The Sutton Shareholdings Board met on 10 March 2026 to discuss and approve the business plans and budgets for Sutton Decentralised Energy Network (SDEN) and Sutton Living Limited (SLL), and to note the progress and financial position of Cognus Limited. Key decisions included approving a 3.4% price increase for SDEN's unit and standing charges, approving SDEN's 2026-2029 business plan and budget, and approving SLL's 2026-2036 business plan and 2026/27 budget.

Sutton Decentralised Energy Network (SDEN) Business Plan and Budget

The Board approved the updated three-year SDEN Business Plan and Budget for 2026-2029 and noted the company's risk register. David McIntyre, Managing Director of SDEN, presented the plan, highlighting progress in Phase 1, including the replacement of a faulty gas sensor that caused a brief overnight supply disruption in November 2025. An issue with undercharging customers between April and December 2025 was also detailed, with an average shortfall of £25-£35 per customer. SDEN has implemented a more robust procedure with additional verification checks to prevent future occurrences and has self-reported the issue to Ofgem, complying with back-billing regulations.

A 3.4% price increase on both unit and standing charges was agreed, effective from 1 April 2026 to 31 March 2027. The Board believes this increase is reasonable given the general cost of living and the commitment to maintaining stable tariffs for the entire 12-month period.

Progress on the transfer of the main heat network connection to the Energy Recovery Facility (ERF) was reported as well. Option B, which involves purchasing new, larger equipment capable of taking the full 50 megawatts of waste heat supply from the ERF, was chosen. A revised capital grant application to the Green Heat Network Fund for an uplift of £498,000 was successful, confirming the funding for this expansion.

Councillor Jake Short raised concerns about the cause of the faulty gas sensor, and David McIntyre explained that the sensor had reached the end of its five-year life expectancy and would be replaced sooner in the future, with an increased maintenance regime. Councillor Marian James questioned the undercharging issue, which was attributed to a combination of human and system error, with a greater emphasis on human error due to insufficient checks. The average shortfall was clarified as £25-£35 per customer, with repayment spread over four to six bills, and flexibility offered to customers experiencing financial difficulties. Councillor Crowley inquired about the discovery of the error, which was identified through an internal audit, and the implementation of new verification checks, including a red flag system. The largest undercharged sum per individual was £70.

Regarding the primary heat connection to the ERF, Councillor Crowe noted a potential typo in the decoupling date, which was confirmed to be 2026. Councillor Dwyer questioned the transparency of fixed standing charge tariffs and their comparability to usual domestic supplies, with assurances given that charges are clear on notifications and the website, and are judged against Ofgem's fair pricing framework. Councillor Crowe also raised concerns about the ongoing progress of the Lavenders connection, which was clarified as Phase 2, with assurances that costs are covered by an indexation cushion. The deferred tax liability was explained as a mandatory non-cash accounting adjustment that does not impact operational liquidity.

The Board approved the SDEN Business Plan and Budget for 2026-2029 and noted the SDEN Risk Register.

Cognus Business Plan and Budget

Joanne Cassie, Managing Director of Cognus Limited, presented the company's performance against its business plan and its financial position. Cognus has delivered strong progress in education and support services, with a workforce of around 300 staff. Key achievements include a 40% increase in staff retention and a 53% reduction in the use of agency staff, saving over £180,000.

The Virtual School reported strong results for children looked after, with 91% securing positive post-16 destinations and 82% of care leavers aged 18 progressing to education, training, or employment. The Building Stronger Foundations programme is now embedded in 44 schools. School admissions outperformed London averages, with every child receiving an offer on national offer day for the second consecutive year. Education Safeguarding Services maintained 100% school satisfaction, and Attendance Services contributed to a reduction in exclusion rates to below the national average. SEND services demonstrated strong performance, with 76.5% of EHCPs issued within the statutory 20-week requirement.

Financially, Cognus is forecasting an operating surplus of £429,000 for the year ending 31 March 2026, an £840,000 turnaround from the previous year's deficit. This has been achieved despite significant financial pressures in SEND and therapies services, with the Council approving additional in-year funding of £710,000. Strong traded income is projected to meet its target of £1.8 million. Reserves are set to increase to £985,000, improving financial stability.

Councillor Gordon questioned the number of in-year applications and the potential impact of VAT on private schools, with assurances that this is business as usual and Sutton is a net importer of students. Councillor James praised the financial turnaround and the focus on children looked after. Councillor Dwyer expressed concern about the high refusal rate for needs assessments and whether savings were at the expense of timely support for children with SEND. Joanne Cassie clarified that the term refusal is unhelpful and that the number of requests to assess has dropped due to early intervention and a multi-agency panel. The SEND register was clarified, with over 2,100 children currently within the SEND service. Councillor Dwyer also raised observations about elective home education and the context for children with PDA.

The Board noted the progress made by Cognus against its business plan and the update on its financial position.

Sutton Living Limited (SLL) 2026/27 Budget & Ten Year Business Plan

The Board approved Sutton Living Limited's (SLL) updated 10-year Business Plan (2026-2036) and its 2026/27 budget, and noted the company's risk register. The plan reflects a strategic shift from development to acquisitions, aiming to provide quality and affordable housing and reduce homelessness.

SLL has significantly expanded its landlord portfolio, now managing 61 properties, with plans to exceed 100 by the end of 2026/27 and grow to over 300 by the end of the business plan period. These properties are primarily let to households nominated by the Council, generating recurring savings for the Council's homelessness budgets.

The Grove development in Carshalton is expected to complete in spring 2026, providing 10 market-sale apartments. However, unforeseen structural issues and design information requests have led to delays and an anticipated deficit of £0.85m for the scheme.

SLL is progressing with the creation of a Registered Provider (RP) to access additional grant funding, particularly from the Greater London Authority (GLA), which is crucial for future acquisitions and development. The process is expected to take 12-15 months.

Financially, SLL is forecasting a loss of £0.87m for 2025/26, primarily due to the Grove scheme and associated revenue into the next financial year. The 2026/27 budget forecasts an increase in turnover to £6.8m, driven by expected sales from The Grove and growth in rental income from the expanding landlord portfolio. A deficit after interest but before tax of £0.55m is expected for 2026/27, with £0.52m attributed to the Grove scheme.

The 10-year financial plan shows improving performance, with SLL expected to generate cash surpluses from 2027/28 and achieve profitability from 2028/29. The plan is sensitive to interest rates, LHA increases, operating costs, and the ability to secure further acquisitions. Stress tests have been conducted to assess the impact of various adverse scenarios, including higher borrowing costs and lower LHA increases.

Councillor Short raised questions about the confidence in acquiring the forecasted number of properties within grant timeframes, with assurances that resources are being diverted to this, and that further funding is being sought. Concerns were also raised about learnings from the Grove development for future projects, with emphasis on careful site selection and contract forms. Councillor Corley questioned if SLL's articles of association had changed to reflect its evolving purpose, and was informed that the current articles allow for both development and acquisition. Councillor Dwyer queried the cost per home in the LAHF 4 funding, which was clarified as an average that will be topped up by a loan facility. Councillor James asked about communication with prospective buyers regarding delays at The Grove and potential price increases, with confirmation that decisions are pending and will be communicated. The timeline for RP registration was also discussed. Councillor Dwyer raised concerns about the state of The Grove building prior to the project and the projected deficit, with assurances that sales are achievable based on current reservations.

The Board approved the SLL Business Plan for 2026-2036 and the 2026/27 budget, and noted the SLL Risk Register.

The meeting also included acknowledgements and thanks to Councillor Marion James and Councillor Tim Crowley, who were retiring from the Board.