Wednesday, 8 May 2013

Questions (137)

Michael Lowry


137. Deputy Michael Lowry asked the Minister for Communications, Energy and Natural Resources if his attention has been drawn to the ongoing issue with regards to the non-payment of a community based organisation (details supplied) which has been carrying out insulation works under the warmer homes scheme; if his attention has been drawn to the difficulties that this is causing for the organisation in question; if his attention has been drawn to the fact that jobs will be lost if this payment is not advanced as a matter of urgency; if his attention has been drawn to the fact that this action jeopardises the future of this scheme in the county and subsequently adversely impacts on older and vulnerable people; and if he will make a statement on the matter. [21606/13]

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Written answers (Question to Communications)

The Sustainable Energy Authority of Ireland (SEAI) administers the Better Energy Warmer Homes scheme on behalf of the Department. The scheme delivers a range of energy efficiency measures free of charge to those that are vulnerable to energy poverty and who live in privately-owned dwellings. The scheme is delivered through a combination of Community Based Organisations (CBOs), augmented by a panel of private contractors in order to ensure national coverage. Measures available include draught proofing, attic insulation, lagging jackets for hot water tanks, low energy light bulbs and cavity wall insulation.

In 2012 the Warmer Homes Scheme delivered over 12,000 energy efficiency measures to energy poor homes under the scheme, including 624 homes in County Tipperary. Last year, CBOs delivered upgrades to almost 7,000 homes in local communities around the country. I am informed by SEAI that under this scheme, the CBO concerned submitted a request for funding to the SEAI in January 2012. The CBO proposed that they would retrofit 204 homes at an average cost of €1,224.15 per home, giving a total funding envelop of €249,725.85. This was agreed and a contract was signed on that basis. When the final request for payment was made in November 2012, it became apparent that the CBO had in fact completed 183 homes (rather than the 204 homes agreed) at an average cost of €1,364 (rather than the agreed average cost of €1,224.15 per home). Furthermore, the CBO has informed the SEAI that they completed 34 homes where the cost of delivery was significantly above their agreed contract price. As a formal contract was in place, the SEAI was required to pay the CBO in accordance with the rates agreed and so they were paid for 183 homes at a rate of €1,224.15 per home, giving a total payment of €224,019.45. Any shortfall is therefore a matter for the CBO to resolve as they operated outside of the terms of their contract.

The SEAI did not give the CBO approval to divert from the standard contract conditions, which were issued to all CBOs in 2012. There was no agreement that a 10% variation was available to this, or to any other, CBO. Moreover, I am informed that the SEAI did not instruct the CBO to complete larger homes and incur higher costs beyond the parameters of the contract. In fact, in order to assist CBOs and to avoid penalising eligible homeowners with large homes, CBOs were expressly requested to pass larger homes to the SEAI for delivery under the private contractor model under the Scheme. I understand the CBO is now proposing to charge vulnerable home owners in order to recoup their overspend, even though the SEAI contract stipulates that these services must be delivered free of charge. SEAI has emphasised to me that under no circumstances should the CBO charge or propose to charge vulnerable home owners for these services to make up a contract shortfall which the company incurred.

The SEAI is required to ensure that all CBOs operate within their contract conditions to ensure good governance and consistency of service delivery nationwide. The SEAI gave clear guidance on the contracts for 2012 and CBOs were advised on numerous occasions that they were required to work within the budget price agreed in their contract and to contact the SEAI at the earliest opportunity if they were having difficulty meeting these requirements. CBOs are responsible for managing their own budgets within the requirements of the contract, which is supported by the SEAI who have put in place a resource to assist CBOs with budget management. Within the confines of the rules of the scheme, the SEAI would very much welcome the continued participation of the CBO in question. I would also like to reassure Deputy that coverage of vulnerable homes in the county will continue to be provided through private contractors should the services of the CBO be withdrawn pending resolution of this issue.