Lambeth forced to rethink green retrofit scheme after contractor collapse – and a bigger bill to finish the job

Lambeth Council has been forced to step in and rethink part of its borough-wide green retrofit programme after its main contractor, Cenergist Ltd, went into administration over the summer

— leaving the work only 90 per cent complete and the Council scrambling to finish the job.

Cenergist had been hired under the government-backed Public Sector Decarbonisation Scheme to carry out low-carbon heating and energy-saving upgrades at ten schools and two leisure centres, including Streatham Leisure Centre.

The works, worth roughly £15.7 million, were meant to replace ageing gas boilers with modern air-source heat pumps, add solar PV panels and LED lighting, and help move Lambeth towards its much-touted Net Zero by 2030 target.

But when the company went bust on 25 July 2025, Lambeth was left with part-finished systems, temporary gas boilers costing around £5,000 a week, and lost solar revenue at Streatham LC of about £10,000 a month.

A new Officer Delegated Decision Report, due to be signed by Labour Cabinet Member Cllr Rezina Chowdhury, proposes a direct award of up to £250,000 to GEM Environmental Building Services to finish what Cenergist started.

GEM is an existing Lambeth supplier with experience in mechanical and sustainability work for schools and leisure centres.

The report seeks a formal waiver of the Council’s Contract Standing Orders to avoid a full re-tender, which officials say would be “not practicable” and would risk losing the £10 million Salix Finance grant that part-funds the scheme.

When the retrofit programme was first approved in August 2023, Lambeth Cabinet papers put the total cost at £14.48 million, with about £8.22 million coming from the government’s decarbonisation grant and £5.53 million from the Council’s own capital budgets.

Two years later, the numbers have shifted. The new report shows a total scheme budget of £17.23 million, funded by £10.42 million of grant money and £6.81 million of Council borrowing and reserves. Around £1.46 million remains available, part of which will be used for GEM’s contract.

That’s an increase of around £2.75 million (about 19 per cent) on the original forecast. Some of the rise can be blamed on inflation and the expanding scope of the project – but the contractor’s collapse clearly hasn’t helped.

The Council also faces estimated long-term borrowing costs of £538,000 over 50 years on the new spend.

The remaining works include hydraulic balancing, commissioning, water treatment and electrical finishing needed to bring the new heating systems online and to meet the grant’s strict monitoring standards.

Officials say the project must be completed urgently to avoid breaching contracts and to keep school and leisure centre heating systems functional through the winter.

Weekly performance meetings are planned to keep the project on track, with the Council’s Climate Change and Sustainability Team leading oversight.

The decarbonisation works promise improved air quality, better lighting and reduced carbon emissions. An equalities assessment notes particular benefits for children’s respiratory health by cutting nitrogen oxide emissions from gas boilers.

GEM, a London Living Wage employer, has pledged to offer at least one local apprenticeship and to work with the Council on social-value initiatives once the contract is underway.

The Council insists the project will stay within its revised £17.23 million budget and that the Salix grant won’t be jeopardised.

But after two years, one collapsed contractor and a near-20 per cent budget increase, Lambeth’s green retrofit drive has become a reminder that even the best-intentioned climate plans can go tits up when a contractor collapses.