Community Energy England bins JR

Trade association Community Energy England has abandoned judicial review proceedings against HM Treasury’s removal of tax relief from community energy enterprises.

CCE said it would not devote “scarce resources” to pursuing the matter and will instead “help the Treasury become better informed” about the benefits of bone fide community energy schemes so that it can reconsider its approach to Social Investment Tax Relief when expanded later this year.

Last November, CEE wrote a pre-action letter to the Treasury challenging the 30 November implementation of proposed changes to the Enterprise Investment Scheme and SITR on the grounds that it had given only five weeks’ notice of the change, and not the six months promised in the Budget.

In its reply to CEE, HM Treasury conceded this point but argued that an earlier ministerial statement stating it was ‘monitoring’ the schemes had in effect put community energy enterprises on notice that the policy might be changed without the agreed grace period.

CEE chair Philip Wolfe said the community energy sector rejects this argument and believes that a court would too.

“We are disappointed that HM Treasury refused to provide the results of its monitoring to justify its U-turn,” he said. “This isn’t a national security matter, so we have concluded that the evidence is too weak to be published.”

CEE said the Treasury’s response suggests it is concerned about commercial organisations dressing themselves up as community interest companies to take advantage of SITR.

“While we share this concern,” said Community Energy Wales chair Chris Blake, which also joined the action, “surely government can police this by proper drafting of legislation and regulation of the sector.

“As things stand, bona-fide social enterprises are becoming collateral damage in a heavy-handed move to prevent abuse by others.”

Several community energy projects did manage to beat the 30 November guillotine, said CEE, with an estimated £12m of community share offers funded in the five-week window before EIS was withdrawn on 30 November.

The deadline was too tight for many other projects, said Community Energy Scotland chief executive Nicholas Gubbins.

“This is not only a sad waste of time and money already expended, but also a loss of millions of pounds worth of future community benefit,” he said.

Image: Enercon turbine community project in Berwick (Sustainable Community Energy North East)