Decision details

To sign the Memorandum of Understanding between Cheltenham Borough Council and Department of Energy Security and Net Zero accepting £100,000 of funds from the Heat Network Delivery Unit round 15 bid. The total contract value is £130,000, comprising £100,000 HNDU grant funding and £30,000 existing approved funding from Climate Leadership Gloucestershire, Gloucestershire County Council and Cheltenham Borough Council. To direct award and enter a contract with the Carbon Trust to deliver detail project development for the Town Centre Heat Network.

It is a requirement to sign the Memorandum of Understanding to accept the funds from central government. To enable the Council to deliver on the detailed project development phase of the Town Centre Heat Network project it is necessary to enter into a contract with a third party to provide technical expertise consultancy services. Given delivery milestones set by central government, undertaking a competitive tender would likely prevent meeting required deadlines, presenting a material risk of grant withdrawal. The Crown Commercial Service Demand Management & Renewables framework permits direct award whereby justified by time constraints and specification fit. A direct award is therefore proposed due to the March 2026 draft output deadline and the Carbon Trust’s demonstrable experience delivering heat network detailed project development. Failure to progress risks loss of external funding, reputational impact, and delay to the council’s preparedness for future statutory heat network zoning regulation.

This decision notice provides the relevant authority to direct award the total £130,000 to the Carbon Trust utilising the Crown Commercial Service Demand Management & Renewables Framework.

Background information:
Heat networks will play a crucial role in decarbonising heat in buildings. Heat networks take heating, cooling or hot water from a central source(s) and deliver it to a variety of premises such as public buildings, shops, offices, hospitals, universities, and homes. The Department for Energy Security and Net Zero have used research to establish a target of around 20% of total heat supply from heat networks by 2050. They currently provide about 3%. DESNZ is further enabling the development of HN infrastructure through a range of targeted funding, policy and legislative support to de-risk projects and attract investment.

Heat network development supports the council’s carbon-neutral ambitions and contributes to national heat decarbonisation pathways under the Energy Act 2023.

The Council considered not accepting the funds due to constraints surrounding project delivery and internal resource however this was rejected due to the highly competitive nature of the funds, strong political and regional support, and to ensure continued project momentum. Since the receipt of a successful bid, a Climate and Decarbonisation Manager has been appointed to assist with provided strategic oversight of this project. The Council also explored different procurement frameworks however draft outputs need to be submitted to central government at the end of March 2026, therefore direct award is necessary for project continuity and delivery.

Decision making has occurred in consultation with:
- Director of Construction, Properties and Assets
- Head of Property Management and Decarbonisation
- Cabinet Member for Climate Emergency
- Climate Change County Coordinator
- Southwest Net Zero Hub
- One Legal
- Procurement
A project delivery board is being established to ensure this level of consultation continues throughout this phase of works.