Budget pressures force council to withdraw its financial support from Hybont project
Posted on: Tuesday 19 September 2023
Bridgend County Borough Council has confirmed that the authority intends to ‘reluctantly withdraw’ its financial support for the Hybont green fuel project in the face of a predicted multi-million pound deficit for 2024-25 and significant new budget pressures.
Senior politicians at the council have stressed that the decision is ‘purely financial’ and that while the authority still recognises the importance of developing new, cheaper, cleaner sources of fuel and energy, they are being increasingly forced to choose between supporting such projects, and protecting essential services.
Speaking at a meeting of Cabinet, Leader Huw David said: “By signing a memorandum of understanding with Marubeni Europower and confirming our support for developing a hydrogen starter project, we recognised the urgent need to develop cleaner sources of fuel and energy in the face of rising costs and climate change.
“While that need continues to remain a priority, we now find ourselves in a position where we may soon be forced to choose between providing financial support for such projects, or ensuring that we have sufficient resources in place to be able to continue to provide and prioritise essential frontline services.
“We have to ask ourselves, can we really afford to commit to spending around £6.5m on this project when, like other councils, we are also predicting a multi-million pound deficit and hugely significant new budget pressures for 2024-25?
“Faced with such difficult choices, we must always prioritise essential services for local people, and it is for this reason that we have decided to reluctantly withdraw our financial support for the Hybont project while also continuing to recognise the importance of sourcing alternative fuel and energy sources.”
With support for the project in place from Welsh Government and Cardiff Capital Region, Japanese renewable energy specialists Marubeni Europower had previously selected Bridgend County Borough as its preferred UK location for a green hydrogen demonstrator project.
A site for a potential new facility, which could generate clean fuel for fleet vehicles ranging from council gritters to recycling and refuse collection lorries, has been identified at Brynmenyn Industrial Estate, and Marubeni have submitted a planning application which is currently being processed.
Councillor John Spanswick, Cabinet Member for Climate Change and Environment, added: “You only have to look at what is happening at other councils around the UK to know that we are all facing similar extreme financial difficulties and severe challenges.
“In an ideal world, we would be sufficiently resourced enough to be able to provide council services while also supporting ground-breaking projects such as this. Unfortunately, we face a reality where in recent weeks, some UK authorities have had to declare themselves effectively bankrupt, so it is absolutely vital that we remain very rational about the situation before us.
“We are looking at capital costs of at least £6m and revenue costs of around £525,000, both of which will be extremely difficult to provide within the predicted financial environment.
“Faced with such a choice, we must prioritise services for local people, especially in areas such as social services and education.
“But, because we also continue to recognise the importance of developing alternative sources of fuel and energy, we have agreed to speak to partner organisations such as Welsh Government and Cardiff Capital Region, and to see if an alternative way forward can be identified.
“These talks are being arranged now. In the meantime, the planning application which has been submitted by Marubeni for a proposed site in Brynmenyn remains a separate process, and is currently being determined in line with normal planning rules and regulations.”
- To view the full Cabinet report on the Hybont project gateway review, visit the Cabinet agenda page at bridgend.gov.uk