Loans

Project Proposal – Report to Council: Footpath Lighting Upgrade SOX to LED

Dated: 10th April 2019; updated: 4th June2019

Introduction

The Council is the lighting authority for Footpath Lights in the Parish. Street Lights, of which there are 3 along Main Street, are under the auspices of Bucks CC. Footpath lights are not necessarily over footpaths exclusively.

Under EU legislation, current lighting technology will be discontinued in 2020. Therefore, ongoing replacement / maintenance will become increasingly difficult, expensive & time consuming.

By resolution of Council, it was decided to explore Council eligibility for Government project funding currently available as an interest free loan repayable over 5 years. This comes from the Ministry of Housing, Communities & Local Government and has to be progressed through their appointed agent, Salix and with approval of the local council association.

To this end, the light inventory was established with a supplier and two quotes for upgrading to LED were sought. The preferred option was submitted to Salix and subjected to their rigorous applicant eligibility criteria.

Further to extensive discussions and deliberation over technical detail, Salix have confirmed the following could be a basis for granting funding under the current scheme.

They are aware that any application would be subject to resolution of Council.

Update: a Resolution to Borrow was made by Council on 25th June 2019, minute 1906.05,(v), confirming also that there would be no associated increase in precept necessary. This was posted to the web site and notice board 5th July 2019

Proposal

The project value is quoted at £8010.00; Salix would loan 55% of that - £5105.00.

So, Council would need to make an initial one-off contribution of £2905.00 and then make re-payments to the following schedule:

  • 1st repayment starts approximately 6 months after the project has completed and loan fully paid out. e.g. if the project completed in September 2019, the 1st repayment would be March 2020.
  • Repayments are taken twice a year via direct debit, e.g. March and September, or April and October.
  • Whilst the current technical payback is 6.94 years, the loan would need to be repaid within 5 years at the 0% interest that Salix offers.
  • This means an annual repayment schedule of about £1000 per annum, payable in two instalments of about £500 each, over 5 years.

The proposal is based on industry standard criteria for annual burn hours & wattage so consumption in kWh can be estimated. This would indicate a reduction of annual kWh from 9536 to 5443 post project – a saving of some 43%. Then, using the lower of two current pence/kWh rates & forecasting a 10% increase over 5 years, the indication is for at least a 43% saving in running costs (currently £3600pa) and an almost negligible maintenance bill over 10 years (currently £1000pa). The 55% Salix contribution is based on £172 per tonne of CO2 over the lifetime of the project.

It is important to note that;

Prior to the parish council borrowing a sum of money, approval must also be granted by the Secretary of State at the Ministry for Housing, Communities and Local Government (MHCLG), formerly the Department for Communities and Local Government (DCLG). This is achieved by:

  • Obtaining and completing an application form with the local County Association (B&MKALC) affiliated to the National Association of Local Councils (NALC)
  • Once completed the form is checked by the local County Association, and providing no obvious errors are found, it is sent to MHCLG.
  • The Secretary of State’s decision is sent directly to the Clerk of the Parish, with a copy also sent to the Chair of the council and the local County Association.

Author: B. Martindale, Responsible Finance Officer, Grendon Underwood Parish Council Dated: 4th June 2019

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