The integration of policy-making in national and local government to achieve net zero carbon emissions - House of Lords- 21 April 2021

Net-zero can only be achieved with decarbonisation happening in every place across the country – that’s every household, community, business, and local economy.

Key messages

  • Net-zero can only be achieved with decarbonisation happening in every place across the country – that’s every household, community, business, and local economy. This will require greater collaboration between national and local government, industry and citizens and local authorities will be key actors in brokering and delivering this vision.
  • Local government will play vital role in accelerating the shift towards achieving net carbon zero. Councils are already working hard to reduce emissions through their service delivery and regulatory functions, and by providing place-based leadership to convene stakeholders and coordinate ambitious climate change mitigation projects.
  • As leaders of place, councils have a unique insight into their communities needs and are best placed to drive carbon reductions across whole areas and achieve climate resilient communities, while addressing inequalities and delivering better outcomes in public health and thriving local economies. Over 230 councils have declared a climate emergency, with nearly two thirds of councils in England aiming to be carbon neutral 20 years before the national target of 2050.
  • We are recommending the Government work with councils and businesses to establish a national fiscal and policy framework for addressing the climate emergency, as recommended in the Climate Change Committee’s Local Authority Sixth Carbon Budget. The framework should outline responsibilities for the Government nationally – for example, aligning the regulatory system, including the planning system and national tax incentives with Net Zero targets – and the local responsibilities, together with a commitment to cooperate with local public sector bodies.
  • There should also be a process of engagement between central and local government to enable councils to fulfil their role to translate a national framework into transformative local plans that deliver on Net Zero and invest in solutions for a green recovery and future.
  • The Environment Bill points to a new environmental relationship between local and national government, with potentially greater responsibility sitting with councils. The impact of this is that councils will have a new environmental improvement role within their localities.
  • Local Government is well placed to take on this role and lead on the Net Zero agenda. The Government must ensure councils are resourced to do this, both financially and through legislation, to empower councils to drive decarbonisation and invest in transformative, place-based solutions. This must include further action to rapidly decarbonise local transport infrastructure and the UK’s building stock.

Local path to net zero – a national framework

  • It is crucial that existing and new policies to achieve Net Zero are matched with adequate funding to enable councils to deliver on this agenda. The current projected funding shortfall across local government risks limiting councils’ ability to upskill staff and carry out the additional work that is required to decarbonise communities and places across the country.
  • Identifying and securing funding for green place-based projects is key to delivering real change towards Net Zero. Introducing flexibilities to raise revenue locally could boost councils’ ability to deliver on climate change targets. England is one of the most fiscally centralised countries in the OECD. This means that local areas have limited powers to raise funds, and the way that they spend money is also strictly controlled by central government, with councils only having limited control over council tax and business rates. Research carried out for the LGA has highlighted how local authorities in Germany, Switzerland and Holland can access a diverse range of revenue sources. They are able to adjust and introduce local levies in consultation with their residents and businesses, innovating and diversifying their tax base in response to new public priorities, including addressing climate change.
  • There is increasing recognition of the important role ‘green finance’ must play in a just transition to a low-carbon economy, including divestment schemes. A recent report from the London School of Economics and the University of Leeds, produced in association with the All-Party Parliamentary Group (APPG) on Sustainable Finance, UK100 and HSBC looks at engaging the financial sector on the ‘levelling up’ agenda. It includes plans for mobilising public and private sector finance to deliver place-based projects which tackle both environmental and social challenges.
  • The LGA has published a practical guide for councils on financing green ambitions, which advises councils on the financial options for different projects, as well as sharing good practice by councils

The Environment Bill

  • The legacy of the COVID-19 pandemic must be that we, as a nation, grasp the opportunity to protect and enhance our natural environment, and tackle the climate emergency. It is vital that we continue to improve air quality, protect against flooding, and ensure our transport, waste and energy policies are environmentally sustainable.
  • The Environment Bill points to a new environmental relationship between local and national government, with potentially greater responsibility sitting with councils. The impact of this is that councils will have a new environmental improvement role within their localities. Local government is well placed to take the lead on this agenda but to deliver on these ambitious plans they will need to have appropriately skilled staff and be given adequate resources.
  • For example, the Bill will introduce a new requirement for councils to increase biodiversity in new developments through the planning system and a system of developer “credits.” We recommend that where sufficient biodiversity cannot be delivered by developers on site, financial “credits” from developers should be retained by councils so that they can deliver areas of biodiversity elsewhere, at locations to be decided by the community.
  • The aspirations of the Environment Bill could be undermined by the Government’s Planning White Paper. The White Paper proposes substantial changes to the planning system and it is unclear at this stage what the implications for the system of biodiversity net gain will be. Government will need to work in a coordinated way to ensure that the system of biodiversity net gain can work in practice in any reformed planning system.

Planning and housing

  • To meet our Net Zero targets, we need stability and certainty in the planning system, supported by appropriate resourcing. Only a locally-led planning system in which councils and the communities they represent have a say over the way places develop will ensure the delivery of high-quality affordable homes with the necessary infrastructure to create sustainable, resilient places.
  • Public participation must be at the heart of the planning system to create sustainable, places that meet the needs of communities for generations to come. We are recommending that the Government ensures that any reform of the planning system does not take further powers away from communities and councils. This will only deprive them of the ability to define the area they live in, and risks giving developers the freedom to ignore the wishes of local communities.
  • Greater investment in and incentives for retrofitting will be vital to accelerate improvements in our existing housing stock and the deployment of low-carbon solutions such as for heating. The LGA supports the Government’s investments so far in scaling up low carbon technologies to decarbonise the existing housing stock, such as the Green Homes Grant and Social Housing Decarbonisation Fund.
  • Savills have provided analysis that shows the cost to councils of achieving net zero carbon emissions from their housing stock is around £1 billion per year over the next 30 years. Further analysis for the LGA found that to achieve net zero by 2050, close to 28 million homes will need to change how they use energy through methods such as zero carbon heating systems.
  • Councils support low carbon technologies such as zero carbon boilers, and are already supporting pioneering energy pilots, for example, to provide customers with gas blended with zero-Carbon hydrogen. We would welcome continued support and leadership from Government to drive decarbonisation of heat in homes and commercial properties at a pace. 
  • Any new policies to increase energy efficiency should also be joined-up across government to address critical issues such as fuel poverty as part of a just transition. Current and previous home energy efficiency schemes have suffered from a delivery model that is remote from local people and based on targets rather than an understanding of local need. Similarly, local authorities only control a limited proportion of the funding available to tackle fuel poverty. The vast majority of funding is delivered through the Energy Company Obligation (ECO) by energy companies with limited local knowledge or interest in meeting locally determined need. The LGA advocates for a local approach that combats fuel poverty, alongside carbon reduction goals.
  • Councils want to work with Government to go further and accelerate progress towards our net zero targets. To do this, Government should enable councils to set energy efficiency standards above the current building regulation standards, covering both new and existing homes, to deliver better quality, sustainable housing.
  • The Government should urgently bring forward its commitment for a £3.8 billion capital Social Housing Decarbonisation Fund, to enable councils to deliver on the shared agenda to decarbonise the existing social housing stock and new homes. At present, only a small amount of funding has been brought forward to fund pilot schemes.

Decarbonising Transport

  • There is a huge variation in transport-related CO2 emissions between local authorities. Likewise, different places have very different options and opportunities available to them to transition to green transport infrastructure. This is due to variations in travel patterns for work, business, tourism and movement across the country, and the transport networks which are available to service the mobility needs of different areas. Local government is therefore well-placed, working with central government, to deliver a blend of measures to achieve net zero transport emissions in every place.
  • To do this, councils crucially need an overarching transport settlement, that provides the ability to control all transport funding at the local level and develop unified sustainable transport plans. Government should consider the implementation of the national infrastructure assessment proposals on capital funding. We are recommending that Government provides councils with guaranteed five-year infrastructure budgets, as long-term pipelines of infrastructure would allow councils to deliver long-term network improvements and deliver ambitious sustainable transport infrastructure.
  • Councils have successfully introduced a range of measures to reduce emissions and tackle air pollution, such as Clean Air Zones, providing electric vehicle charging point infrastructure, promoting cycling and active travel and introducing safe, connected cycle infrastructure. They have also been investing in cleaner bus fleets, introducing borough-wide air pollution monitoring networks, planning for new places in ways that improve air quality, and engaging with businesses to increase awareness and reduce their environmental impact.
  • Recognising the key role that many councils are already playing in catalysing the electric vehicle market, the LGA has produced a guide for councillors on electric vehicle charging infrastructure. We have also published work on the decarbonisation of transport which sets out a framework of actions which local authorities can take today to reduce travel demand, reduce car mode share and accelerate the adoption of electric vehicles.

Green skills

  • Investing in Green Job creation is critical to achieving the UK’s net zero obligations by 2050, and will future-proof the economy by creating high skilled jobs in every community. The LGA analysis in our local green jobs – accelerating a sustainable economic recovery report, shows that nearly 700,000 jobs could be created in England’s low-carbon and renewable energy economy by 2030, rising to more than 1 million by 2050.
  • Nearly half will be in clean electricity generation and providing low-carbon heat for homes and businesses (manufacturing wind turbines, installing solar panels and installing heat pumps). Around 40 per cent of jobs will be involved in installing energy efficiency products, providing low-carbon services, including financial, legal and IT, and producing alternative fuels, such as bioenergy and hydrogen. The remainder will be directly involved in manufacturing low-emission vehicles and the associated infrastructure. Importantly, these jobs are projected to be generated across England’s local authorities and all regions of the country.
  • To meet the existing and future demand for a diverse range of skills and expertise to roll-out clean technologies, we need for an integrated skills system that can quickly and easily align job creation and employability measures, and identify and address skills gaps and shortages.
  • The LGA’s Work Local model provides a framework for an integrated and devolved employment and skills system that is fit for the future. This should be used as a blueprint for skills and employment devolution that works for all people and places. We are calling on the Government to back and fund the trialling of the Work Local model.