Renewable Energy (Peterborough)

Lord Jackson of Peterborough Excerpts

Tuesday 5th November 2013 Westminster Hall

[Mr Stewart Jackson (Peterborough) (Con)]

It is a pleasure to serve under your chairmanship for the first time, Mr Williams, and to have the opportunity to speak up on behalf of my constituents on such an important and topical issue of public policy.

I welcome the Minister. He is doing an excellent job, although my endorsement will not necessarily help his career. I have known him for more than 25 years, and I look forward to his considered response.

I am here to express serious concern about the July 2012 proposal of Peterborough city council and its energy company proxy, Blue Sky Peterborough, to build a solar and wind energy park on 900 acres of prime agricultural land to the east of the city, in the Newborough and the Eye and Thorney wards. I will not unduly focus on planning issues, not least because the first of the three detailed planning applications by the applicant for the Morris fen project is subject to an article 25 call-in process under the auspices of the Secretary of State for Communities and Local Government. I will, however, focus on the efficacy and financial viability of the project; the lack of proper consultation; governance issues, which reveal major flaws in scrutiny, oversight and democratic accountability; conflicts of interest; lack of openness and proper financial modelling; environmental concerns; and food security.

I will make it clear that I have sought to avoid conflict with the city council, which happens to be Conservative controlled, by facilitating an alternative, brownfield renewable energy strategy, but the city council’s lack of willingness to take it forward expeditiously or with any seriousness, while reiterating its absolute commitment to its original flawed, deeply damaging and unpopular plans, leaves me with no option but to bring the matter to the attention of Ministers and the House.

The Peterborough energy park will be the largest such scheme in Europe. In all, it will mean the construction of 500,000 glass panels on 900 acres of land—the size of 700 football pitches—some of it the most fertile in England. The land is owned by the city council and has been set aside for generations for cultivation of arable crops, such as sugar beet, potatoes and wheat, by tenant farmers, originally those returning as veterans from the second world war. The nine tenant farmers and their families, such as John and Denise Harris, who have been good and loyal tenants for 35 years, are to be turfed off the land, with the legal minimum compensation, to make way for a project that, like the great wall of China, will be visible from space.

The first tranche of three—at Morris fen, 49 MW of solar and wind—was submitted by the city council as applicant to the local planning authority, Peterborough city council, on 19 December 2012. It is now subject to the call-in process, as confirmed in a letter from the planning Minister on 14 June this year. It comprises 144,060 solar panels on metal frames, the erection of a substation compound and of 23 inverter buildings, and other related development on the land. Morris fen is one of only three applications; the others are at America farm, for 8 MW of solar, and Newborough farm, 27 MW of solar and wind.

Using 900 acres of such fertile soil means stopping food production equivalent to bread for 7,000 families or potatoes for 9,000 families each year. The National Farmers Union has consistently opposed the project as

“a large commercial scheme with no apparent benefit for local farmers”.

The November edition of British Farmer & Grower quoted the president of the NFU, Peter Kendall:

“Natural disasters, global food price spikes, and John Beddington’s Foresight Report have seen global summits focusing on food security with an intensity not seen since the Second World War. Food production and the value of the wholefood industry to the national economy has really started to land with policy makers across Government. This makes plans to cover 900 acres of grade 1 and 2 land outside Peterborough with solar panels crazy.”

The council claims that its proposals for wind and solar energy will generate a profit of about £31 million over the next 25 years, but they will require an investment by taxpayers—mainly—of £331 million via the Public Works Loan Board and from cash subsidies offered to producers of green energy. In one of a number of examples of sleight of hand, the council has deliberately disaggregated each of the planning applications so that they do not fall foul of legislative powers vested by Parliament in the Secretary of State for Energy and Climate Change to determine whether they can proceed. Nevertheless, to all intents and purposes they are one huge renewable energy project.

Peterborough city council is out of step with Government policy, in respect not only of the national planning policy framework, especially paragraph 112 and paragraph 28 on agriculture diversification, and of the recent statement issued by the Secretary of State for Communities and Local Government on local planning and renewable energy projects and recovery appeals, but of, specifically, the strong line taken by the Minster just last month.

It is apposite to recapitulate the Minister’s letter to hon. Members of 14 October. Commenting on the developing policy outlined in the Department’s solar roadmap document, he stated:

“I want the focus of growth to be firmly on domestic and commercial roof space and brownfield sites… Inappropriately sited solar PV especially in the countryside is something that I take extremely seriously and am determined to crack down on… Our new Solar Roadmap makes it very clear that new solar installations need to be sensitively placed and… proposals… give proper weight to environmental considerations such as landscape and visual impact, heritage and local amenity, and provide opportunities for local communities to influence decisions that affect them.”

In July, in a similar Westminster Hall debate to this one, but on solar arrays, introduced by my hon. Friend the Member for Totnes (Dr Wollaston), the Minister said:

“We simply must not—and will not—allow prime agricultural land to be taken out of active food production.”—[Official Report, 11 July 2013; Vol. 566, c. 163WH.]

Furthermore, I welcome the Minister’s strong commitment, in the letter that I mentioned, to eliminate subsidy for solar energy altogether by 2018. No wonder, therefore, that the main industry body, the British Photovoltaic Association, recently felt compelled to publish a “guidance document” encouraging development on brownfield land.

The sheer scale of the Peterborough project is of itself a major issue, but the lack of proper consultation, the paucity of proper financial data and conflicts of interest, as well as possibly dubious and ethically questionable conduct by senior officers of Peterborough city council, make it a wider issue of democracy and accountability and of openness and transparency.

The financial details of the project, other than a generic and speculative outline business case, have never been published; nor have they been audited, analysed or stress tested by any independent entity. Since summer 2012, the cabinet and full council have been asked to commit substantial amounts of public money on the basis of trust in the judgment of one officer, in effect, who, incidentally, has refused point blank to accede to requests by elected city councillors to release details of financial projections below the outline business case level—more of him later.

[Stephen Barclay (North East Cambridgeshire) (Con)]

My hon. Friend is making a powerful case. As his constituency neighbour, I endorse his case on the visual impact and the short-termism on food security. Does he agree, as a fellow member of the Public Accounts Committee, that there is real concern about our inability to see the proposed commercial case, which does not look like value for money for the taxpayer, thereby compounding the other issues that he is rightly highlighting?

[Mr Jackson]

My hon. Friend has a strong record on campaigning on inappropriate renewable energy projects in his constituency. He is absolutely right that this is a wider issue of democracy and governance in local government and of the ability of elected representatives, let alone the public, to see apposite and crucial financial data so as to make an informed choice.

Thus far, on a project that does not have planning permission, is likely to have its detailed planning applications called in for determination by the Bristol inspectorate and to face a judicial review, does not have a proper funding stream and is based on a renewables obligation programme regime, which may be amended substantially, the city council has spent more than £1.8 million of taxpayers’ money. Details of that expenditure and most other project information have been obtained only through the Freedom of Information Act.

Even senior council officers have described last year’s public consultation as inadequate. Expenditure on consultation has been less than £10,000, or 5.6% of total spend, and in particular the treatment of the farmers has been shoddy and high handed. In contrast, more than £440,000 has been spent on planning fees; £125,000 on financial modelling advice from Deloitte; £150,000 on legal fees, mainly to City lawyers Pinsent Masons; and an astonishing £951,000—almost twice the original budget—for technical consultants AECOM. Industry experts have stated privately that they have never seen such inflated expenditure for work on which there has been so little demonstrable progress.

A number of serious questions arise about conflict of interest. Not only is the city council both the applicant and the local planning authority, but councillors who sit and sat on the planning and environmental protection committee and determined the Morris fen application on 17 June 2013 voted to support the full energy park plans at a full council meeting on 5 December 2012. I suggest that that clearly shows evidence of pre-determination.

The city council leader, who has faced consistent criticism from a number of quarters as a result of his well-documented financial interests in green energy companies, has constantly raised the issue of the energy park plans being a simple matter of how the city council is to raise the money to fill the gap from diminishing central Government grants, but this is not, nor should it be, a planning matter. Nor should deadlines relating to the city council’s ability to benefit from feed-in tariff subsidies be material considerations.

Furthermore, not only has the council’s head of resources been appointed, at public expense and in city council time, as managing director of a new arm’s-length company, Blue Sky Peterborough Ltd—the new energy services company, or ESCO, which is allegedly dormant—but council tax payers have not been given details of the company’s board, its contractual arrangements and other core activities. Despite refusing to release financial costings on the basis that they are “commercially confidential”, he regularly challenges the media, city councillors and campaigners, most recently at the council’s rural scrutiny commission meeting on 16 September, to contest his figures.

Such secrecy and lack of transparency are deeply worrying, as is the fact that, until a few months ago, the head of resources, who holds a dual role as a section 151 officer under the Local Government Act 1972 and chief executive officer of Blue Sky Peterborough, was married to the city council’s monitoring officer, giving rise to an apparent and alleged conflict of interest. Requests to the city council’s chief executive for definitive determination of the matter have not been forthcoming.

The city council has seconded senior officers and specialists, such as ecologists, from the planning department to the energy park project to assist AECOM. At the beginning of the year, it was revealed to be pressurising planning officers to curtail statutory consultation by three weeks and to accelerate publication of the planning report, which, when it came to committee in June, predictably recommended approval, despite contravening evolving Government planning policy.

It is no surprise that the council was in such a hurry. By missing the 1 April deadline for the reduction from two renewables obligation certificates per megawatt to 1.6 ROCs and using only the indicative financial modelling published by the city council, which is £38 per ROC plus 3% inflation, it might have cumulatively forfeited about £33.3 million over the lifetime of the anticipated project, more than its basic profit level.

Surely the question is, how robust are the existing financial proposals? Of the 22 key input figures that the council proposed in the outline business case, which the cabinet discussed at least twice, nine are described as “indicative”, six as “contingent” and seven are not described at all. The business case is not Treasury Green Book compliant, and there has been no formal options appraisal and no sensitivity analysis. It is certainly far from the full business case to be expected of a project of this scale.

In addition, there is no contingency fund, and no funds have been set aside for community benefit investment, a compensation scheme or diminishing power generation over time due to age performance degradation over the project’s time scale—a phenomenon that the Renewable Energy Foundation identified with wind projects. If those factors are included in the financial model, the project will make a loss over 25 years.

The project has stalled, not merely as a result of the Secretary of State’s article 25 direction, but because the local planning authority was forced to undertake an archaeological survey of the site following strong, if belated, written representations by English Heritage just before determination of the Morris fen application in June. Just two weeks ago, the subsequent excavation yielded the discovery of Roman and Saxon artefacts, the value of which is yet to be fully determined and verified by independent sources such as Professor Francis Pryor of Cambridge university, who, in 1982, discovered the world famous Flag fen site near to the project’s location, which turned out to be one of the most notable bronze age settlements ever discovered in Europe.

I have never resiled from an open-minded commitment to alternative renewable energy sources and to developing appropriately sited sources, not least because on current projections Peterborough city council will have a gap between income and outgoings of as much as £18.6 million on a revenue budget of £399 million by 2017-18, due particularly to reductions in baseline funding. It is incumbent on the city council fully to justify its actions and to be accountable for them, but it is helpful to allow the authority to concede it has erred and to pursue other renewable energy projects for community benefit on brownfield sites. That is what local city and parish councillors, the local NFU, campaign organisations such Newborough landscape protection group, and I have sought to do since June.

[Stephen Barclay]

Does my hon. Friend agree that the Department’s guidelines must be clarified to take on board the points that he is articulating so well today, particularly the gaming of the planning system to qualify, often in haste, for feed-in tariffs, and the way that is incentivising developments in the wrong areas, as well as compromising food security by building on areas with archaeological and other community and farming benefits, as opposed to brownfield sites? Would he like the guidance to be strengthened to incentivise the right developments?

[Mr Jackson]

My hon. Friend makes a valid point. It is important that the Government’s evolving planning policy takes account of cumulative impact as well as the importance of agricultural diversification. He makes the significant point that this is work in progress and that we must ensure that the planning policy adopted by local authorities is appropriate, particularly to national policy.

We have sought to work with Empower Community, with which the Minister is familiar, to build consensus and community engagement and to transfer the experience of other local authorities, such as York city council and Swindon borough council, in developing an area-wide renewable energy programme focused on residential and non-residential roofs, public sector buildings, schools, warehouses and other industrial brownfield sites.

Five months on, we have yet to see real political leadership and commitment from the council to pursue that avenue in a convincing and sustainable way. It remains wedded to plan A, with all its flaws, guesswork, subterfuge, speculation, sleight of hand and, above all, risk to taxpayers and value for money. I am never one to take conspiracies as a given in politics and government, but too many people have remarked that the Peterborough model of renewable energy is to set up an arm’s- length company to broker a short to medium-term power purchase agreement, transfer agricultural land to commercial use and then, with a change in the subsidies regime, realise the capital asset by selling the land on for property speculation, making a few people, most of whom do not live in Peterborough, very wealthy.

It disappoints me that I have to take issue with my party colleagues in local government, but some of them have failed in their duty properly to scrutinise this disastrous gamble. My first priority is always my constituents in the rural wards east of the city of Peterborough, enmeshed in a deeply troubling process over which, in the past 18 months, they have often felt helpless, ignored and impotent. Today, I have sought to give them a voice and to pose important questions about democracy, accountability and integrity, and about the use of taxpayers’ money. After all, if we cannot challenge those in authority, ask difficult questions and hold the powerful to account, why bother serving in Parliament? My challenge to Peterborough city council is to reconsider its position, seek genuine consensus and collaboration on new and viable renewable energy plans, and scrap the project at the earliest opportunity. I hope that the Minister will encourage it in that necessary and timely endeavour.