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Background
 
Since November 2023, there have been detailed
discussions about the impact of a new charging scheme being applied
to those constructing in the highway.  This is a West Sussex
County Council scheme, introduced in December 2022, which was
introduced subsequent to the letting of the Heat Network
Contract.  As a groundbreaking
project in the UK, there is no guidance for Lane Rental Scheme
authorities on how to treat low carbon heat networks in relation to
charging.  There are currently policy differences between the
Dept for Transport and Department for
Energy Security and Net Zero.  As a result, negotiations at
the highest level (Ministerial) have been undertaken in recent
weeks, to explore the removal of these charges from the
project.  Ultimately this was not successful, and a very
recent and urgent decision was taken by DESNZ to provide additional
financial support to the project.  This decision did not come
in time for the use of normal decision making processes, with a
deadline of March 31st for the Execution of the Concession
Agreement with the operator Hemiko.
 
Decision 
 
The Chief Executive has authorised her use of Urgency
Powers to enable the Council to 
approve an amendment to the Heat Network Investment Project
Local Authority Grant Funding Agreement, accepting an additional
£1.9m of funding in support of the Worthing Heat Network
Construction Phase.  The contract and further award of funding
is of pressing importance to the financial integrity of the Council
because:- 
 
The HNIP LA Grant Funding Agreement was
originally
approved on 11th October
2021, where the
following grant amounts were approved

£950,000 grant funding for
Commercialisation;

£3.158m grant monies for Construction;
plus

£1.275m loan funding (at 0.01% interest) for
construction.

 
An additional £225,000 was subsequently
approved by the Worthing Joint Strategic Sub Committee for
2022/23.
 
The revised agreement incorporates an additional and
further tranche of funding for the financial year 2023/24 for
Construction to the value of £1.9m to provide further support
to the Construction Phase of the Heat Network.
 
This is set out in the revised Grant Funding
Agreement.