Ensuring the participation of SMEs in retrofit schemes in Plymouth
About this good practice
Many SME’s find the challenge of engaging with a municipality procurement a major barrier and simply do not attempt to respond to tenders. This is true of domestic retrofit schemes to private homes where the total value of the project is in the Millions of Euro. There is a conflict because the economic policies of the municipality are clear that procurement of local providers is mandatory where possible – yet the local SME’s in the retrofit space do not have the resources or capacity to undertake such a procurement. This good practice provides a route for the SME’s to capitalise on the opportunities connected with retrofit projects, without the need to complete lengthy procurement processes which they may not pass anyway.
The process is a simple one. Instead of procuring company a and b to deliver retrofit the municipality dispenses the retrofit funding in the form of individual grants to house holders. The householder is free to choose whichever installer they like as long as they meet the criteria of the grant agreement with municipality. By using this mechanism it enables local SME’s to be part of the local solution and benefit from potential works via the funding opportunity.
In order to promote financial recovery from Covid it was essential to support local SME’s. This ensured protection of local jobs and also retained local capacity to deliver and install in the retrofit sector. It also provides a deliver outlet and for the financial mechanism that is chosen.
Less resource is needed for this than a procured solution. Admin support is required to process household grants and legal support to set up the householder grant agreement. Currently it costs approx. 150,000 euro p/a on staff - which has realised benefits in excess of 10 million euros.
Evidence of success
We have delivered over 1,000 private domestic retrofits using this process. These have been through a variety of government and non-government funding streams. The process works regardless of where the funding is coming from. Local SME’s have benefitted from an increased turnover of £10m in total since we began using this process.
Potential for learning or transfer
This mechanism of disseminating funding is a key method of ensuring local economic recovery amongst SME’s. As such it can form part of any regions wider recovery plans and allows SME’s to benefit from EU, national, and external funding for retrofit.