Investing in your future: Local authority procurement for a net zero world

Tasked with balancing environmental action and weak economic conditions, local authorities face tough decisions in 2023-24. Martin Guttridge-Hewitt considers the importance of circular green investment, and citizen-led routes to financing these essential projects.

When Jeremy Hunt presented the UK’s Spring Budget this month, he outlined spending for the fiscal year ahead and, as expected, revealed which purses would be tightened to steer us back towards economic stability after a tumultuous half decade. Brexit, the pandemic, cost of living and energy crises have hit hard. The signs are everywhere.

One thing is for certain, though –reining spending in cannot be at the expense of green investment, whether insulating housing stock or expanding air quality measurement infrastructure. By 2050, Britain must reach net zero emissions, an impossible task without improvements in energy efficiency, transport and food production. But an in-depth picture of pollution levels is also essential, because without that we’ll never properly understand the air we’re dealing with, or what’s necessary to clean it up.

Those who saw UK100’s recent report, End the Wait, Insulate will understand there are fundamental flaws in how some challenges are addressed and financed. The Government approach to boosting energy efficiency in social housing currently involves a competitive funding process, pitting local authorities against each other for grants.

This means areas are missing out on investment at a time when investment is needed across the country. Meanwhile, low uptake of the public-facing Boiler Upgrade Scheme –largely blamed on poor communication from Downing Street and relevant skills shortage - is also a concern. But some councils are making inroads.

‘Local authorities across the country are taking important steps to retrofit social housing and to support others to retrofit their own homes,’ says Matthew Ahluwalia, Programme Officer at climate change charity Ashden, citing North East Derbyshire District Council and Wiltshire Council as good examples, explaining that UK housing stock remains one of the least energy efficient in Europe, a reality that is harming the climate, fuelling the energy crisis, and creating unhealthy living conditions.

‘In Spring 2022 Ashden published our Retrofit: Creating Warmer Homes report to address the challenges facing local and national government in implementing a national retrofit programme to transform our housing stock. Through this report, we also highlighted the best practice that is taking place to make housing more sustainable in the UK in order to equip local government officers with the long-term solutions to tackle the energy crisis,’ he adds.

City of York Council is another regional power lauded for its efforts. The Retrofit Action Plan aims to bring all social housing in the borough up to a C rating on the Energy Performance Certificate scale within the next five years. £5m in central Government funding has been secured, with 590 installations scheduled to complete by the start of the forthcoming financial calendar. For Cllr Denise Craghill, it’s crucial that we start looking at this expenditure differently.

‘Stop thinking in terms of setting zero carbon against affordability. We are the midst of a climate emergency and overall, we have to achieve zero CO2 emissions from buildings – the Government should be subsidising the scaling up of energy saving retrofit programmes to a far higher level than it is at the moment. There has been a slight improvement recently with funding programmes lasting a little longer, but we need to move away from one scheme after another, still on relatively short timescales, and see large scale, long term and consistent Government investment,’ she tells us.

In its report, Local Decarbonisation Opportunities and Barriers: UK Public Procurement Legislation, the academic journal Buildings and Cities identifies various problems and potential routes to funding for public green projects. The section on ‘place-based finance’, Community Municipal Investments (CMIs), or as they are often called, Local Climate Bonds (LCBs), is particularly relevant to local authorities facing tough economic decisions.

Developed by Dr Mark Davis at the University of Leeds, as part of a wider 2019 project, Financing for Society, the idea is straightforward. Local authorities use the crowdfunding platform Abundance Investment to grow and organise revenue for climaterelated projects. Residents can pay as little as £5 towards a scheme. The more successful promotion of that scheme is, the more people get involved, and the greater the overall investment level is.

This framework has proved successful, with authorities in Eastbourne, Westminster, the Cotswolds, Gwent, Camden, Islington, Lewisham, Warrington, and Telford among those listed as ‘Committed Councils’ using LCBs. Common examples of projects include building solar farms, improving social housing energy efficiency, and installing electric vehicle charge points. It’s also worth noting that the crowdsharing platform creates all documents covering legal and technical aspects of becoming directly involved – in this case by donating money – significantly increases. how LCB financing works, so council staff hours can be focused on other tasks – another efficiency saving.

If one mantra has risen to the top of the climate agenda, it’s the idea of circular thinking and connectivity. For example, we cannot hope to tackle air pollution without simultaneously looking at waste, recycling, energy use, transport, how we build, and our approach to retrofitting. These issues may have once been seen separately, but today they must be addressed in tandem with a raft of other challenges or our efforts will be redundant.

Earlier research by the Local Government Association into public communication offers more evidence to support the Local Climate Bonds model. By providing in-depth breakdowns of what a project is and expected results, residents feel more involved and understand what’s being undertaken on their behalf. In turn, they are more likely to see council efforts and use of public money favourably. So, the chances of them

A similar mindset needs to be adopted for investment and finance for green projects. By opening new revenue streams there is more opportunity to launch projects together, and in order to maximise return on investment, and impact, it’s now essential for us to approach things in this way.

That means a drive to decarbonise local authority buildings must tie in with a comprehensive expansion of air quality measurement tools around those sites. Simply put, procurement for a net zero world cannot be piecemeal – plurality and longevity offer the only real value for money.