Decision

To modify the existing contract with PH Jones for ‘Safety checks, servicing, reactive repairs, planned maintenance and new installations for domestic gas heating and hot water systems’ in accordance with regulation 72 of the Public Procurement Regulations to permit the installation of ground source heat pumps.

Reasons for the decision

Cheltenham Borough Council managed to secure £3.68mn of funding from DESNZ under the Warm Homes Social Housing Fund in 2025, to allow delivery of retrofit measures to properties with the aim of achieving EPC C. DESNZ has rules in place to ensure spend is met, and one of these includes tight time schedules. We are timebound with the low-carbon heating element to practically complete by October 2027, but a significant amount of spend must be met within the financial year by March 31st 2027.

Due to the specialised nature of GSHPs, the need for site specific design and the limited number of specialists available it is considered unlikely that it would be possible to procure a new contract and meet a significant amount of grant spend before 31st March 2027. To secure the funding the decision has been made to instead, modify the existing contract with PHJones in accordance with regulation 72 (1) (b) (ii) of the Public Procurement Regulations. This regulation allows for:

‘additional works, services or supplies by the original contractor that have become necessary and were not included in the initial procurement, where a change of contractor would cause significant inconvenience or substantial duplication of costs for the contracting authority, provided that any increase in price does not exceed 50% of the value of the original contract.’

Background information:
In 2025, CBC was successful in its bid to receive grant funding under the Warm Homes Social Housing Fund, enabling it to deliver energy efficiency and retrofit measures to 425 CBC owned properties from 2025-2028 at a total project value of £7,040,446.22.

The initial bid included commitment to decarbonising properties and transitioning from fossil fuel boilers to low carbon heating.

Cabinet decision 08/04/2025: Decision to accept Warm Homes Social Housing Fund Grant of £3.688 million offered by DESNZ is agreed.

Alternative options considered

The council considered two alternative options:

- Procure the works through a framework: rejected due to the time to procure the works

- Return the funding to the government: rejected as it is a substantial amount and would not assist with Cheltenham Borough Council’s aspiration to achieve net-zero carbon emissions

It was determined that contracting a third party would provide the necessary skills, resource and capabilities needed and be lower risk.