Birmingham launches £1.3bn Green Deal programme

Published:  06 July, 2011

BIRMINGHAM: The City Council is to launch a tender that could lead to £1.3bn of green retrofit work for 200 000 local homes and commercial buildings.

The council says it would become the leading council for the government's Green Deal, with a retrofit programme in which it would initially arrange £100m in funding on private sector housing work, partly by borrowing £75m.

It is set to tender for its main contractor in the deal with an OJEU notice before the end of July.

A further £300m will be released through private finance if this first stage is successful, while the total programme could see £1.3bn spent on refurbishing 200,000 homes by 2026.

"We are looking to become the first local authority Green Deal provider," said David Allport, programme manager of Birmingham Energy Savers, the council unit managing the project.

"We are planning for the Green Deal go-live in autumn 2012. During July, we will go out to the market to start the process to find our delivery partner."

The key to getting Green Deal funding flowing through the construction supply chain is getting the financial institutions interested, says David Adams, head of carbon and energy at Willmott Dixon. "The local authority model [is] the vehicle for creating sufficient scale for [financial] markets to start to be interested. I think this is a very interesting model indeed and one that is very exciting.

"Financial institutions like working with large numbers, [so Birmingham] is the intermediary to take property-sized sums and convert them to the hundreds of millions," Adams says.

"I think that a range of local authorities will be looking very carefully how this progresses with Birmingham."

Willmott Dixon was "taking an interest" in the council's procurement and talking to a range of authorities about opportunities arising from the Green Deal, he says.

The council expected bids from consortia. They may include energy firms, main contractors, subcontractors and equipment suppliers.

Other councils were likely to follow Birmingham's lead, while other smaller authorities could aggregate demand for retrofit work across their boundaries, said Andrew Mellor, a partner at architect PRP and leader of its sustainability consultancy. However, he warned take-up of the Green Deal could be hampered by inertia from the public.

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