The government has not awarded a £70 billion net zero contract to a small Cornish company

4 August 2022
What was claimed

The government has awarded a £70 billion contract for ‘Everything net zero’ to a company with only two employees in Cornwall.

Our verdict

This is not right. A not-for-profit group of local councils in the East of England has selected a company registered in Cornwall (which said it had an average of two employees in 2019) to run tender competitions for contracts for the public sector bodies like schools and hospitals to achieve their net zero goals. The maximum amount that can be procured through it is £70 billion, but the company has not been given this amount of money from the government.

A post on Facebook claims that the government “has awarded a £70 BILLION contract for ‘Everything net Zero’” to a company with only two employees.

The Facebook post is a screenshot of a since-deleted tweet.

But the claim that a Cornwall-registered company, Place Group Limited, has been awarded a £70 billion contract by the government, is not correct.

As pointed out by Matt Honeycombe-Foster, Politico’s UK policy editor, on Twitter, the reality is “quite boring (but much less viral)”.

Confusion arose when the government’s Contracts Finder website, which allows you to search for public sector contracts worth over £10,000, including those that are up for tender and those that have already been awarded, published an entry which appeared to show that a contract with a value of £70,000,000,000 had been awarded to a supplier called Place Group Ltd. 

Details on Companies House show that Place Group Ltd’s 2020 financial statement showed it had net assets of £344,417 and an average number of employees of two, in 2019 and in 2020, as the original tweet claimed.

The contract was awarded by a ‘regional consortium’ of local councils and schools called the East of England Broadband Network (E2BN). As a not-for-profit public body, it was able to publish the details of the agreement on Contracts Finder. 

E2BN published a tender for the Everything Net Zero framework. Everything Net Zero is a framework designed to help organisations like schools, colleges, fire, police and transport services with procurement to advance the move toward net zero greenhouse gas emissions by 2050. This includes things like installing solar panels, reducing emissions and improving waste management, amongst other things.

E2BN’s deal with Place Group Ltd is not a contract in the traditional sense, as E2BN is not paying Place Group £70 billion to deliver services. Rather, £70 billion is an estimate from E2BN of the highest maximum turnover the framework could generate over its lifetime.

Place Group won a contract to run tender competitions on behalf of public-sector bodies which are procuring services to help reach their net zero goals. Place Group says it will “invite leading sustainability organisations to tender for contracts, undertaking cost benchmarking to ensure the public sector gets best value for money”.

Or as Mr Honeycombe-Foster explained: “essentially, the supplier chosen [by E2BN] becomes a middleman, matching up companies who can work on green projects with local councils, schools and hospitals”.

So where does the £70 billion come in?

According to E2BN, the Everything Net Zero framework has a “limit of £70bn that can be procured through it”. It has also said that “no government money has been promised or provided under the Everything NetZero framework contract”.

When schools and other public sector bodies start procuring contracts through the framework though, they will pay the contractors providing services, which will likely use public money.

So what will Place Group earn from this if not £70bn? According to a statement, it said: “Like all frameworks supporting public sector procurement, our costs are covered from a very small framework levy that suppliers pay if they win contracts.”

Image courtesy of Bill Mead

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