Agenda item

Lighting for Staffordshire Update and Energy Framework Proposal

Minutes:

The Committee considered a report of the Cabinet Member for Highways and Transport outlining:- (i) the operational performance of the long-term Lighting for Staffordshire Private Finance Initiative  contract and; (ii) the proposed procurement of a contract for the supply of electricity for road lighting, for the period 1 April 2024 to 31 March 2028 (schedule 2 to the signed minutes).

 

Members heard that Lighting for Staffordshire (LfS) Limited had commenced delivery of the street lighting PFI contract on 19 May 2003 for the period of 25 years. The value of the contract was £250 million for which the County Council received a Revenue Support Grant of £1.54 million per annum.

 

Unlike many other PFI street lighting contracts, The Staffordshire contract included a continuous programme of asset renewal in order to safeguard against the need for a large-scale renewal over a relatively short time period. This approach also enabled the network  to benefit from continuous technological improvements might occur over the duration of the contract.

 

Since 2003, the quantity of street lighting assets on Staffordshire Highways had risen from 99,343 to 108,224 (as of September 2023) which represented a growth of 8.9%. During this time, performance against the Asset Renewal Programme set out in the contract was as follows:-

 

Block Period

Target Asset Renewal No.

Actual Asset Renewal No.

2003-2008

27,059

25,503

2008-2013

11,590

12,188

2013-2018

9,370

10,616

2018-2023

9,170

10,215

2023-2025

7,700

1,455

Total

64,889

55467

 

However, they heard that the agreed mechanism used to value each asset had resulted in some discrepancies arising between the Target Asset Renewal and Actual Asset Renewal figures in each of the five-year blocks shown above. Notwithstanding these discrepancies, the Cabinet Member was confident that the Programme and its approach to renewal ensured that assets with a longer than expected life cycle were not replaced earlier than was necessary and provided the most cost-effective solution.

 

With regard to general maintenance of street lighting assets:- (i) the number of reported faults and emergency faults had reduced by almost 50% when compared to 2003; (ii) the number of lights lit remained consistently high at over 99.3% against a performance target of 98% and (iii) a customer satisfaction rating of over 98% had been consistently achieved since completion of the first five-year Block in May 2008.

 

In addition, following the ‘Credit Crunch’ in 2008/09, the contract had been independently re-assessed for value for money and to ascertain if costs could be reduced. This had been undertaken by Ernst & Young who confirmed the Authority’s approach to negotiating improvements  with the contractor had been correct.  The total cumulative savings against each of the relevant headings applied from January 2013 to the end of September 2023 were as follows:-

 

Heading

Amount

Modernisation of Service Specification

£2,793,323.12

Insurance

£650,247

Asset Renewal High Efficiency Lanterns

3,321,672 kWh/annum

Asset Renewal Dimming

768,115 kWh/annum

Retro Fit Dimming

3,829,314 kWh/annum

  

Converting the above-mentioned energy savings to a monetary value indicated savings of approximately £2.2m were achieved over the ten-year period April 2013 to September 2023. Furthermore, total savings at the end of September 2023 arising from contract modernisation were approximately £5.6m.

 

With regard to procurement of a new contract for the supply of electricity for road lighting, the Cabinet Member explained that he proposed to use the Crown Commercial Services (CCS) energy framework and their Flexible Purchasing Model to gain best value for the Authority.  The annual value of electricity for the Council’s Street Lighting and Intelligent Transport Syetms was estimated to be £6.9m per annum.

 

NOTE BY CLERK: Since consideration of the report, the Cabinet Member has clarified that the annual value of electricity usage is estimated to be £7.3m and not £6.9m as originally stated.

 

In the full and wide-ranging discussion which ensued, Members gave detailed scrutiny to performance of the PFI Lighting contract and Cabinet Members’s proposals for procuring a new energy supply contract, asking questions, seeking clarification and raising areas of concern as necessary, including:- (i) the possibility of making additional savings by utilising existing columns for upgraded lanterns rather than replacing them with new, as a matter of course; (ii) the efficacy of either extinguishing or dimming lanterns during certain hours; (iii) technical issues regarding the brightness and direction of lanterns particularly within certain residential locations; (iv) the need to manage risks associated with the ending of the existing PFI contract, effectively and; (v) the anticipated date for completion of the Light Emitting Diode (LED) upgrade programme.

 

In conclusion, Members welcomed the significant savings which had been achieved to date in the PFI contract together with the excellent performance of the service since 2003. They went on to give their support to the Cabinet Member’s proposed approach to procuring a new contract for the supply of electricity and paid tribute to him and his operational team for their valuable work in providing an effective and efficient essential service to the people of Staffordshire.

 

RESOLVED – (a) That the report be received and noted.

 

(b) That the excellent performance of the current Private Finance Initiative contract arrangements for street lighting in Staffordshire be welcomed.

 

(c)  That the Cabinet Members’ proposed approach to procuring a new contract for the supply of electricity for street lighting and Intelligent Transport Systems in Staffordshire for the period 1 April 2024 to 31 March 2028 be supported.

 

(d) That the progress made in implementing new arrangements for street lighting in the County from 1 April 2028 be monitored closely and a further report be brought to the Committee for scrutiny at the appropriate time.

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