We want to change how we buy communal energy so that we can give you better value.
Section 20 dispensation granted
We have great news! Our application to dispense with the consultation requirements imposed by Section 20 of the Landlord and Act Tenant 1985, in respect of our procurement of gas and electricity, has been successful!
This means that we can procure gas and electricity for the period 1st October 2024 to 30th September 2028 using any mix of strategies (i.e. fixed or ‘wholesale portfolio strategy’), and with flexibility as to the length of the contracts.
This is good news because it lets us choose from a broader range of products so that we are more likely to be able to get a better deal – meaning the costs that we pass onto residents are more likely to be lower.
Unfortunately, due to current market conditions, after going out to tender for our new energy deals to start in October 2024, we have only been offered one year contracts. However, we hope that market conditions will become more favourable into next year, and if this is the case, the dispensation will let us enter into longer term contracts after the shorter term one ends (that will run from 1st October 2024 to 30th September 2025).
Although we had hoped to be more offered longer term deals to commence from this October, the new contracts which we have secured will nevertheless offer better value than the existing ones, and the vast majority of residents will see improved tariff rates reflected in their service charges.
If you would like more background information, please refer to the FAQs below and the archived documents outlining the process.
Section 20 dispensation – update for residents and FAQs
In January 2024 we told residents about the long-term contract for energy which we are aiming to enter into (see ‘archived documents’ for more details). We’re looking at ways to get better value for money for the gas and electricity which is supplied to the communal areas you share with other residents, and in some cases, to your home, through our energy supplier. To make sure we get the best deal we are hoping to enter a new long-term contract, for better value for money than a short-term contract.
To enter a long-term contract, we would usually need to consult with you by following the process set out in Section 20 of the Landlord & Tenant Act 1985. This process usually takes several months. However, because energy suppliers are only able to ‘lock in’ the best available prices that they can offer for a very short time (usually one working day), we aren’t able to follow the usual consultation process. Instead, we submitted an application to the First Tier Tribunal (Property Chamber) (the Tribunal) for what’s known as dispensation from these requirements.
Section 20 Dispensation
We submitted our application for Section 20 Dispensation in February 2024 and are waiting to hear the outcome of this from the First Tier Tribunal.
As part of the Tribunal’s consideration of the Section 20 Dispensation, the Tribunal has directed us to provide all of the affected tenants and leaseholders of the 1,220 affected homes with a bundle of specified documents associated with our application for Section 20 Dispensation. We have emailed or posted letters to those residents with the information, which includes:
- The Directions issued by the Tribunal ordering a bundle to be sent
- Our application for Section 20 Dispensation and any accompanying documents
- A statement of case explaining why we have made this application to the Tribunal
- Copies of any other documents we seek to rely on as evidence as part of our application
Please contact consultationobservations@castlesandcoasts.co.uk if you do not receive this information by 12th June 2024, and you would like the information to be sent to you.
Update on long-term contract for energy and electricity
Our energy broker, Inenco, has advised that due to current conditions in the energy market, it has not been possible to secure a four-year contract using a ‘wholesale portfolio/purchasing strategy’ starting from 1st October 2024 as planned.
We also have not yet been given Tribunal approval for the Section 20 Dispensation, which means that we haven’t been able to take advantage of recent low energy price rates, by entering into a long-term fixed price agreement for the supply of electricity and gas.
For both of the above reasons, we now aim to enter into a 12-month fixed price ‘bridging contract’ from 1 October 2024, to then enter into a contract for up to four years using a wholesale purchasing strategy from 1st October 2025.
If you have any questions, please contact us:
- By telephone on 0800 085 1171
- By email at consultationobservations@castlesandcoasts.co.uk
- By post to Castles and Coasts Housing Association, 5 Paternoster Row, Carlisle, CA3 8TT
We’ve put together some updated FAQs below to help explain our current position.