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Highland council criticised over governance deficiencies in CHaP plant

Highland council has been criticised by Scotland’s Accounts Commission for failing to establish “effective governance” over a community heat and power project.

According to a report made by the controller of audit to the accounts commission, it “seems likely that Caithness Heat and Power (CHaP) will not achieve all its objectives and that service users will not receive the full benefits anticipated.”

The CHaP project was envisaged as a woodchip fuelled district heating system by the Caithness Area Committee in 2002, and a company was formed to deliver the project.

However, CHaP ran into problems when woodchip prices began to rise, and local council officers recommended switching to gasification technology ahead of schedule.  The change was not relayed to the full council until seven months after the CHaP began considering tenders for the technology.

Accounts Commission for Scotland chair John Baillie said: “The CHaP project was established as an innovative scheme to benefit the local community. Unfortunately, the council’s arrangements for managing its interest in the project were not as good or as effective as they should have been.”

“However, The Highland Council has been addressing the difficulties in governance and financial stewardship and has taken action to avoid a similar position developing again.”

A council 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.”
The news comes just days after the Government announced its long awaited Renewable Heat Incentive Scheme.”

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