shareholdings Board.
The specification was divided into three “work packages” – building and development site data; heat network routing and design; and capital costs. Last week, SDEN director MacIntyre identified these very same work areas as the targets for using the new £310,000 grant.
The AECOM report has never been published. It has been referred to loosely in SDEN’s business plans.
Previously, AECOM produced another related report for Sutton Council, the Sutton Town Centre Energy Masterplan. This report, costing another £75,000 of public money in 2018, highlighted SDEN as the key to low carbon energy in Sutton town centre and at the proposed London Cancer Hub at Belmont.
However, that report has never been published nor even identified in the paperwork going to council committees. In the tender documents for the second AECOM report, the specification says that the winning bidder will have a copy of the report made available, implying it is a restricted document. When Merton and Kingston councils undertook similar works funded by the GLA, their reports were made public.
SDEN board minutes show that Woodward was heavily involved in a project that recommended that SDEN should be central to the council’s future heating needs in the town centre.
At last week’s shareholdings board meeting, Conservatives Crowley and Neil Garratt threw many questions at council officials.
Where had all the money, nearly £1million on consultants, been spent, asked Crowley.
Where were the reports?
The committee chair, LibDem councillor Sunita Gordon, refused to allow these important questions to be answered.
MacIntyre admitted that the cost of building any heat network link to Sutton town centre – stated to be up to £35million at this meeting; Simon Woodward told the same shareholdings board as recently as March this year that it would cost only £15million – would have to be subsidised by government grants.
MacIntyre also admitted that Woodward Energy Consulting would be engaged on the financial modelling of the Phase 2 works. He claimed that as Woodward Energy Consulting did not run SDEN, their work was only “advisory”, as consultants.
But documentary evidence obtained by Inside Sutton show that until MacIntyre was appointed in May this year, Woodward had, through his company, effectively run SDEN as a shadow director. This is clear from the GLA job specification.
“This seems like double-dipping, applying for funds to effectively repeat work that has already been completed,” Crowley told Inside Sutton.
“I’ll be asking the government department, BEIS, to investigate whether the grant application made clear that much of the work had already been done. If the council claims the work done was insufficient, then you have to question the quality of the commissioning, specification and oversight of the work.
“It makes me question what exactly the £310,000 will be used for, and I’ll be demanding transparency from the council on how that money is spent.”
“Calamity” Jayne McCoy, the deputy leader of Sutton LibDems who has so far been relatively untouched by the SDEN debacle that has happened on her watch, said, “We have actually delivered this, it is in place, it is up and running, it is working.
“Why wouldn’t you want to re-employ consultants that have done good work?”
On figures publicly available, Woodward Energy Consultancy Ltd has received at least £377,000 in respect of work for SDEN and Sutton Council.
Referring to Woodward and his lucrative consultancy company, McCoy said, “What is it exactly you think he hasn’t got right?”
Perhaps McCoy had forgotten to read the CIPFA report.
“Yes, the financial modelling was simplistic, but this project has delivered,” McCoy said, contradicting every claim she had ever made about the financial model for SDEN being water-tight, notwithstanding that what SDEN has “delivered” is an unreliable monopoly heating supplier and a near-£400,000 loss.
McCoy then insisted that the CIPFA report said a previous report into SDEN’s financial operations, by KPMG, which she and the LibDem council had tried to keep secret, focused too narrowly on financial impacts, rather than the wider benefits of the scheme.
“Where does it say that?” Crowley asked.
“I haven’t got the report with me,” said McCoy.
“Here you are,” said Crowley, handing McCoy a copy of the report.
McCoy then spent the next 10 minutes of the meeting turning the pages of the CIPFA report, which she had helped to commission, desperately trying to find something that wasn’t there.
Read more: Heat network’s plan depends on 75 homes that don’t exist
Read more: Opposition renews call for full-scale fraud probe into SDEN
Read more: Sutton heat network director quits as fraud inquiry begins
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