A purposive reading of AC A8, a worked analysis of the SMRI population in a local authority, and a mapped view of what existing governance already covers.
Opinion and interpretation — not legal advice. This page sets out Heat Network Compliance's interpretation of how Authorisation Condition A8 applies to local authorities. Ofgem has not published authority-specific SMRI guidance. Nothing on this page is legal advice. Each authority should satisfy itself as to its own position.
Authorisation Condition A8 (Ongoing Fit and Proper Requirement) says an authorised person must not appoint, or retain in post, anyone holding Significant Managerial Responsibility or Influence (SMRI) unless they are fit and proper.
A8.2 requires robust processes and regular reassessment. A8.3 lists sector-specific criteria.
Councils registering with Ofgem must submit an SMRI declaration. The registration deadline is 27 January 2027 — the last day of the first part of the initial period under regulation 26 of the Heat Networks (Market Framework) (Great Britain) Regulations 2025. Ofgem's guidance states "by 27 January 2027"; work to the 27th.
Under Condition A3, a person holds SMRI where they play a role in deciding how, or in actually managing or organising how, "the whole or a substantial part" of the authorised person's activities are run.
That wording works for a company whose whole business is the heat network. It works badly for a council, where the network is a tiny part of what the council does. Read literally, it maps poorly onto a local authority.
Our interpretation is purposive: the SMRI population is those with effective decision-making authority over the regulated activity itself.
Ofgem's Registration Guidance v1.0 (23 January 2026), paragraph 3.39, supports that focus: SMRI holders may include not only directly employed staff but also certain advisors or consultants with effective decision-making authority.
The Head of Paid Service, the Section 151 Officer and the Monitoring Officer are not ordinarily SMRI. They govern the council. They do not make decisions about the heat network. They come into scope only if they exercise direct managerial responsibility or effective decision-making authority over the regulated activity. Record the rationale in the SMRI policy.
Elected members are also typically out. Oversight, policy and budget-setting through democratic processes is not managerial responsibility.
There, the company is the authorised person and its board members are within SMRI scope for that company — including elected members appointed to that board. A councillor can be out of scope for the council and squarely in scope for the ESCO.
Most of A8 is already met in whole or substantial part by controls every authority routinely operates:
A compliant SMRI policy should cite them. But none of it screens anyone against the sector-specific A8.3 criteria. No council HR process asks about Last Resort Supply Directions, Special Administration Orders, the rogue landlord database, or Relevant Orders under the Housing Act 2004.
The gaps close with a declaration form and three register checks.
The three checks:
The declaration form covers the seven A8.3 criteria no register can verify: misconduct in a regulated sector, unspent convictions, Last Resort Supply Directions, Special Administration Orders, tribunal-appointed managers under the Landlord and Tenant Act 1987 ss24/24ZA, Housing Act 2004 Relevant Orders, and regulatory action history.
Finally, adopt a reassessment cycle. A8.2.2 requires regular reassessment of serving officers, and SMRI declarations expire after three years (Registration Guidance, paragraph 3.40). This is a recurring duty, not a one-off.
The whole delta is a documentation exercise measured in days, not a new HR process.
| A8 Requirement | Existing LA Control | Coverage | Residual Action |
|---|---|---|---|
| A8.2 — SMRI identification | Constitution and scheme of delegation | COVERED | None — record the SMRI population and keep it current |
| A8.2 — Robust appointment process | LGHA 1989 s7; SI 2001/3384 (standing orders for chief officer appointment and dismissal) | SUBST. COVERED | Confirm A8.3 criteria were applied at the point of appointment |
| A8.2 — Governance and oversight | Monitoring Officer (LGHA 1989 s5); Section 151 duties; audit committee | SUBST. COVERED | Maintain evidence that governance controls are operating |
| A8.3.1 — Misconduct in a regulated sector | Self-declaration — sector-specific question not yet in standard HR process | PARTIAL | Add question covering misconduct in a regulated sector to declaration form |
| A8.3.2 — Unspent convictions | Self-declaration each cycle — Rehabilitation of Offenders Act 1974 protects spent convictions only | PARTIAL | Declaration required at each reassessment cycle |
| A8.3.3 — Insolvency | Self-declaration plus Individual Insolvency Register check not routinely run | PARTIAL | Run Individual Insolvency Register check; record nil return or outcome |
| A8.3.4 — Director disqualification | No existing routine check against Companies House disqualified directors register | GAP | Run Companies House register check; record nil return |
| A8.1 / A8.2 — Honesty and integrity | Officer codes of conduct — ongoing limb not separately assessed against A8 criteria | PARTIAL | Declaration plus periodic reaffirmation of compliance |
| A8.1 / A8.2 — Competence | Appointment records; professional memberships; appraisal — not mapped to A8.3 criteria | PARTIAL | Document competence specifically against A8.3 criteria |
| A8.3.5 — Last Resort Supply Direction | No public register exists — declaration only | GAP | Declaration question — confirm no applicable direction |
| A8.3.6 — Special Administration Order | No public register exists — declaration only | GAP | Declaration question — confirm no applicable order |
| A8.3.7 — LTA 1987 ss24/24ZA manager appointment | No existing check — tribunal-appointed management not tracked by LA HR | GAP | Declaration question |
| A8.3.8 — Rogue landlord database | Access restricted to local housing authorities — no routine compliance check | GAP | Check database where lawful access exists (LHAs only) or obtain declaration; record outcome |
| A8.3.9 — Housing Act 2004 Relevant Orders | Own enforcement records held — defined term not routinely applied to HR process | GAP | Declaration using defined term (prohibition orders ss20–21, demolition order s46, management orders ss102–103); check own enforcement records where lawful |
| A8.3.10 — Regulatory action history | No routine cross-regulator check in any jurisdiction | GAP | Declaration covering all regulators in all jurisdictions |
| A8.2.2 — Periodic reassessment | No formal reassessment cycle tied to the 3-year maximum or trigger events | GAP | Adopt 3-year maximum cycle with defined trigger events (AC A8.2.2 and Registration Guidance para 3.40) |
Coverage tally: 1 covered, 2 substantially covered, 5 partial, 8 gaps. Coverage assessed against what an authority routinely does, not what it could lawfully do.
The two-page mapping table in PDF format — suitable for inclusion in an SMRI policy or board paper.
Download the two-page mapping (PDF) ↓Reminder — opinion and interpretation, not legal advice. This page sets out Heat Network Compliance's interpretation of how AC A8 applies to local authorities. Ofgem has not published authority-specific SMRI guidance. Nothing on this page constitutes legal advice. Each authority should satisfy itself as to its own position.
The approach on this page is implemented in the Fit and Proper Persons Policy template on the HNC Policy Generator. The template covers SMRI identification, declaration, register checks, and the reassessment cycle — ready for legal sign-off and Ofgem registration.
Open the HNC Policy Generator