Council Respond to Accounts Commission Report On CHaP

2nd March 2011

The Highland Council has put in place new governance arrangements to prevent a recurrence of the deficiencies experienced in the early operating years of Caithness Heat and Power, the community-owned enterprise formed to deliver a biomass district heating system in Wick.

The Accounts Commission has ruled that the lack of appropriate risk management and effective governance arrangements for the project was a corporate failure by the council.

The Council took control of the company in 2008 and, having identified failings of the company between 2004-2008, carried out its own internal audit, which identified an action plan to tackle the failings of the company and ensure these would not be repeated.
A spokesman said: "As the result of a detailed internal audit review, a number of improvement actions have been taken to ensure that these failings are not repeated in any future venture of this nature. A huge amount of effort has gone into finding a way forward for the district heating scheme in Wick. We have selected a preferred bidder, whom we hope will deliver a district heating scheme using renewable energy and at an affordable price for local residents."

Ignis Energy Ltd has been invited by The Highland Council to be its Preferred Bidder to take over the district heating scheme - Caithness Heat and Power Ltd.

The Board of Caithness Heat and Power Ltd (CHAP) recently wrote to 260 householders in Wick who receive their heat and hot water through CHAP informing them of plans to work with the Council and Ignis with the aim of agreeing a contract soon.

The Council will consider the findings of the Commission in the near future. It has a duty to publish in a newspaper circulating in the Highlands the time and venue of the meeting seven clear days in advance of the meeting at which the findings will be discussed. It has also to publish the recommendations of the Commission.