DECC LOCAL AUTHORITY COMPETITION 2012/13 Memorandum of Understanding 11 January 2013 DECC reference: F12 Page 1 of 17 DECC Local Authority (LA) Fund

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1 Page 1 of 17 DECC Local Authority (LA) Fund (Revenue & Capital) GRANT DETERMINATION (2012/13): No 31/2102 The Secretary of State for the Department of Energy and Climate Change ( the Secretary of State ), in exercise of the powers conferred by section 31 of the Local Government Act 2003, makes the following determination: Citation 1) This determination may be cited as the DECC Local Authority Fund (Fuel Poverty) Grant Determination (2012/13) No. 31/210. Purpose of the grant 2) The purpose of the grant is to provide support to local authorities in England towards expenditure lawfully incurred or to be incurred by them. Determination 3) The Secretary of State determines as the authorities to which grant is to be paid and the amount of grant to be paid, the authorities and the amounts set out in Annex A. Grant conditions 4) Pursuant to section 31(4) of the Local Government Act 2003, the Secretary of State determines that the grant will be paid subject to the conditions in Annex B. Treasury consent 5) Before making this determination in relation to local authorities in England, the Secretary of State obtained the consent of the Treasury. Signed by authority of the Secretary of State for DECC Gareth Baynham-Hughes Deputy Director Fuel Poverty 11 January 2013 Page 2 of 17 ANNEX A Authorities to which grant is to be paid Revenue Capital Total Amount of grant to be paid Watford Borough Council 49, , ,100 Page 3 of 17 ANNEX B GRANT CONDITIONS 1. Capital grant paid to a local authority under this determination may be used only for the purposes that a capital receipt may be used for in accordance with regulations made under section 11 of the Local Government Act 2003.

2 2. The Chief Executive and Chief Internal Auditor of each of the recipient authorities are required to sign and return to the team leader (Gareth Baynham-Hughes) of the Fuel Poverty team of the Department of Energy and Climate Change a declaration, to be received no later than 15 April 2013, in the following terms: To the best of our knowledge and belief, and having carried out appropriate investigations and checks, in our opinion, in all significant respects, the conditions attached to Local Authority Fund Grant Determination (2012/13) No 31/2102 have been complied with. 3. If an authority fails to comply with any of the conditions and requirements of paragraphs 1 and 2, the Secretary of State maya) reduce, suspend or withhold grant; or b) by notification in writing to the authority, require the repayment of the whole or any part of the grant. 4. Any sum notified by the Secretary of State under paragraph 3(b) shall immediately become repayable to the Secretary of State. Page 4 of 17 MEMORANDUM OF UNDERSTANDING FUNDING FOR PARTIES 1. The parties to this Memorandum of Understanding which includes its Annexes ( the MoU ) are: the Secretary of State for Energy and Climate Change (the Secretary of State ); and 2. Watford Borough Council ( Authority ) BACKGROUND 3. The Secretary of State has agreed to grant funding to the Authority and the Authority has agreed to spend such funds in connection with the Proposal made by the Authority under the DECC Local Authority Funds Competition the current version of which is detailed at Annex 4 ( the Proposal ). 4. The parties wish to record their agreement. This MoU therefore sets out, amongst other things, the monies available to the Authority under the grant, how funds granted may be spent (including commitments by the Authority to deliver against the Proposal and take responsibility for the actions of its employees, contractors, agents and delivery partners), payment of the grant and commitments in relation to the administration of the grant. PROVISION OF GRANT 5. The parties agree that the Secretary of State will grant funds to the Authority. 6. The maximum amount of the grant is: Capital Programme Total Fuel Poverty 277,350 49, ,100 Pioneer Places n/a n/a

3 n/a Cheaper Energy Together n/a n/a n/a 7. Further details of funding for Fuel Poverty and Pioneer Places are set out in the Grant Determination and its Annexes PURPOSE AND PAYMENT OF GRANT 8. The parties have agreed that the Authority will spend the funds grant on the costs referred to in paragraph 6 ( eligible costs ) and in accordance with the MoU. 1 For further details of the Local Authority Funds Competition see: for information, and for the competition pack. Page 5 of 17 ELIGIBLE COSTS 9. Subject to paragraph 11 and 12, the eligible costs are those costs properly incurred in connection with the Proposal. 10. The parties have agreed that the eligible costs are limited, in all cases, to costs which are incurred in completing works before 31 March 2013 (inclusive). PROHIBITED USE OF GRANT 11. Without prejudice to any other provisions of this MOU, the parties have agreed that the grant will not be used for the following purposes: a) Use in connection with research projects; b) Use for activities of a political or exclusively religious nature; c) Use in respect of costs reimbursed or to be reimbursed by funding from public authorities or from the private sector; d) Use in connection with the receipt of contributions in kind (a contribution in goods or services as opposed to money); e) Use to cover interest payments (including service charge payments for finance leases); f) Use for entertaining (entertaining for this purpose means anything that would be a taxable benefit to the person being entertained, according to current UK tax regulations); g) Use to pay statutory fines, criminal fines or penalties; h) Use to pay for eligible costs incurred before the date the MoU is signed, or before any earlier date specified for the use of the grant in this MoU; or i) Use in respect of Value Added Tax that you re able to reclaim from HM Revenue and Customs. AVAILABILITY OF GRANT 12. Funding for this grant is only available during the financial year ending on 31 March The parties have agreed that the grant will not be used to cover costs incurred after that date and Authorities will use their best endeavour to fulfil all relevant commitments recorded in this MoU on or by the deadlines specified. PAYMENT OF GRANT

4 13. The parties have agreed that the Authority will, as soon as possible after signing this MoU, provide the Secretary of State with the information specified in Part 1 of Annex The parties have agreed that grant will be paid to the Authority for expenditure incurred each calendar month on submission of a grant claim, in respect of the previous month s activity. Grant claims should be accompanied by information demonstrating progress in Page 6 of 17 delivering the Proposal made in accordance with Part 3 of Annex 1, as set out in the proforma to be provided by DECC. 15. Where the Secretary of State provides capital funding, accounting standards permit, in certain circumstances, the capitalisation of costs incurred when creating or purchasing an asset (for example, professional fees). By signing this MoU the Authority agrees to keep such costs below 10% of the total value of the capital grant provided by DECC. In all other cases capital funding should not be spent on revenue. 16. The Secretary of State will endeavour to pay the Authority within 10 days of receipt of a grant claim and supporting information. STATE AID 17. It is important to ensure that the grant is not, and does not become, an unlawful state aid under Article 107 of the Treaty on the Functioning of the European Union (C83/47, 30 March 2010). State aid rules ensure that the governments of EU Member States do not distort competition by unfairly subsidising their own industry or particular parts of it. 18. To minimise the risk that the European Commission or a court requires grant funding to be received from the Authority, it is particularly important that the Authority complies with EU law relating to state aid in providing assistance to any undertakings within the meaning of that law. The Authority will therefore need to ensure that its Proposal complies with EU state aid rules and the parties have agreed that by signing this MOU the Authority confirms that grant claims made in respect of the Proposal will not infringe those rules. REDUCTION, WITHDRAWAL AND REPAYMENT 19. In accordance with paragraphs 20 to 27, it is the understanding of the parties that the Secretary of State may: a) withdraw or reduce the grant, where the grant, or any part of it, has not been paid; and/or b) ask the Authority to repay all, or any proportion of, the grant, together with interest (calculated in accordance with paragraph 25 and, in the case of late payment, paragraph 26), where the grant, or any part of it, has been paid (including in cases where the Authority has already spent the grant money). 20. The parties have agreed that the Secretary of State will exercise the options referred to in paragraph 19 where the Secretary of State: a) is required to cease grant funding or to recover all, or any proportion, of the grant by virtue of a decision of a court or of the European Commission; or b) has reasonable grounds to consider that the payment of the grant, or the Authority s use of it, contravenes any requirement of law, in particular (but without limitation) EU law relating to state aid.

5 21. When exercising the options referred to in paragraph 19, the Secretary of State will notify the Authority of the grounds concerned and (except in a case falling within paragraph 20a), as far as possible, consider the Authority s representations made within any reasonable timeframe required by the Secretary of State. Page 7 of The Authority will comply at all times with the requirements of Annex The Authority will inform the Secretary of State in writing if it has any concerns that any of the grounds in paragraph 20 might arise or that it will not be able to comply with the requirements of Annex 1 in respect of the Proposal. If such concerns arise after the Authority has received a grant payment, the Authority will not make any use of the grant until the Secretary of State has authorised continued use of the grant in writing. 24. A decision by the Secretary of State to ask the Authority to repay the grant will be communicated by letter, and the Authority will make that repayment within 30 days of the date of that letter or within any later reasonable timeframe agreed by the Secretary of State in writing. 25. Where the Secretary of State requests repayment, interest will be calculated from the date of the grant payment, in accordance with: a) the retail prices index over the relevant period (that index being taken as 0% for any period during which the index is negative); or b) any other rate required by law in the circumstances (including any rate required under EU law relating to state aid), if it is higher. 26. Where the Authority does not make the relevant repayment within the timeframe specified in paragraph 24, further interest on the outstanding sum (inclusive of interest already charged under paragraph 25) will accrue, after that deadline, at the statutory rate of interest under section 6 of the Late Payment of Commercial Debts (Interest) Act 1998 or any other rate required by law in the circumstances, if it is higher. 27. Should the Secretary of State not exercise his options under paragraph 19 or delay in doing so, this shall not constitute a waiver of those rights unless the Secretary of State confirms such a waiver in writing. Furthermore, any such written waiver shall not be taken as a precedent for any other, or subsequent, circumstances. SUSPENSION 28. The parties have agreed that the Secretary of State may suspend payment of the grant where: a) one of the grounds in paragraph 20 arises or one of the requirements of Annex 2 are not complied with by the Authority, pending consideration of the circumstances and the making of a decision; or b) the Secretary of State has reasonable cause for concern that one of those grounds may have arisen, or is likely to arise. 29. In the case of any suspension, unless the Secretary of State confirms a contrary agreement in writing: a) the Authority will continue to comply with the requirements of this MoU including any deadlines occurring during the period of suspension; but b) the Authority will not make any further use of the grant until the Secretary of State has authorised continued use of the grant in writing.

6 Page 8 of 17 INFORMATION SHARING 30. The Secretary of State may share information relevant to the grant with other public authorities and their agents and the European Commission. 31. In order for the Secretary of State to assess whether the activities set out in the Proposal and supported by this funding are producing desirable results, the Department will seek to obtain information from the Authority throughout the project s duration. FREEDOM OF INFORMATION 32. The Parties may be obliged to disclose information relating to the grant and this MoU under the Freedom of Information Act 2000, the Environmental Information Regulations 2004 or under any other requirement of law. 33. The Parties will assist, and cooperate with each other as reasonably requested, to facilitate compliance with those requirements. NOTICES AND COMMUNICATIONS 34. The Authority s day-to-day contacts within the Department of Energy and Climate Change are: Fund Contacts Fuel Poverty Fund Emily Casey ( ; emily.casey@decc.gsi.gov.uk) Rita Wadey ( ; rita.wadey@decc.gsi.gov.uk) Green Deal Pioneer Places Fund Steve Ives ( ; steve.ives@decc.gsi.gov.uk) Dora Slater ( ; dora.slater@decc.gsi.gov.uk) Cheaper Energy Together Fund Kate Barbier ( ; kate.barbier@decc.gsi.gov.uk) Ngaio Wallis ( ; ngaio.wallis@decc.gsi.gov.uk ) 35. Funding recipients will be able to contact the Department on any working day between 9am and 5pm in writing, either via or via post /hand delivery of written documents to the following address: Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW Page 9 of 17 VARIATION 36. No variation of the provisions set out or referred to in this MoU will be effective unless it is agreed in writing and signed by both parties. This does not prevent the Secretary of State making reasonable changes in relation to the administrative arrangements in MoU (such as departmental contact details). STATUS 37. This MoU is not intended to be legally binding, and no legal obligations or legal rights shall arise between the parties from this MoU. The parties do, however, enter into the MoU intending to honour all their commitments under it. 38. Nothing in this MoU is intended to, or shall be deemed to, establish any partnership, joint venture or relationship of employment between the parties, constitute either party as the agent of the other party, nor authorise either of the parties

7 to make or enter into any commitments for or on behalf of the other party. Accordingly, the Authority will not hold itself out as having any such relationship with the Secretary of State. FURTHER FUNDING 39. The Secretary of State is under no obligation to provide the Authority with any further funding in respect of the project or for any other purpose. LAW AND JURISDICTION 40. This MoU shall be governed by and construed in accordance with English law, and each party agrees to submit to the exclusive jurisdiction of the courts of England and Wales. REFERENCES 41. In this MoU and its Annexes references to legislation, including EU legislation and any documents issued by the EU institutions, are to that legislation as amended or re-enacted from time to time (including any amendment or re-enactment having taken place before the date of this MoU) Page 10 of 17 Signed for and on behalf of the Secretary of State Signature: Name: Gareth Baynham-Hughes Position: Deputy Director, Fuel Poverty Date: 11 January 2013 Signed for and on behalf of Watford Borough Council Signature: Name:...Justine Hoy... Position:... Environmental Health & Licensing Section Head... Date:...19 th January Page 11 of 17 ANNEX 1 Part 1 Grant payments General information 1. Authorities are requested to provide: The name and contact details of officers/employees authorised by the Authority to deal with the Secretary of

8 State on matters connected to the grant. A forecast profile of the grant payments that the Authority expects to claim for in respect of the Project. Details of a bank account into which the grant may be paid. Grant Claim profile*: Claim 1: 28 th February , Claim 2: 15 th March , Claim 3: 31 st March , Claim 4: 28 th March , Claim 5: 12 th April , Total 327,000 * Watford Borough Council will endeavour to update this suggested grant claim profile as the project progresses and we have more information. This suggested profile is an approximation. Part 2 Grant claims Grant claims and instalments 2. In order to help the Secretary of State process payments efficiently, grant claims for costs incurred in the previous month should reach the Department by the 15th of each month, along with information demonstrating progress in delivering the Proposal. If the Authority is unable to make a claim at this time please discuss with your day to day contact. The Secretary of State would expect the final claim to be made by 15th April Part 3 Grant claims: information and evidence required 3. In order to help the Secretary of State process payments efficiently it would be useful if claims were submitted using the proforma to be provided by the Department. This will also help the Department for audit purposes. Terms of the appropriate senior local authority officer s declaration 4. Grant claims should be accompanied by a declaration from a senior officer of the Authority in the following form: I confirm that I have considered the information and evidence provided in support of this grant claim, as well as the provisions set out in the MoU, and: a) the information and evidence pertaining to this grant claim is complete, true and accurate; and Page 12 of 17 b) we have complied with the principles set out in the MoU. Signed: Printed name: Position: Date:

9 Page 13 of 17 ANNEX 2 Changes to the Proposal 1. The Authority agrees that it will not make changes to the Proposal without the written agreement of the Secretary of State. Progress and completion of the project 2. Milestones for the delivery of the project have been agreed with the Secretary of State as part of the Proposal. In line with published competition guidance the Secretary of State has a reasonable expectation that activity will be completed by 31 March Other requests relating to the Proposal 3. The Authority has agreed to give reasonable assistance to the Secretary of State or the Secretary of State s contractors to carry out work in connection with this grant post-completion, for example as part of the Secretary of State s ongoing evaluation commitments up to 2 years after work has been completed. 4. The Authority has agreed to complete a short self-evaluation report at the end of the project forming the Proposal to be returned to the Secretary of State by 30 April A pro forma will be provided by the Secretary of State. Evaluation information may be published by the Secretary of State to enable greater transparency. 5. In order to facilitate final Green Deal system preparations, please note that Green Deal Plans can be registered from 21st January 2013 onwards, in advance of writing full Green Deals on the 28th January Record keeping 6. In response to Freedom of Information requests the Secretary of State may make records (other than those which are commercially confidential or subject to the Data Protection Act) publicly available, for the purposes of transparency and to assist in the process of accountability by Local Authorities for their expenditure. 7. The Authority has agreed to keep records relating to any spending funded (or defrayed) by the grant. Such records should indicate: a) the identity of the third party concerned and their business; b) the amounts they have been given; c) the purpose for which the money was spent; d) evidence that the contracts have been awarded in accordance with public procurement law; and e) any significant sub-contracting by the Authority. Monitoring and Audit 8. The Authority has agreed to: a) respond fully, truthfully and promptly to any enquiries the Secretary of State, or the Comptroller and Auditor General, or their representatives, may make about the Page 14 of 17 project or the use of the grant and provide any information and evidence reasonably requested, including by providing a statement of grant usage (at such times, and in such form, as they may reasonably specify);

10 b) allow the Secretary of State, the Comptroller and Auditor General, as well as the general public, and their representatives, access to all relevant documents and records, and reasonable access for inspecting any relevant site; and c) where requested, ensure that any information or evidence provided to the Secretary of State, the Comptroller and Auditor General, or their representatives, is audited by an identified and independent reporting accountant or otherwise confirmed or verified by a person of such other relevant expertise as they may reasonably specify. Procurement and other benefits to third parties 9. In so far as the eligible costs are incurred in the purchase of goods, works or services, the Authority has agreed to: a) comply with all relevant requirements of law relating to public procurement; and b) unless the Secretary of State agrees otherwise in writing, pay the person from whom the goods, works or services are purchased within 30 days of receiving a valid invoice from that contractor. Commercial use of the grant 10. The Authority has agreed not to use the grant, or any asset financed wholly or partly by it, to generate revenue or make a capital gain. If it does so, it: a) will inform the Secretary of State immediately and in writing; and b) understands that the grant to which the Authority is entitled will be reduced by the amount of that revenue or gain (as the case may be). ECO/Warm Front/Feed-in-tariffs/Renewable Heat Incentive/Other incentives 11. Where the project utilises other DECC funding programmes the Authority has agreed to comply with the relevant requirements of those programmes. Intellectual property 12. In undertaking the project, the Authority has agreed not to infringe the intellectual property rights of any third party. 13. Where the Proposal gives rise to the generation of any intellectual property, the Authority agrees not to subsequently seek to make profit from for the use of such intellectual property, for example through the use of licences. 14. The Authority agrees to allow the Secretary of State royalty free use of any photographs taken of any work undertaken pursuant to the Proposal. Compliance with the law 15. The Authority has agreed to comply with all laws and regulatory requirements. Anti-discrimination Page 15 of The Authority has agreed to comply with the requirements of the Equality Act 2010 and avoid any unlawful discrimination. Responsibility for employees, contractors, agents and partners 17. The Authority has agreed to ensure that its employees, contractors, agents and partners comply with the principles set out in the MoU and that the Authority will be responsible for any breach by them of those principles. In particular, the Authority has agreed to be responsible for ensuring that other Local Authorities and/or organisations referred to in the Proposal, or which participate in the project, comply with the principles of this MoU. Warranties 18. In agreeing to this MoU, the Authority represents and warrants that:

11 a) it has full capacity and authority to undertake the Proposal and to agree to the principles of the MOU and its Annexes; b) it will obtain any consents necessary to undertake the Proposal; and 19. The information and evidence in its application remains true, complete and accurate, and that its circumstances have not materially changed since submitting its application. The Authority knows of the existence of no circumstances which might materially and adversely impact on its ability to undertake the Proposal or meet with the principles set out in the MOU. Limitation of liability 20. The parties agree that the Secretary of State s liability to the Authority is limited to payment of the grant (subject to the Authority s compliance with the principles of the MOU and its Annexes and to the Secretary of State s rights set out therein). The Authority remains entirely responsible for its risks and liabilities in undertaking the Proposal, and the Secretary of State shall have no liability for any consequence, direct or indirect, that may arise through the Authority undertaking of the Proposal or its use of the grant. Indemnity 21. The Authority agrees to indemnify the Secretary of State against all claims, demands, actions, proceedings, costs, charges, expenses, losses, damages or other liabilities arising from the Authority s acts or omissions, or those of its employees, contractors, agents or partners, in undertaking the Proposal and in using the grant. Reporting 22. The Authority has agreed to provide the Secretary of State with a monthly dataset related to activity delivered through this funding. DECC will not publish individual property information which would enable the identification of properties or people. It would be useful if this information could be provided using the proforma to be provided. 23. For Cheaper Energy Together the Authority has agreed to provide the Secretary of State with any material used to explain schemes to consumers. This will provide useful learning in this innovative area. Page 16 of 17 Annex 3 SECTION 151 OFFICER DECLARATION In my position as the Section 151 Officer for Watford Borough Council, I confirm that: a) Watford Borough Council will accept the grant funding that it has been offered through the DECC Local Authority Competition; b) The information and evidence pertaining to future grant claims will be complete, true and accurate; c) Watford Borough Council will deliver the goods and services that have been set out in the Proposal in accordance with the terms of the Proposal; and d) Watford Borough Council will comply with the provisions of the Memorandum of Understanding dated 11 January 2013 in connection with its delivery of the Proposal. Signature:. Name:

12 Position:... Head of Strategic Finance, Watford Borough Council... Date:...18 th January Page 17 of 17 Annex 4 The Proposal (see separate attachment)