Peterborough council paid consultancy more than £18k for work which contained 'error'

A Cambridge consultancy was paid more than £18,000 by Peterborough City Council (PCC) for work which contained an “error”.

Edenseven received £18,830 to value PCC’s rooftop solar panel portfolio, a Freedom of Information (FOI) request reveals.

But their financial model took a “significant amount of work and significant amount of specialist involvement” to understand, PCC’s auditors Ernst & Young (EY) said, with council officers struggling to understand some of the assumptions the company had made.

For instance, it assumed inflation would rise by five per cent each year rather than actual figures from Ofgem, which E&Y said it considered to be an “error” in an audit report.

PCC’s solar panel venture began in 2014 when it entered into a £20m loan agreement with Empower Community Management LLP.

Initially, Empower was responsible for valuing the solar panels it installed in Peterborough and surrounding areas, but this responsibility returned to the council after the company was taken into administration in 2021 – after which it contracted Edenseven in 2022.

Initially, it didn’t receive any suitable bids from companies to value the solar panels, PCC said, so it “approached two smaller companies to quote for the work and Edenseven were successful”.

Model ‘designed to be regularly updated’

A spokesperson for the company denied there were “inaccuracies” in its model.

“We would like to clarify that the original model produced by edenseven was based on valuations in 2021/22 and rather than being inaccurate, was designed to be regularly updated to reflect anticipated changes to individual elements,” they said in a joint statement with PCC.

“The council were happy with the work completed by edenseven and look forward to continuing to work together.”

E&Y said Edenseven’s inflation didn’t result in a material difference in its final evaluation.

But it also said the company assumed the council would need to replace the solar panels’ inverters – which convert electric currents – in seven per cent of its stock, while the original Empower model assumed all would need to be replaced as they have a life expectancy of 15 years.

“Our estimate for a full replacement programme of inverters could reduce the valuation of the assets in the model by up to £3.4 million,” it said.

PCC said it “gained its own understanding of the modelling, including the cost of replacement parts” in order to answer E&Y’s questions.

Auditors have since said the council provided it with more information about the inverters in December 2023 and January 2024, after which it calculated a value of £17.55m for the solar panel portfolio. This is the same as the value calculated in previous accounts.

PCC bought the 7,700 solar installations Empower had completed by the time it went into administration in 2021.

The council and its partners – Peterborough Limited, BayWa and Next Gen Eco Solutions, Low Carbon Exchange and Professional Energy Solutions – continue to maintain these solar panels but no longer undertake new installations.

PCC has not paid any money to Edenseven since 2022.