The Overview and Scrutiny Committee met to discuss a report on B&D Energy Ltd, focusing on its progress, priorities, and financial performance, and to agree on a revised scope for an in-depth scrutiny review on learning disabilities and autism, narrowing the focus to Education, Health and Care Plans (EHCPs). The committee agreed to the revised scope and work plan for the EHCP scrutiny review.

B&D Energy Ltd

The committee discussed the B&D Energy Ltd report, hearing from Neil Pearce, Head of Sustainability and Climate Change, and David Lewis, Managing Director of B&D Energy Ltd. The report provided an overview of the company, its progress, and key priorities.

David Lewis stated that the appointment of industry experts to the board and valuable investment into infrastructure had been fundamental to getting the company on track.

Financial Performance and Projections

Councillor Waker questioned the large difference between the expected gross profit of £2.17 million and the operating profit of £654,000 for 2025-26. David Lewis clarified that the cost of sales only included the cost of energy, while operational expenditure covered IT, maintenance, and salaries. Councillor Waker requested a breakdown of these costs. David Lewis added that B&D Energy uses some council services, such as IT infrastructure, health and safety, and HR advice, but most services are their own.

Councillor Paul Robinson asked about governance structures and risk management, particularly concerning potential delays in new projects. Neil Pearce explained that Huntsford Consultancy had reviewed governance arrangements in 2022, leading to recommendations adopted in the business plan. He said that in addition to the shareholder panel, there is a corporate oversight board and regular discussions with the head of place and regeneration and inclusive growth. David Lewis added that the board includes experienced industry experts, and they take their fiduciary duties seriously. He said that while most projects are on track, some risks remain, particularly towards the end of the plan. He said that a risk analysis identified connection volume as the biggest risk, and that if connection volumes are lower than projected, it could delay or reduce dividends to the council.

Councillor Sando asked about debt recovery measures and how B&D Energy would balance this with protecting vulnerable customers. David Lewis said that they would collect debt through pay-as-you-go systems, working closely with all customers and offering payment plans. He added that B&D Energy has an agreed loan repayment schedule with the council and will endeavour to meet it.

Councillor Warby, chair of the shareholder panel, said that the expectation of dividends from 2030 onwards is reviewed annually, acknowledging that B&D Energy is a growing business that needs loans to expand. She said that the decision to delay dividend payments was pragmatic, to avoid overloading the company while it is still building infrastructure.

Network Capacity and Decarbonisation

Councillor Ingrid Robinson raised concerns about the partial handover of works from Countryside at Beacon Tree Heath. David Lewis responded that Countryside had engaged Watkins Energy, who are retrofitting and upgrading the system, and that B&D Energy expects to adopt and run it by the end of the year.

The Chair noted that Section 4.6 of the report outlined that energy usage in LBBD is lower than the benchmark, but there wasn't the capacity to supply for the demand in the winter of 2024-25. David Lewis explained that the energy centre was built for Gascoignes Phase 1 but is now serving a wider area, including West, Phase 2, and Abbey Quay. He said that the network has expanded, but the pace of expansion of capacity hasn't kept up. He said that work is underway to ensure this doesn't happen again, and that while there were some outages last year, none were more than eight hours long. He said that B&D Energy has contingency plans, including standing contracts with temporary boiler suppliers.

The Chair also raised concerns about the gas-fired boilers and the long-term commitment to decarbonise the system. David Lewis said that gas is currently the most cost-effective and reliable technology, and that fully decarbonising would involve expensive and new technology, which would increase costs for residents. He said that the business plan accommodates decarbonisation within a five-year horizon, and that a heat pump will be installed in the energy centre in Gurdwara Road to meet the requirements of new buildings. He said that B&D Energy will match its decarbonisation profile to legislation and the regeneration profile of the town.

Councillor Warby added that the council spends a lot of time discussing heat pumps with B&D Energy at the shareholder panel, and that preliminary work has been done to assess the capacity of the River Roding to supply heat pumps. She said that there are also opportunities to use Becton Sewage Treatment Works.

Neil Pearce added that the council is in conversations with stakeholders about decarbonising the network, but it is a difficult process because a reliable source is needed nearby. He said that the council is in advanced conversations with Thames Water and is exploring the potential of using waste heat from data centres in Dagenham East. He also mentioned that the council has £6 million of grant funding to support the water source heat pump option.

Tariffs and Billing

Councillor Rahman asked how often tariffs can be reviewed and subject to change, and whether there would be any changes in tariffs for residents with communal boiler systems. David Lewis said that tariffs are reviewed annually on 16 April, aligned with the market and the price of gas. He said that B&D Energy buys gas annually using the same strategy and procurement team as the borough, and that they buy with other local councils to ensure economy of scale. He also clarified that B&D Energy does not have any communal boiler systems in its network, but that they may help out with those systems in the future.

Councillor Youssef referred to Section 2 of the report, where it was admitted that the IT system is not fit for purpose in terms of reporting on KPI¹. David Lewis clarified that B&D Energy uses the council's base infrastructure for services like the Microsoft suite, but that the systems for interacting with residents are lacking. He said that the company is building a CRM system using the council IT team and the Freshdesk platform, and that they are out to tender for an updated billing platform.

Councillor Youssef also asked about the testing period for the new IT infrastructure and how B&D Energy would ensure it is fit for purpose, as well as the substantial residential debt build-up and how it would be managed. David Lewis said that the full set of Ofgem requirements is not expected until 2027, but that his aim is to have the system selected and implemented starting this year. He said that debt is running at about 3% of revenue, which is too high, and that they want to bring it down closer to 1%. He said that B&D Energy is aware that some tenants are using above their ability to pay, and that they need to bring in pay-as-you-go systems to allow people to manage their consumption. He said that B&D Energy offers repayment plans and has a vulnerability page on its website. He also said that he personally conducts home visits to talk to residents face-to-face.

Councillor Hassan asked if people struggling to pay would be on the same tariff as someone paying by direct debit, or if it would be a more expensive tariff. David Lewis confirmed that the tariff is the same, although there is a small discount for direct debit.

Customer Service and Contingency Planning

Councillor Masson raised concerns about the lack of consistent energy provision in the William Street Quarter, where residents are angry and upset. She asked how she could trust that the massive investment over thousands more houses is going to come true, and why customers have been treated so badly. She also asked what contingency planning has been done to ensure there's resilience in the system. David Lewis responded that William Street Quarter and Ann Mews are not yet on the network, but that work is underway to get them connected. He said that there is an issue with the supply of heat into those properties, which is on temporary boilers, and that they need to get it onto the heat network. He said that B&D Energy is committed to giving good customer service and that their technicians can connect remotely and respond quickly. He said that the most important thing is to get the build finished at Gascoigne and get that extra capacity. He said that if there is a catastrophic failure, they have contingency plans to bring in temporary boilers.

The Chair asked why B&D Energy is having to meet a greater capacity than it was designed to meet. David Lewis said that it is about the pace of construction and building connections matching investment in the infrastructure, and that the construction and expansion of the energy centre at Gascoigne and the strategic energy centre in Gurdwara Road are behind programme.

Councillor Rahman asked what happened during the winter of 2024-25, whether customers who lost service were fully compensated, and what the complaints procedure was. David Lewis said that B&D Energy voluntarily subscribes to the Energy Ombudsman service and has a transparent complaints procedure on its website. He said that they have only had one situation that has gone as far as the Energy Ombudsman where they have decided that B&D Energy has not acted in the right way.

Councillor Rahman also asked about the SLA² standard of four-hour turnaround and what B&D Energy is going to be doing about that. David Lewis said that they have mitigation plans in place and can quickly avoid some of those issues. He also said that they provide heating to a number of properties but don't deal with the connection or the billing system, and that in those cases, the council or other companies pick that up.

Councillor Rahman asked about the capital payment that was due back from the Gascoigne Energy Centre and who is picking up the rest of that bill. She also asked how B&D Energy would overcome the regulation that if they exceed 20% of private companies connecting to the service, they will be subject to fall outside the council's procurement framework. David Lewis said that they have agreed a reduced price for the Gascoigne Energy Centre with Neil Pearce and the inclusive growth team, and that the capital will get transferred from B&D Energy back to the council when the system is finished. He said that they are already exceeding the 20% threshold and don't consider themselves to be a tech or company. He said that they generate significant revenue from leisure centres and other commercial customers, and that they follow the Procurement Act when they go for procurement.

Councillor Robinson asked if the council was going to get some of the revenue back. David Lewis said that they are still investing and need to keep investing in their system, and that there is not a surplus at the moment to offer back to the council. He said that they will service their loans but won't be providing dividends probably until after 2030.

Councillor Waker asked about price comparisons and whether the prices include standing charges. David Lewis confirmed that they do include standing charges. He said that it is difficult to compare heat prices with gas prices because B&D Energy is providing heat after the boiler, and that the only comparison that exists is the Heat Trust benchmark. He also asked whether the profits are subject to corporation tax. David Lewis said that they are, but that they will benefit from a lot of deductions and capital allowances, and that he doesn't expect corporation tax to affect the business for a long time.

Updated In-Depth Scrutiny Review Scoping Report: Learning Disabilities and Autism

The committee considered a report on the updated in-depth scrutiny review scoping report on learning disabilities and autism. Sal Asghar, Director of Strategy, presented the report, explaining that the review's scope had been narrowed to focus on the EHCP process, understanding pressures on the service, schools, and parents, and gathering data on potential hotspots within the borough.

Key Lines of Inquiry

The proposed key lines of inquiry (KLoE) are:

• KLoE 1: The National Context and LBBD Inspection outcome
• KLoE 2: EHCP process and key challenges
• KLoE 3: Demand from those moving to the borough
• KLoE 4: Data Gathering

Public Input

Nicola Willingham, a member of the public, raised a question about the legal threshold for conducting an EHC needs assessment and why the council fails to apply this legal test consistently. She also noted that this inconsistency forces parents down the first-tier tribunal route, costing approximately £27,000 per case.

Councillor Achilleos said that this would be looked into as part of the process and key challenges under key line inquiry two. He also invited Nicola Willingham to speak at one of the informal meetings to hear her take on things and how parents going through this process see how the council are dealing with it and how the council could possibly make it better.

Committee Discussion

Councillor Waker suggested inviting other parents to share their experiences alongside Nicola Willingham. Councillor Robinson raised concerns about schools not receiving adequate information about children with SEND needs, even without an EHCP. Nicola Willingham explained that schools often lack access to necessary information and resources, leading to children being placed on a SEND register without proper support. She also stated that schools are being told by the LA that they can only submit three EHCP requests per term.

Nicola Willingham stated that Parliament are tabling a debate on the removal of the legal rights for children and families through the EHC process on Monday 15 September, and that the SEND Tribunal judges have been put on notice that their services are no longer required from April 2026.

Councillor Yusuf expressed shock at the news that it would be made more difficult for children with special needs to access the necessary provision, and also at the three allocation limit per term from each school.

Councillor Rahman suggested including a school representative, particularly from Gascoigne, and officers to answer questions about the EHCP process.

Councillor Masson said that EHCPs aren't really worth the paper they're written on, and that the resources and funding aren't available. She said that the committee should remain focused on what they want the outcome of the inquiry to be, given that it's a massively shifting playing field from next Monday.

Councillor Waker said that the experience of the medical reports may need looking at, and that early intervention can save a lot of this.

The committee agreed with the review.

Work Programme

The committee discussed the work programme and agreed that it needed to be updated with the key lines of inquiry and discussions on the EHCP review. Councillor Achilleos proposed a report from adult social care on the outcome of the CQC³ inspection in January.

Councillor Waker raised concerns about outstanding figures from Reside, which he had requested multiple times. Sal Asghar said that the figures would be chased up and sent to the committee.