Record or decision:Public Sector Decarbonisation Scheme (Salix Funding) Phase 4:  – Worcester Divisional HQ Police Station

Ref: PCC/D/2024/18

The Police and Crime Commissioner (PCC) has a stated strategic objective to reduce the carbon footprint associated with policing.

Legislation and national policies also include targets to reduce direct carbon emissions from public sector buildings by 75% by 2037.

A recent Mechanical & Electrical Condition Survey identified £5,276,565 worth of required upgrades at Worcester’s Divisional HQ Police Station, including £858,580 for a like-for-like gas heating and hot water system replacement.

Separately, as part of a wider long-term approach to energy use across the estate, a Heat Decarbonisation Feasibility Study has also been commissioned. This identified opportunities and costs associated with decarbonising the heating and hot water system at Worcester Police Station at a total cost of £1,634,554. The feasibility study also identified that Worcester Divisional HQ Police Station will be included in Worcester City Heat Network Zone phase 2 by 2030. Therefore, like-for-like replacements risk incurring penalties of approximately £250,000.

As part of aims to mitigate against future risks and reduce capital costs of a low carbon heating systems the opportunity exists to access ‘blended’ funding from the Public Sector Decarbonisation Scheme (PSDS) Phase 4. A successful application for £775,974 in funding would enable the PCC to decarbonise the entire heating system at the Worcester Divisional HQ Police Station, effectively at no additional cost and mitigate risk moving forward.

PROPOSAL

For the PCC to approve:

Support for a Public Sector Decarbonisation Scheme Phase 4 funding application, seeking to secure £775,974 of funding for West Mercia.

On the premise of securing the above funding, that the PCC supports the replacement of the existing gas heating and hot water system at Worcester Police station with an electric low carbon alternative at a total cost of £1,634,554.

Authority to proceed with the programme of works does not exist without securing the PCDS funding outlined.

APPROVAL OF

West Mercia Police and Crime Commissioner

I hereby approve the above proposal.

PART 1 – NON-CONFIDENTIAL/EXEMPT FACTS AND FIGURES

SUPPORTING REPORT

The Police and Crime Commissioner (PCC) has a stated strategic objective within the Safer West Mercia Plan to reduce the carbon footprint associated with policing.

Other government and national policy supports this position, including: 

• The UK Government’s target to reduce 75% of direct carbon emissions from public sector buildings by 2037.
• The Heat and Building Strategy, which prohibits the installation of conventional gas boilers from 2025 in new buildings and from 2035 in existing systems.

• The Energy Act 2023, which establishes the legal framework for the Heat Network Zoning regulations. This zoning mandates that all public sector buildings must connect to any heat network within the zone, unless low-carbon solutions are already in place. Failure to connect could result in fines of approximately £250,000. 
• That Worcester Divisional HQ Police Station will be included in Worcester City Heat Network Zone phase 2 which will become operational by 2030.

In response to these legislative changes, the PCC is committed to decarbonising its operations by 2050, as outlined in the Net Zero Carbon Strategy 2024-27.

The government has allocated £1.8 billion in grant funding to support public sector organisations in adopting low-carbon heating and to foster the growth of the low-carbon heating market in the UK. The Department of Energy Security and Net Zero offers funding opportunities to public service organisations through the Public Sector Decarbonisation Scheme (PSDS). The funding prioritises the health and education sectors, often allocating up to 70%of the available funds. Additional allocations are provided to police forces, fire and rescue services, the Ministry of Defence, local councils, and other public sector organisations. These funding phases are frequently oversubscribed. The PSDS Phase 4 submission window is now open.

To mitigate these risks and to support access to public funding, the PCC commissioned specialist consultants in September 2024 to:

• Develop a Heat Decarbonisation Strategy for the West Mercia Police Headquarters and District Headquarters, totalling seventeen of the most energy / carbon intensive buildings within the estate portfolio.
• Complete a detailed feasibility study on a larger qualifying ‘pilot’ building with demonstratable end-of-life boilers e.g. Worcester Divisional HQ Police Station.
• Support with the technical requirements associated within The Public Sector Decarbonisation Scheme Phase 4 funding application.

A feasibility study and PSDS application has been prepared for Worcester Divisional HQ Police Station and is ready for submission before the 25^th November 2024 deadline. 

The aim of the feasibility study was to identify suitable solutions for decarbonising the heating system by removing gas fossil fuels (‘degassing’ the site). The study recommended replacing the current heating and hot water system and refurbishing the existing air handling systems with an electric-based air source heat pump at a total cost of £1,634,554.00, including project fees, contingency and inflation at 5% in year 2024/25, but excluding VAT.

The eligibility criteria for funding requires gas boiler systems to be 10 years old or older. During the feasibility study it was established that one of the two hot water boilers was replaced in January 2024. Consequently, the entire hot water system is ineligible for funding. However, the boilers serving the air handling system are over 10 years old and therefore meet the relevant funding criteria.

Replacing the air handling system and excluding the hot water system with an electric-based air source heat pump would incur a cost of £1,270,117. Proceeding with solely replacing the air handling system with a low carbon electric system would mean gas fuelled infrastructure remaining on site for the hot water system. To completely degas the site, the PCC would need to replace the hot water system with a low-carbon system without the support of funding at a cost of £364,437. In January 2024, the PCC commissioned a Mechanical & Electrical Condition Survey for Worcester Divisional HQ Police Station. The report provided a

prioritised schedule of recommendations and associated costs over a five-year period totalling £5,276,565.00 (including project fees, contingency and inflation at 5% in year 2024/25).  Of these costs £858,580 was identified as being required to fund the replacement of the gas heating and hot water system with a like-for-like gas fuelled system.

Due to a proposed heat network being installed in Worcester City by 2030, if the PCC were to replace this system with a gas fuelled like-for-like system, there is a risk that the system will need to be replaced in 2030 or result in site penalties expected to be in the region of approximately £250,000. It is recommended that all gas-fuelled heating and hot water systems are replaced simultaneously with the low carbon solution to reduce site disruption and mitigate future risk of replacing the system again in 2030 or face substantial penalties. 

West Mercia aims are to mitigate against future risks and reduce capital costs of low carbon heating systems. It is proposed to access ‘blended’ funding from the PSDS Phase 4. By harnessing the £858,580 budget within the 5-year planned programme, the like-for-like replacement of the gas-fuelled heating and hot water system. If successful in a bid for the PSDS funding of £775,974, the PCC will be able to decarbonise the entire heating system at the Worcester Divisional HQ Police Station at (in effect) no additional cost.

The table below details a breakdown of the capital costs of the heating and hot water system and potential funding available for each element:

If the PCC’s bid is successful in securing allocated funds (announcement expected in May 2025), the PCC can still decline the funding if a decision is made not to proceed with the works. If unsuccessful, there may be future funding opportunities, however this is currently not guaranteed. 

Authorisation to proceed with the works on the basis of this decision notice is contingent on securing the funds set out from PSDS (£775,974). Without this funding allocation West Mercia’s position will be reviewed and no permission is granted by the PCC.

STRATEGIC CONSIDERATIONS

This decision supports the following element(s) of the Safer West Mercia Plan:

☐ Putting Victims and Survivors First    ☐ Building a More Secure West Mercia   ☒ Reforming West Mercia                     ☒ Reassuring West Mercia’s Communities

The decision supports this/ these objective(s) through the following:

This proposal supports the Commissioner’s commitment to “reduce the environmental impact of policing on our environment and ensure that the wider economic, social and environmental wellbeing of our communities is considered when services are commissioned or procured.”

• Support and challenge PPC & Force to reduce its corporate carbon footprint.
• Reducing our impact on Climate Change and minimising the associated effects that extreme weather events have on frontline services, the estate portfolio and our communities. Reduces civil unrests in relation to the impacts of climate change and or associated events.
• Mange resources to maximise value, maximises efficiency, reduces costs to reinvest into frontline services.
• The PCC & Force would be able to demonstrate how they conduct themselves in line with the public’s ‘morals’, such as reducing its impact on climate change. Leading to greater community engagement and contribution to happier / healthier communities.
• Ensuring West Mercia Police contributes to reducing its impact on the environment.

BENEFITS AND THEIR REALISATION

• Access to public funding will support the PPC’s the professional key decarbonisation strategies and to deliver on our legal responsibilities and public sector targets.
• Provide a blueprint of the works required to decarbonise the PCC estate portfolio
• To decarbonise the estate and significantly reduce future energy costs and energy capacity infrastructural costs.
• To help minimise the PCC Estates & West Mercia Police environmental impact and minimise the impact of climate change and effects on frontline services and local communities

AUTHOR

Name: Andrew Heath – Head of Projects OPCC                       Date: 14.11.2024

FINANCIAL AND TREASURER COMMENTS

The total cost of the work to the PCC is estimated to be £1,634,554, but by securing Public Sector Decarbonisation Scheme ‘blended’ public funding of up to £775,974, the total net cost of the work to the PCC is estimated to be £858,580. The proposal is to request the funding as an addition to the capital budget for 2025/26 and 2026/27 to fund this project, as detailed in the table below:

The net cost to the PCC aligns with a traditional gas boiler replacement that has been identified as being required within the Condition Survey at Worcester Divisional HQ Police Station.

There currently is not sufficient revenue resources available to fund this investment. Whilst the replacement boilers are meant to be considerably more efficient than the current gas system, the fact that electric consumption costs are currently higher than gas prices, means that there is not expected to be a revenue saving in the medium term to offset the cost of borrowing. Therefore, the cost of MRP is likely to increase in the region of £45k per annum over a 20-year life expectancy.

Given the recommendation in the condition survey that the system needs replacing then the opportunity to move to a low carbon alternative which removes risk in relation to future replacement or fines being levied the proposal seems reasonable.

With Salix funding being uncertain and it likely that more bids will be made in the future as more Public Sector bodies realise that they are required to change their systems, it would seem appropriate to try and secure this funding now when we know it is available. If we are unsuccessful in our application, we can reconsider what our approach is.

Treasurer

Signature                                             Date  14/11/24

LEGAL CONSIDERATIONS

By virtue of schedule 11, paragraph 14 of the Police Reform and Social Responsibility Act 2011 the Police and Crime Commissioner may do anything which is calculated to facilitate, or is conducive or incidental to, the exercise of the functions of commissioner.  That includes entering into contracts and other agreements (whether legally binding or not) and acquiring and disposing of property (including land).

PUBLIC ACCESS TO INFORMATION

Information in this form is subject to the Freedom of Information Act 2000 (FOI Act) and other legislation.  Part 1 of this form will be made available on the West Mercia Commissioner’s website. Any facts and advice that should not be made automatically available on request are not included in Part 1 but instead in a separate Part 2 report.

OFFICER APPROVAL

Chief Executive Officer Date   14^th November 2024