Public Sector Decarbonisation Scheme Phase 1: Section 31 Grants
BEIS has given Salix Finance approval to allow Phase 1 Public Sector Decarbonisation Scheme (PSDS) projects that have been funded under Section 31 of the Local Government Act 2003 to have longer to complete.
Some PSDS Phase 1 grants were made under Section 31 of the Local Government Act 2003 which provides Government with a general power to give grants to local authorities for any purpose. The definition of local authorities includes unitary, district and council councils, Combined Authorities and police and fire authorities.
Under Section 31 it means that if a project cannot be completed by 31 March 2022, Salix Finance can exercise discretion in approving practical completion dates up to, but no later than, 30 June 2022.
The purpose of this discretionary extension for Section 31 grant recipients is to enable the completion of projects where grant recipients are already in receipt of funding but are not able to complete by 31 March 2022.
Section 31 grant recipients that can complete projects by 31 March 2022 should still do so. This discretionary extension period is intended to allow flexibility for grant recipients that may have risks that challenge their ability to complete projects by 31 March 2022 and, give Section 31 grant recipients confidence that there is a mechanism for a short extension if required.
To request an extension beyond 31 March 2022, grant recipients will need to demonstrate to Salix Finance that:
- The project has started – clients will need to have provided evidenced spend on the project to Salix Finance before we can grant an extension.
- The extension must be necessary for a project to complete – clients will need to provide evidence to support this.
- Clients have a credible plan to complete the project by 30 June 2022, or otherwise can demonstrate that any remaining funding which will still need to be spent to complete the project after that date will be provided from other sources.
The mechanism for formally agreeing any extension will be the existing Change Request process. To be successful, clients need to meet all three conditions as set out above.
The evidence will be reviewed by Salix Finance, and if approved, a further Grant Amendment Letter will be issued with a revised practical completion date.
If clients think that Section 31 project may need an extension beyond 31 March 2022, then they should contact their relationship manager at the earliest opportunity to discuss why the project cannot complete by this date, the extension to be requested, and whether or not it might be possible in their particular circumstances to secure an extension beyond 31 March 2022.
Salix Finance will also be holding a webinar on Tuesday,1 February at 2pm to give clients an opportunity to ask questions around Section 31 grants. More information about the webinar will be posted here shortly.
Please see our FAQS, below
S31 extensions - Key questions
1. How do I secure an extension for my Section 31 project?
- If you are concerned that your Section 31 project may need an extension beyond the current project completion date of 31 March 2022, please discuss this with Salix at the earliest opportunity.
- The mechanism by which grant recipients can apply for an extension is the Change Request process, demonstrating compliance with the three conditions as set out in the letter from Salix dated 5 January 2022:
- The project has started – in practical terms grant recipients will need to have evidenced spend on the project to Salix before an extension can be granted.
- The extension must be necessary for the project to complete - the grant recipient will need to provide evidence to support this.
- The grant recipient needs to have a credible plan to complete the project by 30 June 2022, or otherwise can demonstrate that any remaining funding that will still need to be spent to complete the project after that date will be provided from other sources.
2. What do I need to do to prove my project has started?
- You will need to have provided Salix evidence of spend on the project in the form of a Statement of Expenditure supported by invoice(s) for works completed – this is the same process already used by Section 31 grant recipients to provide evidence of expenditure and many will have already done this.
3. How do I demonstrate that it is necessary for an extension beyond 31 March for the project to complete?
- Typically, Salix will want to see evidence from your supplier and/or contractor as to why the planned works can no longer be completed by 31 March 2022, as well as an updated project plan showing the impact of the issue on the overall project delivery.
4. What is needed to show I have a credible plan to complete the project by 30 June 2022?
- You will need to provide to Salix a project plan and risk register demonstrating that your project will complete by 30 June 2022 and that the risks to delivery can be mitigated.
- In some cases, we may ask to see additional evidence from your contractors and/or suppliers confirming that they can deliver the equipment and works needed in line with the plan.
5. I had already committed to funding any works after 31 March 2022 from alternative sources of funds, how would an extension affect this?
- If your project can complete by 30 June 2022 and Salix supports your extension, then you will be able to spend your grant funding on the project.
- If your project cannot complete by 30 June 2022 then, if Salix grants an extension under this change, you can spend grant money on works that take place up until 30 June 2022, but will need to fund any works after that date from alternative sources.
6. I’ve already formally abandoned my project. Is it possible to reverse that and restart it?
- No, this arrangement is intended to mitigate risks for projects that are underway. Any grant recipient that has already formally closed a project by writing an abandonment letter to the Salix CEO will not be able to restart the project.
7. Is it possible to submit a Change Request to reinstate elements of my project that were previously de-scoped in order to ensure the overall project could deliver by 31 March 2022?
- Yes. However, your scope change will need to be assessed and approved by the Salix technical team as well as meeting all the other conditions of an extension beyond 31 March 2022.
- Any scope changes should be submitted alongside the extension request as part of the same change request.
8. Will there be any flexibility to provide further extensions past 30 June 2022?
- No, discretionary extensions for Section 31 grant recipients can be provided up to 30 June 2022 at the latest, and only with approval from Salix that the conditions for an extension have been met.
9. Do all section 31 projects automatically have an extension to 30 June 2022?
- No, you have to apply using the Change Request process to Salix and meet the conditions for an additional extension.