Councillor Peter Butlin, Deputy Leader of the Council and Portfolio Holder for Finance and Property, approved the extension of the West Midlands Business Energy Advice Service (BEAS) in Warwickshire. This includes authorising the Executive Director for Communities to negotiate a grant agreement with the West Midlands Combined Authority (WMCA) for further funding from the Department for Energy Security & Net Zero (DESNZ). The decision also approves adding up to £1.25 million to the Capital Programme to continue the BEAS grant scheme.

West Midlands Business Energy Advice Service Extension

Councillor Peter Butlin approved the extension of the Business Energy Advice Service (BEAS) in Warwickshire. This decision allows the Executive Director for Communities to:

• Negotiate a grant agreement with the WMCA for another 12 months of funding from DESNZ.
• Add up to £1.25 million, funded by a grant from DESNZ via WMCA, to the Capital Programme to continue the BEAS grant scheme.
• Extend the BEAS grant scheme in Warwickshire, with grant conditions approved by the Executive Director for Resources.
• Enter into grant agreements with selected businesses, with terms and conditions acceptable to the Executive Director for Resources.

The BEAS has been active in Warwickshire since October 2023. It was initiated after an external review of business support in Warwickshire, intended to inform the delivery of the UK Shared Prosperity Fund (UKSPF). The council was then approached by WMCA to lead a DESNZ-funded West Midlands-wide pilot in Warwickshire, aligning DESNZ and UKSPF funding.

The DESNZ grant enabled the council to conduct an additional 100 energy audits and establish a capital grant scheme to support businesses with energy efficiency measures and adopting low-carbon technologies. Coventry City Council was appointed, following a procurement exercise via the council’s Dynamic Purchasing System for Business Support Services¹, to deliver webinars, awareness activities, and business audits.

The BEAS has supported 185 businesses in Warwickshire in developing decarbonisation plans following a free energy audit. 35 of these businesses secured grants worth £0.75 million to implement the audit recommendations. These grants have leveraged £1.1 million of private sector investment and are expected to save 293 tonnes of carbon dioxide equivalents (CO2e) per year, and approximately £0.22 million annually on energy bills. Overall, the BEAS is expected to save 1,966 tonnes of CO2e per year, assuming that approximately 50% of supported businesses implement at least the low-cost measures recommended in their audits.

The 18-month DESNZ-funded pilot was scheduled to conclude at the end of March 2025. However, DESNZ has agreed to extend the BEAS pilot for another 12 months, until March 2026. The extension will continue to be led by WMCA, in partnership with organisations including Aston University, Birmingham City Council, Coventry City Council, the Black Country Industrial Cluster Council, Pro Enviro, Staffordshire County Council, Worcestershire County Council and Warwickshire Council.

The council anticipates a grant offer from WMCA of approximately £0.27 million in revenue funding and £1.25 million in capital funding to continue the BEAS in Warwickshire. The DESNZ revenue grant will enable Coventry City Council to provide energy audits to an additional 125 businesses in Warwickshire during 2025/26. The capital grant will extend the BEAS grant scheme for another 12 months, supporting an estimated 57 businesses in implementing audit recommendations.

DESNZ has revised some eligibility requirements, most notably requiring businesses to use at least 25,000 kWh of energy annually, which will exclude some smaller businesses previously eligible for support. However, eligible activities have been expanded to include the installation of solar panels in certain circumstances.

Alternatives to the council continuing to deliver the BEAS pilot in Warwickshire were considered but rejected. The available UKSPF funding is insufficient to operate an energy advice service without additional DESNZ funding, particularly as Warwickshire’s 2025/26 allocation of UKSPF funding is not sufficient to fund an energy grant scheme. It is also unclear whether another organisation would assume responsibility for delivering the DESNZ funding in Warwickshire, and failure for the council to do so could mean that Warwickshire businesses are unable to benefit from the additional 12 months of DESNZ funding.

The council expects a grant offer from WMCA for the DESNZ funding by the end of April, with confirmation of the UKSPF funding expected around the same time. Coventry City Council has agreed to continue delivering a basic service at risk during April. The grant scheme is expected to open to new applications in May, subject to this decision, once a grant agreement is in place between WMCA and DESNZ and all eligibility requirements have been confirmed.

The council is expecting to receive approximately £0.27 million of revenue funding for marketing, the delivery of 125 energy audits, and project management and administration, as well as £1.25 million of capital funding to extend the grant scheme. The budget for management and administration is considered sufficient to cover the council’s additional costs, including all legal costs.

The council will be asked to enter into a new grant agreement with WMCA based on the 2025/26 grant conditions between DESNZ and WMCA. The council will pass relevant grant conditions onto Coventry City Council via a contract variation under the Dynamic Purchasing System (DPS) for Business Support Services, or will pass relevant grant conditions onto businesses awarded grants.

Key financial risks include ensuring that the grant scheme meets the local government definition of capital spend, that the capital and revenue grants are used in accordance with the grant criteria, liabilities for the council in respect of any ineligible spend, and ensuring compliance with Subsidy Control rules². These risks will be managed by passing on relevant grant conditions to Coventry City Council or businesses awarded grants and through regular project monitoring. All grants will be paid in arrears based on actual, incurred costs.

The extension to the BEAS pilot in Warwickshire will continue to support the delivery of key priorities in the new Economic Growth Strategy for Warwickshire and the Sustainable Futures Strategy. It will also support the delivery of Key Deliverables in the Council Delivery Plan.