Executive summary
Given the urgency of the climate crisis and the critical role of councils in mitigating and adapting to climate change, this guidance focuses on empowering local governments with the necessary resources, regulatory authority, and financial support to drive climate action across key sectors, including housing, energy, and environmental protection.
The report builds on the consensus for place-based approaches that tailors solutions to the unique needs of each community, while aligning local climate efforts with national targets to deliver cohesive, systemic impact.
Key climate commitments and strategic recommendations
The Government’s manifesto includes specific climate commitments, each requiring coordinated national and local action. These commitments include:
- Warm homes plan: Accelerating housing decarbonisation by 2050.
- Energy system reform: Modernising energy infrastructure to support a clean energy transition.
- Clean power by 2030: Expanding renewable energy production and achieving zero-carbon electricity by 2030.
- Protecting nature: Preserving biodiversity and restoring natural habitats.
This report provides targeted recommendations under each commitment area, prioritising sustainable funding, regulatory reform, and local capacity-building.
Warm homes plan: decarbonising housing
To meet the target of decarbonising housing stock by 2050, the report proposes a structured, multiphase retrofit strategy and framework, adaptable to various housing types and tenures. It highlights the need for a tiered approach to address the unique requirements of social housing, private rentals, and owner-occupied properties as follows:
- Social housing: Councils should lead retrofit initiatives for council-owned properties, focusing on energy efficiency upgrades such as loft, wall insulation and low-carbon heating. Partnerships between councils and housing associations are incentivised to scale retrofit programmes.
- Private rental sector (PRS): To enhance compliance from landlords, the report suggests introducing minimum efficiency standards with phased timelines. Landlords would be incentivised through tax rebates and other financial support to improve energy efficiency, helping protect tenants from fuel poverty, with resources and advice supporting council enforcement.
- Owner-occupied homes: Financial mechanisms, such as green mortgages and zero-interest loans, would support retrofits for owner-occupiers. Clear guidance on retrofit benefits alongside incentives should improve uptake.
The framework makes the case for flexibilities so that councils can tailor solutions based on local climate, housing stock, places, infrastructure, supply chains, and available resources to deliver across urban, suburban, rural and coastal communities.
Energy system reform: a decarbonised, equitable grid
Reforming the energy system is essential to achieving net-zero targets, particularly by modernising the power grid and addressing gaps in rural energy access. Key recommendations cover:
- Regional energy strategic plans (RESPs): These plans would coordinate energy infrastructure across regions, balancing and aligning national energy priorities with local needs, growth opportunities, other land-use pressures, and renewable energy potential.
- Community benefit funds (CBFs): All new renewable and energy infrastructure projects should allocate a percentage of costs to CBFs, ensuring local communities benefit directly. Local authorities would engage residents to decide on fund allocation, supporting local decarbonisation projects or public services.
- Business rate reform: The current business rates system should be updated to ensure areas hosting renewable infrastructure receive fair economic benefits, incentivising local renewable development.
Clean power by 2030 and switch on Great British energy
Achieving zero-carbon electricity by 2030 requires rapid expansion of renewable energy infrastructure (generation and distribution), along with local involvement in clean energy planning and ownership. The report recommends:
- Alignment of the local power plan (LPPs) and local area energy plans (LAEPs): This alignment will enable coherent strategies that meet both local and national goals to deliver local energy generation and distribution projects.
- Expanding the heat networks delivery unit (HNDU): Increased funding for HNDU will support councils in developing district heating systems where they are the low cost solution, which are crucial for meeting zero-carbon heating targets.
- Community and municipal co-ownership of energy projects: Councils should facilitate community and/or council investment and co-ownership models, ensuring that residents share the financial benefits of renewable projects.
To encourage long-term community buy-in, frameworks for councils to retain ownership stakes or revenues from energy projects are proposed, providing a steady income stream for reinvestment in local climate initiatives.
Protecting nature: local nature recovery strategies (LNRSs)
The report proposes making LNRSs the primary framework for achieving biodiversity and nature recovery goals. This approach will ensure that local planning and investment contribute to broader environmental objectives. Key actions include:
- Local natural capital investment: Make LNRSs the default strategy through which all public spending on the protection and growth of the natural environment follows.
- Natural capital integration: Growth plans should integrate natural capital assessments, allowing for sustainable development decisions that balance economic and environmental goals, driven nationally by clear policy.
- Increased enforcement funding: Councils require more resources to enforce regulations on biodiversity protection, pollution control, and sustainable land use, ensuring compliance and safeguarding ecosystems.
Cross-cutting issues and strategic enhancements
Recognising that effective climate action requires cohesive policies across sectors, the report addresses several cross-cutting issues essential for successful delivery:
- Unified governance for local climate action: The report underscores the need for a unified national-local governance framework to align, support, advise, and resource local climate action whilst contributing to national nature and climate targets. The development of Local Climate Action Plans would provide councils with a standardised framework while allowing for place-specific customisations. Learning from other models, such as Local Area Agreements, this approach aims to reduce policy fragmentation, streamline oversight, and empower local strategic leadership. The sector is supportive of exploring how new statutory duties in local government can hardwire commitment and collaboration around delivery into national and local government partnership.
- Expanding powers for councils: Councils should have greater power to set climate targets, convene partners, set energy standards, and deliver decarbonisation goals. Legislative amendments could empower councils to mandate higher energy performance standards, facilitate green infrastructure, and bring about more ambitious climate policies.
- Rewire the public funding model to enable private sector investment: To support these efforts, the report calls for multi-year funding allocations that allow councils to plan and deliver long-term climate projects without interruption. Councils should have maximum freedom within which to deliver shared climate goals, with light accountability and progress discussions in line with outcome delivery rather than administration. Funding models could incentivise partnership between authorities and focus on setting the wider conditions to unlock private investment where appropriate.
- Green finance and investment mechanisms: To support sustainable investment, the report proposes establishing a green finance delivery support unit to help councils access green finance, attract private investment, and develop bankable climate projects. Additionally, risk-sharing mechanisms, such as a Green Project Guarantee Scheme, would de-risk investments, encourage private sector participation, and enable councils to deliver large-scale renewable energy and infrastructure projects. The Government should bring together partners and plans into a single strategy for leveraging private finance into local government-led schemes.
- Skills development for a green economy: The transition to a low-carbon economy requires an equipped workforce. The report suggests establishing green jobs taskforces to align the skills system with green sector needs, filling gaps in renewable energy, building retrofits, and sustainable construction, and aligning skills development to the regulatory and policy decisions that will increase skills demand at particular points. Early career guidance, green apprenticeships, and partnerships between educational institutions and industry will ensure a pipeline of skilled workers. It should also explore options for how technology and partnership can reduce workforce demands.
The report’s recommendations provide a framework for aligning national and local efforts, offering councils the tools and autonomy needed to meet climate targets effectively. There are also a wide range of specific suggestions that would help unblock issues. By embedding climate considerations into broader policy objectives, enhancing funding flexibility, and fostering local leadership, the UK can accelerate progress towards its net-zero ambitions.
In conclusion, the strategies proposed empower local governments as essential partners in climate action, leveraging their place-based expertise to implement impactful, sustainable initiatives that contribute meaningfully to the UK’s climate objectives. Through collaborative governance, targeted financial mechanisms, and a skilled workforce, the Government can achieve its climate commitments while delivering economic and social benefits across all regions.
Introduction
Strategic guidance for climate change delivery
The primary objective of this report is to build on both manifesto pledges and the Local Government Association's (LGA) white paper to provide comprehensive and strategic guidance on how to effectively collaborate with local government in achieving climate change goals. This report is designed to equip the new Government with actionable advice that can be implemented now, ensuring swift progress on its climate change policies, schemes, and objectives.
A whole sector approach: Inclusivity and capacity building
The report will focus on creating a 'whole sector' approach that reflects the diverse opportunities, challenges, capacities, levels of engagement, and starting points of local authorities. By acknowledging these variations, the report aims to promote inclusivity and ensure that all councils, regardless of their current position, can contribute meaningfully to climate policy implementation. It will also address key challenges local authorities face, such as limited capacity in critical areas, and provide practical solutions to overcome these barriers.
Short-, medium-, and long-term recommendations for accelerated progress
In addition, the report will offer a balanced mix of short, medium, and long-term recommendations, designed to accelerate the delivery of climate initiatives and improve outcomes. As the new Government introduces broader reforms in areas such as devolution, economic growth, and housing strategies, this report will analyse how these intersect with climate objectives, ensuring policy coherence and maximising synergies across different sectors.
Recommendations for working with local government to deliver key manifesto climate commitments
In this chapter of the report, we will present our proposed recommendations for ensuring the successful delivery of key climate programmes and commitments, as outlined in the government’s manifesto.
The key manifesto commitments we have focused on are:
- warm homes plan
- energy system reform
- clean power by 2030
- switch on Great British energy
- protecting nature.
Warm homes plan
Delivering decarbonised housing by 2050 will require a coordinated, multi-phase strategy that aligns national climate goals with local implementation capabilities. This framework sets out the detailed steps, mechanisms, and governance reforms necessary to support scaled and sustainable retrofit programmes. It prioritises structured funding, capacity building, and enhanced coordination, ensuring that all housing types and geographic areas are covered equitably and efficiently.
This plan outlines a comprehensive approach to improving housing standards, from new builds to existing properties, by implementing key policies and actions across various sectors. Implementing zero carbon building standards will create a level field, eliminating the need for councils to negotiate with the planning inspectorate when aiming to exceed baseline standards, along with eliminating the need for future retrofit. By enabling local authorities to set higher standards and reviewing enforcement processes, the plan as set out below, aims to ensure that both new and existing homes meet elevated energy efficiency and climate resilience criteria. Through these efforts, the government can foster a more sustainable and resilient housing sector, ultimately contributing to broader climate goals and improving living conditions for all households.
Establishing a tiered approach for diverse housing types and tenures
To maximise impact and efficiency, retrofit schemes must reflect the distinct requirements of various housing types (terraced, semi-detached and flats) and tenures (social housing, private rental, and owner-occupied homes).
- Social housing: Put in place long-term arrangements that enable council-led stock improvements, and partnerships with housing associations, to conduct widespread retrofits across portfolios – combining projects into programmes. The approach should include high-priority energy efficiency upgrades, such as wall insulation, low-carbon heating systems, and renewable energy installations, with ongoing evaluation for emissions reductions and resident health outcomes.
- Private rental sector (PRS): To ensure landlord engagement and compliance, introduce targeted incentives like tax rebates and enforce minimum efficiency standards. A phased compliance timeline with landlord support mechanisms will allow gradual improvement, while protecting tenant rights and addressing affordability, tools and resources enabling monitoring and enforcement will be important.
- Owner-occupiers: Encourage uptake through accessible green finance options (zero-interest loans, green mortgages) and clear guidance on the benefits and savings associated with retrofitting. To reach broader adoption by providing step-by-step assistance for households and offer tax relief for certain energy-efficient modifications.
- Geographic adaptations: Each tiered package should be adapted to geographic characteristics such as urban, suburban, rural, and coastal areas to address local climate, housing stock, and resource availability. This approach requires empowering councils to tailor solutions using regional insights, ensuring that each package delivers maximum efficacy and sustainability.
Phased implementation and capacity building for systematic impact
Delivering on this vision by 2050 will necessitate a phased implementation, balancing early action in high-need areas with progressive expansion into all regions. This phased approach should incorporate both immediate interventions and long-term planning.
- Phase one: Immediate action in high-need areas with severe fuel poverty and low energy efficiency ratings, particularly in social housing and low-income rental properties. This phase should involve reviewing the use of funding from existing schemes, such as Energy Company Obligation (ECO4), focusing on core interventions (insulation, low-carbon heating) that bring properties up to an Energy Performance Certificate (EPC) rating of C or above.
- Phase two: Expansion across urban and suburban settings, where the density and type of housing vary. This phase will require significant investment in capacity-building programmes within local councils, empowering them with resources and skills to manage complex retrofits. Developing joint delivery teams for councils with similar needs, particularly in clustered urban settings, can drive efficiency and scale.
- Phase three: By the third phase, the focus should shift to challenging areas , where geographic and logistical barriers may complicate retrofit efforts. Tailored off-grid solutions, increased focus on resilience, and specialised funding streams should be established to address the unique needs of these regions.
Promoting a just transition for vulnerable and low-income communities
Equity must be at the core of retrofit programmes to ensure that vulnerable communities benefit equitably from decarbonisation initiatives.
Equity-based prioritisation
Develop an equity index that assesses vulnerability based on income, energy efficiency, and health risks, allowing councils to prioritise retrofit projects that benefit low-income households and disadvantaged communities. ECO4 eligibility could be expanded to include an equity component, ensuring targeted support for those most in need.
Affordability and energy security protections
Design programmes that mitigate the financial impact on vulnerable residents. For instance, cap rent increases in the PRS after retrofit improvements to prevent displacement and provide low-income households with ongoing access to energy affordability support, especially as energy prices fluctuate. Additionally, offer flexible payment options and low-interest loans for owner-occupiers, ensuring that affordability remains a cornerstone of retrofit funding mechanisms.
Implications for Existing Schemes
To effectively support this new framework, existing schemes like ECO4 will need reforms to better accommodate the scale, specificity, and sustainability goals outlined in this approach.
| Key recommendation | Description |
|---|---|
| Expanding coverage and flexibility in ECO4 | Update ECO4 to encompass a broader range of property types and introduce tenure-specific eligibility criteria. Prioritise retrofit funding for high-need areas, explore devolving proportions of ECO4 to councils more to deliver place-based approaches in addition to ECO4 flex routes to refer households for support. |
| Embedding capacity-building provisions | Mandate that a set percentage of ECO4 funds be allocated for council capacity-building. This provision will help councils recruit and train staff, fostering the technical and administrative expertise necessary for sustained delivery. |
| Integration with the warm homes plan | Integrate ECO4 within the warm homes plan to create a centralised framework that aligns national goals with local implementation. This approach will standardise retrofit quality and outcomes, with ECO4 as a primary funding mechanism under central guidance from the warm homes plan. |
The table below outlines the key components of our recommendation for the proposed warm homes plan for domestic retrofit, outlining mechanisms, responsibilities, and timelines to support council-led retrofits through targeted funding, capacity-building, multi-council partnerships, and tenure-specific strategies.
| Key action | Mechanism | Responsibility | Considerations/barriers | Timeline |
|---|---|---|---|---|
| Establish a national warm homes plan for domestic retrofit, offering a range of options depending on housing type and location |
Develop tailored retrofit packages (sets of measures and solutions) that vary based on property type (terraced homes, semi-detached and flats) and geographic location (urban, sub-urban, rural and coastal). Include options such as energy efficiency packages (insulation, heat pumps, solar PV panels), fuel poverty-targeted solutions to ensure all homes reach EPC rating C or above, tailored options for rural and remote areas (off-grid solutions) and green finance mechanisms (zero-interest loans, grants, green mortgages). National toolkits and data-sharing platforms for councils. Regional consultations and workshops to engage councils. |
Department for Energy Security and Net Zero (DESNZ lead), Ministry of Housing, Communities and Local Government (MHCLG), Department for Business and Trade (DBT), Local Government Association (LGA), councils, devolved administrations, housing associations and registered social landlords.
|
Coordination of housing needs across different councils and regions. Lack of technical skills in certain councils. Addressing diverse housing types and needs in different regions. |
Immediate: Design and consultations for warm homes plan (year one). Medium-term: Pilot regional projects to test housing solutions (years two to three).
|
| Offer a menu of options to councils, including funding allocations tied to outcome frameworks, capacity-building revenue and technical support |
Provide councils with a flexible menu of funding options based on their needs, including core retrofit funding (based on number of homes retrofitted and CO2 savings), capacity-building revenue for staff training and expertise, technical assistance grants for complex retrofits, outcome-based incentives for performance on energy savings, carbon reduction, and fuel poverty alleviation.
Periodic performance evaluation and adjustment of funding. |
Department for Energy Security and Net Zero (DESNZ lead), Ministry of Housing, Communities and Local Government (MHCLG), Department for Business and Trade (DBT), Local Government Association (LGA), councils, devolved administrations, housing associations, and registered social landlords.
|
Ensuring funding reaches areas with the highest need. Risk of inconsistent results without proper monitoring and outcome frameworks. |
Immediate: Develop the outcome-based framework and funding menu (year one).
|
| Provide funding for council partnerships, where multiple councils work together to deliver retrofit programmes, especially in areas with lower capacity |
Create funding streams for joint council partnerships, pooling resources and expertise. Develop shared retrofit delivery teams to combine technical capacity. Encourage joint funding arrangements for clustered retrofit projects, particularly in rural or low-capacity regions. Regional capacity-building programmes for shared training and resource sharing. Focus funding initiatives on comprehensive whole-house retrofits rather than short-term solutions to achieve lasting energy efficiency and decarbonisation. Integrate heating improvements as a core component of funds like the social housing decarbonisation fund, ensuring that retrofits address both structural efficiency and sustainable heating solutions. |
Department for Energy Security and Net Zero (DESNZ lead), Department for Business and Trade (DBT), Ministry of Housing, Communities and Local Government (MHCLG), Local Government Association (LGA), councils, devolved administrations, housing associations and registered social landlords. |
Challenges in managing multi-council collaboration. Capacity limitations in rural councils or those with low resources. |
Immediate: Encourage partnerships via regional meetings and consultations (year one).
|
| Develop tenure-specific retrofit plans to address unique needs of social housing, private rental, and owner-occupied homes |
Create targeted retrofit approaches based on housing tenure, recognising that social housing (council-owned stock), private rented sector (PRS), and owner-occupied homes each have distinct requirements and challenges. For the private rented sector, implement landlord incentives, minimum efficiency standards, and tenant protections to encourage retrofits.
Build regional strategies that leverage tenure-specific data to support retrofit prioritisation. Launch awareness campaigns for each tenure type to inform and engage stakeholders on retrofit benefits and options. |
Department for Energy Security and Net Zero (DESNZ lead), Department for Business and Trade (DBT), Ministry of Housing, Communities and Local Government (MHCLG), Local Government Association (LGA), councils, devolved administrations, housing associations, registered social landlords, private landlords and financial institutions. |
Variations in tenure-based needs create complexities in designing uniform solutions. Private rented sectors may have compliance challenges due to landlord resistance. Ensuring financial support and incentives are accessible across different tenure types. |
Framework developed by year two , with targeted rollouts by tenure type in years three to six. |
The table below outlines key objectives and actions designed to enhance energy efficiency, sustainability, and resilience in the UK's built environment. With a focus on improving standards for new builds, empowering local authorities through planning legislation, strengthening enforcement in the private rented sector (PRS), and facilitating access to financial support, these measures aim to accelerate progress towards achieving net-zero carbon emissions by 2050.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Improve standards for new builds |
Update building regulations to require higher, net-zero compliant, energy efficiency standards, focusing on insulation, ventilation, and heating systems. Expand regulations to include climate adaptation measures (passive cooling, green roofs, heat-resilient and flood-resilient designs). |
Amendments to Building Regulations via statutory instruments. The Future Homes and Buildings Standard is an essential component of the UK's roadmap to achieving net-zero carbon emissions by 2050. However, there is an urgent need to accelerate its implementation and strengthen its measures to ensure buildings of the future are truly sustainable and resilient., and to align the new standards with wider energy system reforms |
Ministry of Housing, Communities and Local Government (MHCLG lead), councils and building control inspectors. |
Potential resistance from developers citing costs; need for detailed sector consultation.
This should be mitigated through a central government research project on the actual cost increases and a mandated approach for viability assessments. (council projects indicate that building to these higher standards has minimal additional costs) |
Immediate: Consultation and drafting (year one).
|
| Allow councils to impose higher standards through planning |
Amend the town and country planning act to give councils powers to mandate higher energy performance standards for new developments.
|
Legislative amendments to Planning Act, inclusion in local plans and neighbourhood plans. Enable councils to expedite permissions for developments that meet higher environmental standards. Establish streamlined approval processes for net-zero developments, allowing councils to prioritise projects with strong environmental performance, reducing bureaucratic delays for sustainable initiatives. |
Ministry of Housing, Communities and Local Government (MHCLG lead), local planning authorities (LPAs) and Local Government Association (LGA). |
Local variation could cause discrepancies in standards across regions, creating uncertainty for developers.
Urgent improvements to Building Regulations would be a preferred approach – but retaining the ability for local tailoring in planning if there are specific local resilience measures that need to be addressed. |
Immediate: Consultation (year one).
As an urgent measure a ministerial statement allowing local variations and making building energy efficiency standards a material planning consideration could provide interim relief. |
| Review arrangements for enforcement and licensing in the private rented sector (PRS) |
Conduct a review of current enforcement processes and the Energy Performance Certificate (EPC) system.
Explore introducing a mandatory licensing scheme for landlords based on energy efficiency standards.
|
Commission independent review of PRS enforcement. The Renters Reform Bill should include provisions that support landlords in retrofitting properties, recognising that tenants benefit from improved energy efficiency.
|
Ministry of Housing, Communities and Local Government (MHCLG lead), Department for Energy Security and Net Zero (DESNZ), Department for Business and Trade (DBT), councils, Local Government Association (LGA) and Housing Ombudsman. |
Requires additional funding for capacity building in councils.
Potential to shrink the private rented sector which could exacerbate short term homelessness. Potentially this could be resolved through a reverse right to buy back enabling compulsory purchase order (CPO) of substandard accommodation and providing a central fund for urgent acquisition and retrofit of these properties. |
Short-term: Review findings and action plan (years one to two).
|
| Facilitate grants and low-interest loans |
Engage with councils and housing associations to co-develop and implement grant/loan schemes for retrofit. Provide training to local government on managing grant/loan systems. Create local outreach programmes to ensure low-income households are aware of financial assistance available. |
Establish a task force to co-design grant and loan systems.
|
Ministry of Housing, Communities and Local Government (MHCLG lead), Department for Business and Trade (DBT), HM Treasury, councils, Local Government Association (LGA), financial institutions and third sector organisations. |
Ensuring all areas, especially deprived ones, can access resources fairly.
Whilst councils are keen to assist in this space in identifying need, they will not have financial capacity to take risk or underwrite any schemes where repayments are not recoverable from customers/third parties. |
Immediate: stakeholder engagement and scheme design (year one).
|
Additional considerations
- Capacity building in local government: Ongoing investment in local government skills and capacity to support retrofitting and energy efficiency programmes, including funding for staffing and training.
- Public engagement and outreach: Raising public awareness of the available schemes, grants, and benefits of home energy upgrades, especially in the private sector.
- Green finance initiatives: Encouraging private sector involvement through green loans, mortgage schemes, and other financial products designed to facilitate energy-efficient home purchases or upgrades.
Broader policy initiatives to encourage the market
- Green building accreditation: Introduce or expand national green building certification that awards homeowners and developers for high energy performance homes.
- Energy-efficient property valuations: Work with the Royal Institution of Chartered Surveyors, estate agents and mortgage lenders to ensure energy efficiency improvements are reflected in property values, offering a financial incentive for upgrades. Government should also explore other market-driven incentives to encourage behavioural change. For instance, introducing green mortgages that offer preferential rates for energy-efficient homes, or tax relief for retrofitting properties to improve energy performance, could serve as additional levers. Other potential measures might include expanding access to low-interest loans for energy-saving home improvements or implementing a carbon pricing mechanism for residential energy consumption.
- Energy tariff adjustments: Potential to explore options for discounted energy tariffs for properties achieving high energy efficiency standards, providing ongoing incentives for homeowners.
Energy system reform
This framework lays out how the new government can reform energy systems while ensuring that both large and small-scale infrastructure developments directly benefit local communities and contribute to national decarbonisation efforts. The integration of a regional energy strategic plan (RESP) ensures alignment across regions while supporting local goals.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Large-scale infrastructure development with mandated community benefit fund |
Mandate the establishment of a community benefit fund (CBF) for all renewable energy and energy infrastructure projects, covering both large and small-scale developments. Define a minimum percentage of project costs that must be allocated to the CBF, in addition to energy bill reductions for local communities. |
Legislate the requirement for developers of renewable infrastructure to provide community benefit contributions. Establish local community boards to govern the allocation of funds. Exempt community-owned renewable energy schemes from CBF mandates, where profits are reinvested in local areas. Encourage community companies to demonstrate how reinvested profits benefit local decarbonisation and development efforts.
|
Department for Energy Security and Net Zero (DESNZ lead), councils, energy developers and community groups. |
Managing the balance between ensuring significant contributions from developers without deterring investment. Complexity in determining what portion of benefits should go direct to residents through bill reductions vs wider community benefit funds. Ensuring funds are distributed equitably across communities. |
Immediate: Policy development and consultations (year one).
|
| Continue including small-scale projects in community benefit scope |
Expand the mandate for community benefit funds to cover small-scale renewable energy projects (solar farms and wind turbines) under a certain megawatt threshold.
|
Legislation to define thresholds for community benefit funds and their application to smaller projects.
|
Department for Energy Security and Net Zero (DESNZ lead), councils, small-scale developers and community groups. |
Small-scale developers may argue that excessive CBF requirements could reduce profitability. |
Short-term: policy drafting and stakeholder engagement (years one to two).
|
| Reform business rates for renewable energy | Reform the current system of business rates collection for renewable energy, which is based on the point of grid connection, to better reflect where infrastructure (wind farms and solar panels) is physically located. |
Revise the Non-Domestic Rating system through primary legislation to account for energy infrastructure location.
|
HM Treasury (lead), Department for Energy Security and Net Zero (DESNZ), Local Government Association (LGA), National Grid and councils. |
Resistance from energy companies due to possible higher tax burdens- though this concern is mitigated if the overall quantum of costs and financial obligations remains unchanged.
There may be a need to work through a rebalancing with councils already in receipt of payments. |
Immediate: consultation on rates reform (year one).
|
| Strategic use of community benefits for local decarbonisation and environmental projects |
Provide guidance to councils and developers on how to strategically use community benefit funds for long-term decarbonisation, flood alleviation, and other climate adaptation projects.
|
Develop best practice guidelines for the use of CBFs in decarbonisation and resilience projects. Facilitate partnerships between LAs, community organisations, and the private sector for pooling resources and delivering larger projects. Create reporting mechanisms for LAs to demonstrate impact and outcomes of CBF investments. |
Department for Energy Security and Net Zero (DESNZ lead), councils, energy developers, community boards and environmental organisations. |
Ensuring long-term planning and investment rather than short-term benefits.
|
Immediate: development of guidelines and frameworks (years on to two).
|
| Regional energy strategic plan (RESP) integration |
Develop and implement a RESPs to coordinate energy infrastructure across regions, ensuring alignment with local renewable projects and decarbonisation targets.
Embed community benefit contributions within RESP as part of the strategic planning process. Ensure National Energy System Operator (NESO) engage councils meaningfully in the development of the Strategic Spatial Energy Plan (SSEP). |
Develop regional plans in collaboration with devolved governments, councils, and regional energy bodies.
The RESPs should serve as the foundation for the SSEP.
|
Department for Energy Security and Net Zero (DESNZ lead), devolved governments, local and regional energy bodies, Local Government Association (LGA), National Grid and National Energy System Operator (NESO). |
Coordination across regions requires collaboration and agreement between multiple layers of government and private developers.
|
Short-term: stakeholder engagement and regional consultation (years one to two).
|
| Recovery of councils' costs for NSIP applications |
Ensure councils can fully recover costs incurred in responding to Nationally Significant Infrastructure Project (NSIP) applications.
Ensure Planning Advisory Service (PAS) has the resources required to support councils with NSIPs. |
Introduce legislation to either increase fees for NSIP applications or mandate Planning Performance Agreements.
|
Department for Energy Security and Net Zero (DESNZ lead), councils, Ministry of Housing, Communities and Local Government (MHCLG), and developers. |
Balancing increased fees with the need to not deter investment. Ensuring that the mandated Planning Performance Agreement is standardised and enforceable across all councils. Addressing potential opposition from developers concerned about increased costs. |
Immediate: policy consultations on cost recovery mechanisms (years one to two).
|
Additional Considerations
- Engaging local communities: Ensure meaningful community involvement in deciding how community benefit funds are spent. This can include local consultations, participatory budgeting, and transparent reporting mechanisms.
- Capacity building for councils: Many local councils will require additional capacity to manage community benefit funds and strategic planning processes. Providing training and resources to build councils' capability inside and outside of the local planning authority is crucial.
- Long-term funding mechanisms: Encourage long-term investment in local infrastructure using community benefit funds, with a focus on sustainability and resilience, such as renewable energy generation, energy storage solutions, flood defences, and energy-efficient housing upgrades.
- Coordination with national grid and energy networks: National infrastructure bodies must be engaged to ensure reforms to business rates and RESP are aligned with grid capacity, regional energy demand, and renewable energy targets.
Grid capacity is one of most significant barriers to the rapid development of renewable energy infrastructure.Many renewable energy projects face long delays, with some being asked to wait up to 15 years for grid connection. These delays severely hamper the UK's ability to meet its renewable energy targets and decarbonisation goals. The current grid infrastructure is struggling to keep up with the rapid increase in renewable energy generation, especially in regions with high renewable potential but limited grid capacity.
This issue raises the question of whether there is a fundamental market failure within the current privatised system of grid ownership and management. The privatisation of grid infrastructure has led to a fragmented system in which upgrades and expansions may not be prioritised or efficiently coordinated to meet the growing demand for renewable energy. This system could potentially inhibit progress toward national net-zero targets and regional energy needs.
Given the long-term nature of these delays, it seems prudent to consider whether reforms are necessary, including the possibility of revisiting the ownership and regulatory framework governing grid infrastructure. This could include exploring new models of ownership, increased public-sector involvement, or stronger regulation to incentivise faster grid expansion. Local smart grids utilising community energy projects have the potential to maximise the efficient use of energy, reduce demand on the local electricity grid network and build resilience. Government should remove the regulatory and grid-connection barriers to allow community projects to sell their energy to their local communities. Addressing this issue will be critical to ensuring that renewable energy developments can proceed at the pace required to meet both local and national energy and decarbonisation goals.
Electric vehicle (EV) and transport infrastructure
Insufficient EV charging points and underdeveloped power grids, especially in rural areas, are significant issues. A comprehensive EV charging network should be developed, and regulatory barriers to improve connectivity in underserved areas should be removed. Investment in EV charging infrastructure and power grids should begin immediately, with network and grid expansion to follow over the next 2-3 years.
In the last year alone, there have been over 30,000 new public electric vehicle charge-points installed. This rate of installations must continue to accelerate in the coming years to meet the UK Government's target of installing 300,000 charge-points by 2030. Preventing this acceleration in growth are regulatory barriers such as the grid connections, street works permitting, and planning permission processes. These barriers need to be removed to facilitate ongoing investment in the growth of the UK's public EV charging network. Accordingly, with these barriers removed, it must also be considered how to better set EV charging infrastructure targets to ensure that, in delivering 300,000 charge-points, the needs of all UK motorists - including those in rural and deprived areas, where the business model for public EV charging is less viable now, are met. Therefore, it would be helpful to include specific geographic or coverage targets, rather than focusing solely on numerical goals regarding charge-points.
The electrification of local government vehicle fleet is a key opportunity to lower emissions, reduce running costs and support the UK electric vehicle automotive industry. Local Government should also be included with the 2027 public sector fleet decarbonisation target to speed up the transition support needed to enable the public sector to develop outline and full business cases and to provide guidance on the most operational and cost-effective methods of providing charging infrastructure in council depots. Collaborative procurement of electric vehicles by local authorities and public sector bodies, as demonstrated in Wales, is also recommended to achieve cost efficiency, streamline processes, and support aligned transitions to electric fleets in pursuit of net zero goals.
Broader policy initiatives
- Green bonds for community projects: Introduce green bonds or other financial products that allow communities to invest in local renewable energy and decarbonisation projects. These bonds could be backed by community benefit funds and provide a revenue stream for both councils and residents.
- Incentivising private sector participation: Encourage private sector participation in local decarbonisation initiatives through tax incentives or matching funding for private developers that contribute to community projects like flood alleviation or public transport decarbonisation.
Clean power by 2030/switch on Great British energy
Urgent action is required to increase renewable energy generation and to upgrade, reinforce, or expand transmission and distribution grid infrastructure to support this growth. A strategic approach to local power planning through Great British Energy is welcome, however clarity of what these plans are and how they fit with heat network zoning and Local Area Energy Plans needs urgent clarity. Consideration should be given to how the various plans interface with one another, how they integrate with the planning system, and what delivery mechanisms will be.
The new government is very clear on the need for significant additional energy infrastructure to drive down bills and improve our energy security. Whilst there is broad support for this, there is also a clear need to ensure that effected local communities are not left at a disadvantage. We note the government’s current preference for this to be accommodated through discounted bills, but would urge that consideration is also given to mandated cashable benefits for local areas which can be used to address wider issues such as flooding, domestic retrofit etc. Depending on how money off bills is structured this can be a significant benefit to the scheme owners and would restrict consumer choice if those in the area are to benefit.
There is also a question as to whether democratic accountability will be introduced at all necessary levels of energy infrastructure planning and how this fits within the role of a Local Planning Authority (LPA). Ensuring democratic oversight at each stage of energy planning will be essential to support public trust, align with local priorities, and foster community engagement in the transition to sustainable energy systems.
Furthermore, energy efficiency should be recognised as the most cost-effective means of enhancing energy security. By reducing energy demand, we decrease our reliance on external sources and help minimise long-term costs, ultimately strengthening our energy resilience.
The tables below outline the specific actions, mechanisms, and considerations for delivering on the Clean Power by 2030 and Switching on Great British Energy manifesto commitments. The focus is on local authority involvement in energy planning, development finance, public sector support, and removing barriers to local energy projects. This framework supports a whole-systems approach to clean energy development, focusing on public sector leadership, community engagement, and financial and technical support.
Clean Power by 2030
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Interface between local power plans (LPPs) and local area energy plans (LAEPs) |
Clarify the relationship and synergies between LPPs and LAEPs to ensure they complement each other and do not duplicate efforts. Develop guidance on how LPPs (focused on council power generation projects) and LAEPs (focused on broader energy systems) can interface effectively to align local, regional, and national decarbonisation goals. Ensure that both LPPs and LAEPs are integrated into broader energy strategies, including the Regional Energy Strategic Plans (RESPs), SSEPs, and Local Growth Plans. Fund councils to undertake LAEPs. |
Create a national framework for integrating LPPs and LAEPs.
Funding and resources provided to councils should be non-competitive. |
Department for Energy Security and Net Zero (DESNZ lead), councils, local net-zero hubs, national grid, energy Systems catapult, National Energy System Operator (NESO) and Great British Energy (GBE). |
Risk of confusion between different plans and responsibilities, leading to inefficiencies. Variability in local capacity to develop both types of plans effectively. Coordination across local, regional, and national energy strategies is essential.
Standardised and affordable plan production using central data sources which provide consistent information and formatting for plan production |
Short-term: Develop guidance and frameworks (year one to two).
|
| Improve the heat networks delivery unit (HNDU) funding regime and capacity |
Expand the funding and capacity of the HNDU to meet the growing demand from councils for support in delivering district heating and heat networks.
Increase councils funding for feasibility studies, design, and project delivery of heat networks. |
Increase HNDU funding through a dedicated government budget.
|
Department for Energy Security and Net Zero (DESNZ lead), heat networks delivery unit (HNDU), councils, and private sector heat network developers. |
Expanding capacity may require additional staff and expertise. Heat network projects are complex and capital-intensive, so councils may require additional project management skills. |
Immediate: Boost HNDU funding and capacity (year one).
|
Switch on Great British Energy
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Develop public sector development capacity |
Provide access to development finance, higher-level skilled support, and standardised contracts to enable public sector energy projects to scale.
Offer training programmes, mentoring and trouble shooting to upskill public sector staff in renewable energy project development and management. |
Establish a government-backed energy development fund and technical support unit.
|
Department for Energy Security and Net Zero (DESNZ lead), councils, Great British Energy (GBE), Local Government Association (LGA), local net-zero hubs, and development finance institutions. |
Ensuring adequate financial support to enable long-term public sector energy projects. Councils may need ongoing support beyond initial financing and guidance. |
Short-term: Establish development hub and finance facility (years one to two).
|
| Role of councils in community engagement and long-term ownership |
Encourage councils to play a central role in community engagement for energy projects, ensuring local buy-in and support.
Promote models for community co-ownership of projects, where local residents can invest in and benefit from renewable energy schemes. |
Establish clear guidelines for community engagement in all publicly led energy projects. Develop financial models where councils and communities share ownership and returns from renewable energy investments. Learning from shared ownership projects that have been developing in Wales as a consequence of the Welsh Government shared ownership policy. |
Department for Energy Security and Net Zero (DESNZ lead), councils, Great British Energy (GBE), local communities, and community energy groups. |
Community engagement processes may be time-intensive and require specialist skills. Councils may need legal and financial support to structure co-ownership arrangements. |
Short-term: Develop engagement and ownership models (year one).
|
| Facilitate easier private wire connections through compulsory purchase orders (CPO) powers |
Improve compulsory purchase order (CPO) powers for councils to acquire land and easements for private wire connections (similar to heat network powers). Streamline the process for councils to implement private wire connections between renewable energy projects and nearby users (public buildings and local industry). |
Amend existing legislation to extend CPO powers to cover private wire connections.
|
Department for Energy Security and Net Zero (DESNZ lead), councils, national grid, National Energy System Operator (NESO), Distribution Network Operators (DNOs), Distribution System Operators (DSOs), and energy developers. |
Extending CPO powers may face legal challenges from landowners, as they would reduce the scope for ransom payments and could be detrimental to hope values, therefore, they will likely require primary legislation.
|
Medium-term: Review legislation and amend CPO powers (years one to three).
|
| Review supply licence exemptions for community and public sector projects |
Review existing supply licence exemptions to make it easier for councils and community groups to operate energy projects without needing a full supply licence.
|
Undertake a consultation on supply licence exemptions, focusing on community energy and public sector schemes.
|
Department for Energy Security and Net Zero (DESNZ lead), Ofgem, councils, and community energy groups. |
Striking the right balance between reducing regulatory burdens and ensuring consumer protection. Avoiding loopholes that could be exploited by commercial operators. |
Short-term: Consultation on supply licence exemptions (year one).
|
| Remove barriers to councils supplying private wire power to other public sector bodies |
Remove legal and regulatory barriers preventing councils from supplying power through private wire connections to other public sector bodies (schools and hospitals). Amend procurement and accounting rules to allow councils to sell energy directly to public sector entities, avoiding complex and time-consuming processes. |
Amend procurement regulations and accounting standards to facilitate direct energy sales between councils and public sector bodies.
|
HM Treasury (lead), Department for Energy Security and Net Zero (DESNZ), Ofgem, councils, and public sector bodies including the NHS and schools. |
Current procurement regulations may be complex and time-consuming for energy transactions.
|
Medium-term: Review and amend procurement/accounting rules (years one to three).
|
Additional considerations
- Local power plans and local area energy plans alignment: There must be a clear interface between Local Power Plans (LPPs) and Local Area Energy Plans (LAEPs) to prevent duplication of efforts and ensure both are aligned with regional and national energy strategies, such as the Regional Energy Strategic Plan (RESP). Implement a standardised framework for local authorities to use, ensuring a level playing field and providing streamlined inputs for RESPs.
- Finance and capacity building: The development of public sector energy projects requires both technical capacity and development finance. Access to low-interest loans, grants, and technical assistance should be streamlined to enable local authorities to lead in renewable energy development and retain long-term ownership of projects.
- Private wire networks: Improving access to private wire connections (direct energy supply from generators to users) is crucial for the growth of local energy projects. Extending CPO powers and simplifying licensing requirements will enable local authorities to develop energy systems that directly benefit local communities and public sector entities.
- Community ownership: Encouraging community ownership and co-investment models can provide residents with a stake in renewable energy projects, ensuring local benefits are retained and shared. As community ownership brings benefits over and above the mere economics, such as community development and psycho-social benefits.
Broader policy initiatives
- Green development finance: Establish a Green Development Fund to finance local authority-led energy projects, offering low-interest loans and grants to public sector entities. This would provide long-term funding to enable the public sector to develop and retain ownership of renewable energy projects.
- Local energy hubs: Strengthen the role of Local Energy Hubs (existing Net Zero Hubs) in providing technical and financial support to local authorities for renewable energy projects, including developing templates for Power Purchase Agreements and other contractual frameworks.
Protecting nature
The reform of the National Planning Policy Framework (NPPF), alongside the need to deliver 1.5 million homes and energy infrastructure, can align with nature protection goals. However, there are risks to biodiversity and ecosystems if these objectives are pursued without careful planning and consideration of environmental impacts.
This framework highlights the importance of a place-based approach, with Local Nature Recovery Strategies (LNRSs) being the cornerstone of nature protection and recovery efforts. It integrates environmental funding mechanisms such as Environment Land Management Schemes (ELMS), encourages local leadership, and aligns with the Government’s broader climate and environmental goals.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Establish Local Nature Recovery Strategies (LNRSs) as the building blocks for nature recovery |
Make Local Nature Recovery Strategies (LNRSs) the foundational framework for nature recovery, ensuring they shape all investments into coherent, long-term delivery plans.
Ensure LNRSs guide and coordinate investments and delivery plans without necessarily being responsible for all implementation efforts. |
Amend legislation to establish LNRSs as central to environmental planning and investment. Provide direct, long-term funding to support LNRSs’ leadership role. Develop national guidelines to standardise LNRSs’ role in coordinating nature recovery projects. |
Department for Environment Food and Rural Affairs
|
Ensuring sufficient and continuous funding to support LNRS leadership. Balancing LNRSs’ strategic role with the need for effective local delivery partners. Coordination across sectors and stakeholders to ensure LNRSs align with other environmental and development goals. |
Immediate: Establish funding framework and update legislation (year one).
|
| Integrate natural capital into growth plans |
Embed natural capital assessments into local and regional growth plans, and devolution plans, ensuring that growth is balanced with environmental sustainability. Develop tools and guidance for councils to measure natural capital and its benefits (carbon sequestration, flood management and biodiversity gains). |
Require natural capital assessments in local development plans and planning applications.
|
Department for Environment Food and Rural Affairs (DEFRA lead), Ministry of Housing, Communities and Local Government (MHCLG), HM Treasury, councils, Natural England, and Local Nature Partnerships (LNPs). |
Lack of expertise in natural capital valuation at the local level. Balancing economic growth with environmental protection may generate tensions between stakeholders. |
Short-term: Develop tools and guidance (year one).
|
| Fund more enforcement for local environmental management |
Increase funding for enforcement of local environmental regulations, ensuring robust management of local biodiversity, pollution, and land use. Ensure enforcement focuses on habitat protection, pollution prevention, and sustainable land use. |
Allocate new enforcement funding, with clear guidance on the roles of councils and the environmental authorities.
|
Department for Environment Food and Rural Affairs (DEFRA lead), environmental authorities (EAs), and councils. |
Ensuring sufficient funding for ongoing enforcement activities. Overlap between responsibilities of the environmental authorities and councils may create inefficiencies.
|
Immediate: Increase enforcement funding (year one).
|
| Address nutrients and agricultural practices through regulation |
Strengthen regulations on agricultural practices to reduce nutrient runoff, focusing on sustainable land management and preventing environmental degradation (water pollution and biodiversity loss).
|
Strengthen environmental regulations through amendments to the Agriculture Act or Environment Act.
|
Department for Environment Food and Rural Affairs (DEFRA lead), councils, environmental authorities, farmers, agricultural groups, and Natural England. |
Ensuring buy-in from farmers who may view new regulations as burdensome. Funding for monitoring and enforcement of nutrient management regulations. Balancing food production needs with environmental protection. |
Immediate: Strengthen regulations and align ELMS incentives (years one to two).
|
Additional considerations
- Place-based approach using local nature recovery strategies (LNRSs): LNRSs should become the central framework for delivering nature protection and recovery across local areas. This would enable a place-based approach to funding, aligning all local environmental efforts with the government's biodiversity and nature recovery goals. LNRSs can also integrate funding from Environmental Land Management Schemes (ELMS) and community programmes into a cohesive strategy.
- Collaboration with local communities: Community engagement will be critical for the success of river walks, national forests, and nature recovery projects. Local authorities should establish community advisory boards to ensure local input and ownership of nature-based solutions, such as natural capital integration and river restoration.
- Capacity building for councils: Many LAs will need significant capacity-building to deliver these nature-based projects effectively. Training programmes and funding will be required to upskill local planners, environmental officers, and enforcement teams.
Broader policy initiatives
- Biodiversity offsetting: Introduce a biodiversity offsetting framework, that goes beyond existing biodiversity net gain (BNG) requirements, where developers must compensate for the environmental impact of their projects by funding nature recovery initiatives. This could fund local biodiversity programmes, habitat restoration, or contributions to LNRS priorities.
- Sustainable agriculture initiatives: Develop a framework for sustainable agriculture partnerships between farmers, local authorities, and environmental agencies, aimed at reducing nutrient runoff, enhancing soil health, and promoting biodiversity through better land management practices.
Cross-cutting issues: challenges and opportunities for climate programme delivery
The following section delves into the cross-cutting issues that have been considered and addressed throughout our analysis. These issues, which span multiple sectors and policy areas, are critical to the successful implementation of the government’s climate programmes and commitments. By examining key factors such as financing mechanisms, regulatory frameworks, skills and workforce development, and the role of public-private partnerships, we ensure that our recommendations take a holistic approach. This section explores how these interconnected challenges and opportunities must be managed collaboratively to achieve lasting, sustainable impact across all levels of government and society.
Local-national relationship
Unified governance for local climate action
A consistent and singular governance arrangement should be established to manage climate-related issues across all councils. Building on the idea of local climate action agreements underpinned by multi-year place-based funding allocations, this unified framework—referred to as Local Climate Action Plans—would allow for customised climate goals per council while ensuring alignment with national objectives. Each council would develop and execute a place-specific climate action plan, but all plans would operate under a standardised national-local governance process, streamlining oversight and fostering accountability.
Central government could leverage the renewed interest in frameworks like Local Area Agreements (LAAs) and Local Strategic Partnerships (LSPs) to facilitate these Local Climate Action Plans. By doing so, government would encourage councils to collaborate regionally while remaining accountable to national climate goals. This approach would strengthen local accountability, reduce policy fragmentation, and enhance the effectiveness of climate action across regions.
Enabling partnership working: Holistic and systemic approaches to climate action
There is a challenge with the misalignment between national policies and local needs, leading to fragmented governance. To address this, climate action should be embedded into broader national policies. This involves promoting systemic policy approaches and establishing long-term frameworks that support local delivery. Central government should integrate climate goals into national planning frameworks, encourage collaborative policy development, and create a comprehensive national-local climate action framework.
Clear and consistent messaging from central government should be provided, which can then be tailored and reinforced at a local level, this is essential to ensure cohesive communication, enhance public understanding, and drive coordinated action across all regions.
This could be achieved with the establishment of a central body to take ownership and drive the Net Zero agenda across departments, ensuring it doesn’t get side lined among various stakeholders, such as a Local Climate Action Delivery Unit which would coordinate priorities between national and local governments, clarify roles and responsibilities, offer guidance, and assess performance to maintain accountability and progress.
Central government responsibilities: Structured climate action frameworks
A significant issue is the lack of structured enforcement for climate policies across regions. To overcome this, enforceable climate action frameworks should be adopted, like regulations for seat belts or smoking bans. Place-based approaches should be established, with a focus on outcome-based measurements for success.
This framework would set clear, binding standards for reducing emissions, transitioning to sustainable practices, and adopting cleaner technologies, making it enforceable through penalties, incentives, or compliance checks. Enforceable frameworks can lead to more decisive regulatory actions, such as phasing out certain technologies or materials with high carbon footprints (like coal-based energy or single-use plastics) and mandating the use of more sustainable alternatives (like renewable energy sources or reusable or recyclable materials).
The link to place-based approaches lies in the tailored application of these enforceable frameworks to specific regions, considering their unique resources, vulnerabilities, and socio-economic contexts. For instance, an enforceable framework in a coastal city might prioritise flood defences and renewable energy transition, while an agricultural region might focus on sustainable land use practices and water conservation. This place-based application supports outcome-based measurements for success, assessing how well specific regulations work within different environments and adjusting as needed for regional effectiveness. By combining enforceable policies with localised strategies, governments can address both broad climate goals and the unique needs of specific communities.
Expanding powers: council empowerment
Councils currently have restricted powers to set energy performance standards and develop ambitious climate goals. To empower local governments, greater autonomy should be granted to manage decarbonisation efforts, balancing central and local governance roles. Legislative amendments are needed to expand local authorities’ powers, define clear roles, and create guidelines for balancing governance responsibilities.
Funding and resource allocation: flexibility and adequacy
The inflexible and short-term nature of current funding mechanisms hinders climate projects. To improve this, funding mechanisms should be adaptable and aligned with local priorities. Single pot multi-year funding solutions, with the ability to prioritise locally, should be developed to ensure sustained support for climate action, potentially (but not exclusively) as part of new devolution deals.
Place leadership and convening power
Local governments should be empowered to take a leadership role in place-based climate action, acting as conveners to bring together businesses, community groups, and other anchor institutions. This convening power would enable local authorities to align local stakeholders around shared climate goals, facilitating cross-sector collaboration that advances decarbonisation, sustainable land use, and resilient infrastructure. By leveraging their position, local authorities can drive systemic change at the community level, creating a more unified approach to addressing climate challenges.
Adaptation and resilience: adapting infrastructure to climate change
Vulnerability to climate impacts, such as floods and extreme weather events, necessitates increased investment in flood management, infrastructure resilience, and long-term adaptation measures. We are aware of Environment Agency (EA) requirements in relation to permitting of infrastructure, in that LAs are required to submit risk assessments and integrate climate change adaptation into their management systems, but these should be followed up with investment.
Councils would also like to see improved arrangements for the governance and management of local drainage to manage costs and prioritise flood alleviation. They should be provided with improved governance and management frameworks for local drainage systems to better control costs and prioritise flood alleviation measures. This could include clearer responsibilities, dedicated funding, and enhanced collaboration between agencies to ensure more effective management and quicker response to flood risks.
Enabling Community Engagement: Building Local Ownership of Climate Goals
For climate initiatives to succeed, they must be embedded within the community. Local governments should be enabled with resources and frameworks to actively engage communities in setting and achieving climate goals. This includes fostering public awareness, providing platforms for public input, and supporting community-led projects that align with regional climate objectives. Community engagement empowers residents, builds local ownership of climate actions, and ensures that initiatives are responsive to the unique needs and priorities of each council
Climate leadership
The table below serves as a foundation for understanding how these components interconnect to support successful climate action at the local level.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Partnership working: clear frameworks and strategy from central government |
Develop a national climate leadership strategy that outlines the roles and responsibilities of central government, councils, and regional bodies.
|
Create a national framework for partnership between central government and councils.
|
Department for Energy Security and Net Zero (DESNZ lead), Department for Environment, Ministry of Housing, Communities and Local Government (MHCLG), Department for Transport (DfT), HM Treasury, Department for Environment, Food and Rural Affairs (DEFRA), LGA, and councils. |
Ensuring the framework is flexible enough to allow councils to address unique local challenges.
Coordination between multiple stakeholders. |
Short-term: Develop and launch partnership frameworks (years one to two).
|
| Greater use of pooled funds for council priorities |
Establish pooled funds for climate initiatives that allow councils to prioritise actions based on local needs.
|
Create climate-specific area-allocated funding schemes, such as local/regional climate adaptation funds.
|
HM Treasury (lead), Department for Environment Food and Rural Affairs (DEFRA), Department for Energy Security and Net Zero (DESNZ), Environment Agency, councils, and regional bodies. |
Ensuring equitable access to and distribution of pooled funds for all councils.
|
Medium-term: Set up pooled fund mechanisms (years two to three). |
| National reporting on progress and delivery |
Develop a national reporting framework for councils on climate progress that is clear and streamlined, with a focus on key outcomes and avoiding excessive administrative burdens. Ensure reporting mechanisms reflect diverse local contexts, avoiding a one-size-fits-all approach. Consider light-touch reporting frameworks that provide meaningful data on delivery without overburdening councils. |
Establish a central climate reporting dashboard with a focus on high-level indicators.
|
Department for Energy Security and Net Zero (DESNZ lead), Department for Environment Food and Rural Affairs (DEFRA), Office for National Statistics (ONS), Office for Local Government (OFLOG), and councils. |
Risk of overburdening councils with reporting requirements. Ensuring data collection is consistent and reliable without being overly complex. |
Short-term: Develop reporting framework and consultation with councils (year one).
|
| Multi-year funding settlements |
Implement multi-year financial settlements for climate action to provide councils with long-term funding certainty.
|
Introduce a multi-year funding model through national budget allocations, specifically for climate action and net-zero initiatives.
Enable LAs to blend different funding streams, such as national grants, green finance, and private sector investments to expand opportunities for substantial and sustained investment.
Ensure settlements cover the direct costs of specific interventions or retrofit activities (energy efficiency upgrades and infrastructure changes). |
HM Treasury (lead), Department for Environment Food and Rural Affairs (DEFRA), Department for Energy Security and Net Zero (DESNZ), councils, and Local Government Association (LGA). |
Ensuring that multi-year settlements are adequate and responsive to inflation and rising costs.
|
Immediate: Consultation on multi-year funding models (year one).
|
| Inclusion of net zero and climate powers in devolution deals |
Include explicit net-zero and climate adaptation powers in future devolution deals, enabling places at local and regional levels to take on more responsibility for local climate actions.
|
Embed climate responsibilities in devolution agreements, with funding linked to net-zero targets, to empower all areas to benefit from new powers/approaches trialled by these agreements.
Include these powers in the English Accountability Devolution Framework as part of the English Devolution Bill. |
HM Treasury, Ministry of Housing, Communities and Local Government (MHCLG lead), devolved regional governments, and councils. |
Risk of uneven progress across devolved regions depending on local capacity.
|
Medium-term: Amend devolution agreements to include climate powers (years two to three). |
| Climate resilience: reframing the civil contingencies act (CCA) |
Review and reform the CCA to better address climate-related emergencies such as floods, droughts, and heatwaves, integrating findings from the latest Climate Change Risk Assessment (CCRA).
|
Update the CCA to incorporate climate risks.
|
Department for Environment Food and Rural Affairs (DEFRA lead), Home Office, Local Resilience Forums (LRFs), Department for Energy Security and Net Zero (DESNZ), and councils. |
Ensuring that climate risks are effectively integrated into the existing Civil Contingencies framework.
|
Medium-term: Reform the CCA (years one to three).
|
Additional considerations
Partnership frameworks
Central government must create clear, flexible frameworks for partnership working that empower local authorities to lead on climate action, while ensuring coordination at local, regional, and national levels. A strong focus on place-based action will enable local authorities to tailor their approaches to local circumstances, using national guidance as a backbone.
Funding models
Greater use of pooled funds will allow local authorities to address climate challenges specific to their regions and priorities, including cross-boundary issues such as flood risk or regional energy projects. Introducing multi-year settlements will give local authorities the clarity and security needed to invest in long-term climate projects and infrastructure.
Strategic partnerships are also welcomed as they provide a level of support and co-working, especially valuable for large-scale infrastructure projects that may be new to councils, such as heat networks. These partnerships enable local authorities to leverage expertise and resources, fostering confidence in managing complex, high-impact climate initiatives.
Along with a move away from reliance on numerous, competitively accessed funding pots and shifting toward direct allocations, this will reduce administrative burdens and allow authorities to focus resources more strategically.
Reporting and accountability
While national reporting on climate progress is necessary, it should be focused on outcomes rather than outputs, allowing councils to demonstrate real-world impact. Reporting should be streamlined and flexible, relying on high-level indicators and light-touch requirements that avoid overburdening councils. Care should be taken to avoid making reporting overly onerous or prescriptive, recognising the diverse capacities, approaches, and unique challenges across different areas. This approach respects councils' autonomy in how they achieve their climate goals while still ensuring accountability.
Climate powers in devolution
Embedding net-zero and climate adaptation powers in future devolution deals will allow regions and cities to take ownership of their climate strategies. This can help fast-track local decarbonisation efforts and improve climate resilience, particularly where local authorities have the capacity to implement ambitious policies and projects.
Reforming the civil contingencies act
As climate-related emergencies escalate and become more frequent, reforming the Civil Contingencies Act to address climate risks is essential for equipping local authorities to handle floods, heatwaves, and other climate-induced crises. This reform should include dedicated funding for climate resilience planning, climate-specific emergency response, and training programs that strengthen local government capabilities. Additionally, clear guidelines are needed for integrating climate risk assessments into local emergency plans, with an emphasis on consistent, actionable response strategies. Building capacity across local government also means providing tools, resources, and training to establish expertise in climate resilience, empowering local authorities to lead on both prevention and rapid response efforts.
Broader policy initiatives
Regional climate leadership hubs
Strengthen Net Zero Hubs by fostering collaboration between local authorities, other public-sector bodies, businesses, and civil society across multiple regions. Building networks across these essential organisations can drive shared climate goals and streamline the implementation of best practices and resources across regions. Cross-institutional collaboration also encourages pooling of resources, leveraging collective purchasing power, and scaling impactful climate solutions, making it possible to take on larger, cross-boundary projects that address systemic climate challenges.
Green finance models
Develop a Green Climate Fund to support pooled resources and provide multi-year settlements for local authorities, enabling long-term planning and climate project delivery. This fund should include incentives for councils to meet or exceed climate targets, while also serving as a vehicle to attract private finance. By creating co-investment opportunities and risk-sharing mechanisms, the fund can appeal to private investors seeking returns on sustainable infrastructure projects. This blend of public and private funding will enhance the fund’s impact, enabling local governments to undertake ambitious, large-scale climate initiatives.
Climate resilience in devolution deals
Strengthen devolution deals by offering additional powers specifically related to climate resilience. This would give devolved regions greater control over local climate adaptation strategies, such as the ability to prioritise and tailor infrastructure investments, manage land use planning, and allocate resources directly toward climate resilience. It also allows regions to shape emergency planning to local climate risks, making responses more effective. The primary issue has often been not a lack of powers but rather limitations in prioritisation and resourcing. By enhancing funding and decision-making authority alongside these powers, devolved regions can more effectively address local climate challenges.
Skills and supply chains
Supporting a just transition: protecting vulnerable communities
Climate action must prioritise a just transition that safeguards vulnerable communities, ensuring they are not disproportionately affected by climate policies or economic shifts. Local governments should be empowered to identify and support these communities, providing resources for job retraining, financial support for energy efficiency upgrades, and access to affordable green energy options. By creating protections for low-income and marginalised groups, councils can help facilitate an inclusive transition to a low-carbon economy, minimising social disparities and enhancing resilience across all communities.
Knowledge and resource sharing: building local capacity and expertise
Limited access to specialised knowledge and skills for climate action projects is a challenge. To address this, a central resource providing higher levels of skills and support (in addition to the existing provision), robust platforms for knowledge exchange, capacity building programmes, revenue support alongside capital investment, and best practice sharing among councils should be developed.
Capacity-building initiatives, such as tailored training for staff at various levels, leadership development programmes, and the creation of technical advisory groups, would further empower councils to independently manage and sustain climate initiatives. Through these efforts, councils would gain access to expertise in areas such as green finance and funding, renewable energy, sustainable urban planning, and carbon reduction, fostering an environment of learning and mutual support.
High Quality Jobs and Skills
To achieve the transformative changes required in the UK economy by 2050, local government will be instrumental in advancing technology transitions in homes and businesses, raising public awareness, supporting local enterprises, and upskilling the local workforce. While the suite of national and local government net-zero targets will increase demand for low-carbon goods and services in the coming years, ensuring a skilled workforce is in place to meet these demands by 2050 is essential.
The relationship between local and national government (in jobs/skills and wider supply side issues) should be coproduced and operate a local first principle, with a single point of access for national government. Local areas should define a special area to operate which can help align local skills improvement plans, net-zero hubs, growth hubs and Job Centre Plus. This should run dynamically between different types of local government and the nuances of local decision-making to make sure activity is done at the most appropriate level, while clearly outlining responsibilities and accountabilities.
It is crucial for local areas to be enabled to identify the specific skills gaps that will arise within each low-carbon sector, alongside opportunities for workforce reskilling. For example, in low-carbon heat, growing demand will create a need for skills in designing, specifying, and installing heat pumps, with new roles requiring NVQ level two to three qualifications. In low-carbon services, such as consultancy and financial services, there is an ongoing need for highly skilled professionals (NVQ level four and above) to enable these sectors to capitalise on emerging opportunities.
Councils should be supported to balance the development of green jobs with broader skills demands, such as those required for construction for house building. Furthermore, they should be provided with detailed data on current and future green jobs, broken down to the most granular level possible, to support more informed planning and decision-making.
Through strategic education planning, apprenticeships, and sustained business funding, councils can play a leading role in building a thriving green economy. This framework focuses on addressing skills gaps through strategic educational planning, early career guidance, apprenticeships, and providing business funding certainty. This can be supported by a clear pipeline of infrastructure projects of national significance, enabling local areas to forward plan the workforce needed and prevent workforce bottlenecks.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Strategic approach to further education (FE) to address skills gaps |
Councils to work with employers, industry bodies, and education/training providers to strategically align FE/professional skills courses with local skills needs in climate and green sectors. Provide guidance to FE/private training providers on aligning student course choices with future job market demands in sectors such as renewable energy, energy efficiency, and green construction. Develop industry-specific skills pipelines by collaborating with key delivery sectors on curriculum design and training programmes to fill existing gaps in skilled labour. |
Establish local Skills Advisory Panels that include employers, councils, and education/training providers to identify and address skills gaps. Align education/training funding with local green job priorities, focusing on sectors critical to the net-zero transition.
|
Department for Education (DfE lead), Local councils, Skills England, Department for Energy Security and Net Zero (DESNZ), further education (FE) providers, Council Business Boards. |
Balancing the demand from students with the needs of the local economy.
Potential need for new educational infrastructure to deliver training in emerging green industries. |
Medium-term: Revise strategic plans for further education and establish advisory panels (years one to three).
|
| Improve early careers advice to align with the green economy |
Integrate early careers advice that prioritises green job pathways in schools and colleges, ensuring that students are aware of emerging opportunities in net-zero industries. Create targeted outreach programmes to promote careers in the green economy, including site visits, internships, and mentorships with professionals in climate-related fields. Establish partnerships between councils, schools, and industry to enhance the provision of green career pathways and future job demand forecasting. |
Strengthen the National Careers Service to focus on future green job sectors, working with schools to offer tailored careers advice.
Establish a strategic priority for Skills England to advance the development of the green skills agenda and for the Office of Clean Energy Jobs to engage widely with the local government sector. |
Department for Education (DfE lead), Councils, Skills England, further education providers, industry bodies, schools., Multi Academy Trusts. |
Ensuring careers advice keeps up-to-date with the rapidly changing green job landscape. Building strong partnerships between education providers and employers in green sectors. Addressing unequal access to high-quality careers advice across different regions. |
Immediate: Expand career advice programmes (years one to three).
|
| Require contractors on government programmes to host apprenticeships |
Mandate that contractors on government-funded programmes (large-scale infrastructure projects and renewables) host apprenticeships focused on climate and green jobs.
Work with industry to offer structured, high-quality apprenticeships for young people and career switchers. |
Establish government procurement criteria that require contractors to offer apprenticeship opportunities in climate-related sectors.
|
Councils (lead), Department for Business and Trade (DBT), Department fo Education (DfE), Department for Energy Security and Net Zero (DESNZ), and contractors. |
Ensuring contractors have the capacity and resources to support high-quality apprenticeships. Monitoring compliance with apprenticeship targets in government contracts. Balancing apprenticeship schemes with other workforce needs. |
Immediate: Introduce procurement requirements for apprenticeships (year one). Medium-term: Monitor and review apprenticeship participation (years two to four). |
| Provide funding certainty for businesses in key delivery sectors |
Offer long-term funding commitments to businesses in key green sectors, such as renewable energy, building retrofitting, and sustainable construction, to encourage investment and workforce development.
|
Introduce multi-year settlements for green businesses to provide certainty for planning and investment.
|
HM Treasury (lead), Department for Energy Security and Net Zero (DESNZ), Department for Business and Trade (DBT), councils, banks and financial institutions. |
Ensuring that funding is sufficient and long-term to allow businesses to invest in skills and workforce development.
Clear long term regional/local pipeline of infrastructure of national significance to provide certainty |
Medium-term: Establish funding mechanisms and frameworks (years one to three).
Longer term: Allocations are needed, future growth cycles to be allocated on six to eight years basis. |
Additional Considerations
Gender representation in construction and clean energy sectors
To successfully meet workforce demands for clean energy and construction, it is essential to address the gender imbalance within these industries, which are traditionally male-dominated. Recruiting and training the number of people needed to deliver on clean energy goals requires a strategic focus on diversifying the workforce, particularly by attracting more women into the sector. Targeted efforts, such as inclusive recruitment campaigns, gender-sensitive training programmes, and mentorship opportunities, will be critical in creating an equitable, skilled workforce capable of achieving the ambitious goals of the clean energy transition.
Strategic further education alignment
While councils play a key role in commissioning FE places, ensuring that these places align with climate sector demands requires a more strategic approach. Councils should work closely with employers, trade associations/bodies and training/skills delivery organisations (FE, Higher Education and private companies) to design industry-relevant curricula and ensure that funding supports sectors where there are gaps in skilled labour. This alignment will support the just transition to a green economy, where skills and jobs are in high demand.
Careers advice and green pathways
Early careers advice is crucial to filling future jobs in climate-related industries. By integrating green career pathways into the national careers guidance system and linking students with industry, councils can ensure that young people are aware of future opportunities and equipped with the knowledge and skills to enter the workforce. This could also reduce youth unemployment while supporting climate goals.
Apprenticeships in green sectors
Mandating that government contractors provide apprenticeships as part of climate-related infrastructure and green programmes will create clear entry points for workers into growing green sectors. Apprenticeships should be tied to high-quality training standards, ensuring that participants gain valuable skills that can be transferred to permanent roles in renewable energy, construction, and other green jobs.
Funding certainty for green businesses
The success of key delivery sectors, particularly in renewable energy and retrofitting, will depend on long-term funding certainty. Multi-year settlements for businesses will encourage investment in workforce development, job creation, and new technologies. Councils can play a critical role by facilitating access to finance for SMEs, ensuring that companies of all sizes can grow and contribute to the green economy.
Broader policy initiatives
Inclusive growth and social value
There is an opportunity to use the demand for green jobs to tackle inequalities in local places by providing alternative career pathways that create stable and well-paid employment.
Green skills taskforce
Establish regional green skills taskforces where councils, further education sector, training providers, and industry can collaborate to identify skills gaps and deliver targeted training programmes. These groups could offer training in renewable energy, energy efficiency, low-carbon, and low carbon impact construction techniques technologies, helping to meet the growing demand for skilled workers in climate-related sectors. These should be organised via devolution agreements, rather than regions, with the flexibility to collaborate across different devolved areas. The LGA has set this out through the Green Jobs Framework.
Green business incubators
Create green business incubators within councils to support start-ups and SMEs in the green economy. These incubators would provide access to finance, technical support, and networking opportunities, enabling new businesses to scale up and create high-quality jobs.
National green delivery group
Through the Office of Clean Energy Jobs, relaunch the National Green Job Delivery Group to monitor labour market trends and skills needs, working with councils to ensure that job creation is aligned with the UK's net-zero goals. The Delivery Group could also advise on long-term funding needs and strategic investment in climate sectors.
Collaborative resource sharing
Local government, through place leadership and coordinated planning, can play a pivotal role in overcoming challenges within the FE sector. By facilitating the shared use or co-investment in specialised equipment, councils can reduce duplication and alleviate financial pressures on individual FE providers. This collaborative approach enables institutions to access state-of-the-art resources without bearing the full financial burden.
Funding and finance
Aligning local growth plans: integration of climate goals in economic development
There is a need for better alignment between local growth strategies and national climate objectives to drive a whole-system change that incorporates climate resilience into the foundation of economic development. Climate considerations should be embedded within local planning, with growth plans designed to actively support decarbonisation and sustainable land use. This involves rethinking economic development to include climate goals, ensuring that land-use planning prioritises green spaces, climate-resilient infrastructure, and sustainable transport options.
Local growth plans should be part of a broader public service reform, aligning health, housing, and employment policies with climate goals to create cohesive, climate-focused communities. For instance, integrating climate-smart building standards and low-carbon infrastructure into housing plans can reduce emissions and boost resilience. Additionally, aligning workforce development and skills training to support green jobs will enable people to participate in and benefit from the transition to a low-carbon economy.
By linking local and national strategies for climate action and economic growth, this approach will ensure that regional development contributes meaningfully to climate objectives while fostering social and economic benefits, such as job creation, improved public health, and greater community resilience.
Green jobs and skills development: workforce preparation for climate-specific jobs
A skills gap exists in green industries such as renewable energy and retrofitting. To address this, vocational education should be promoted, students engaged early, and training programmes aligned with future green job markets.
Private sector investment and collaboration: facilitating private sector engagement in climate action
Coordinated collaboration among private entities and inconsistent investment frameworks for green projects are challenges. To facilitate private sector engagement, conducive environments for investment should be created, agreements standardised, and public-private collaboration improved. Local Partnerships, owned by the LGA, has been actively involved in Private Finance Initiative (PFI) projects since its creation in 2009 and has participated in discussions with the Infrastructure and Projects Authority (IPA) regarding PFI alternatives. Local Partnerships has also played a key role in drafting the waste sector standard form for PFI contracts, contributing to the development of structured frameworks in this area.
Accelerating net zero through green finance
Green finance for local government involves using financial resources and mechanisms to support sustainable and environmental projects, helping councils achieve climate and environmental goals. Essentially, it focuses on funding projects that reduce carbon emissions, improve energy efficiency, enhance biodiversity, and build resilience to climate change impacts, all while fostering economic development within communities.
When speaking of green finance mechanisms, we are referring to the financial tool or structure used to fund these projects. This includes instruments like green bonds, grants, carbon credits, public-private partnerships, and green loans, all designed to make environmental initiatives financially viable. For example, a city might issue a green bond to fund an energy efficiency upgrade or seek a green loan with favourable terms. While green finance projects are the specific activities being funded, green finance mechanisms are the means by which local governments secure the necessary resources to bring these projects to life.
Enhanced central support, risk-sharing mechanisms, and greater investor engagement will help local governments overcome capacity barriers and develop successful climate finance initiatives. Through this approach, councils can become key drivers of green economic growth while delivering on national climate goals. The table below focuses on enhancing local government’s role as a convenor in developing green finance initiatives, alongside better central support for project and programme development and risk-sharing arrangements.
| Objective | Key actions | Mechanism | Responsibility | Consideration/barriers | Timeline |
|---|---|---|---|---|---|
| Enhance central support for local green finance projects |
Increase central government support for project and programme development in councils to enable the successful delivery of green finance projects, including renewable energy, building retrofits, and sustainable infrastructure.
Create clear guidance and frameworks to support councils in developing green finance plans that align with national net-zero targets. |
Establish a green finance delivery support unit within central government to assist councils in project scoping, financial structuring, and technical development.
|
Department for Energy Security and Net Zero (DESNZ lead), HM Treasury, councils, National Wealth Fund, and Green Finance Institute. |
Limited local capacity and expertise for developing large-scale green finance projects.
PWLB remains the easy option for councils and they will need a compelling reason to look elsewhere. Increasing number of councils either issuing or close to s114 declarations. |
Immediate: Provide initial guidance and support (year one).
|
| Establish risk sharing and guarantee mechanisms for green projects |
Develop a national risk-sharing facility to provide guarantees for council-led green finance projects, reducing the financial risk for local governments and private investors.
|
Work with the National Wealth Fund and other financial institutions to establish a risk-sharing facility focused on green finance projects.
|
HM Treasury (lead), Department for Energy Security and Net Zero (DESNZ), Department for Business and Trade (DBT), National Wealth Fund, financial institutions, and councils. |
Private sector reluctance to invest in projects with longer return periods or higher upfront costs.
Balancing risk between public and private sectors while ensuring that climate goals are met. |
Medium-term: Set up risk-sharing mechanisms and guarantee facilities (years two to three).
|
| Improve local capacity for developing green finance projects |
Provide capacity-building programmes for local government staff to develop expertise in green finance, covering areas such as project structuring, financial modelling, and investor engagement.
|
Develop a national green finance training programme in collaboration with organisations like the Green Finance Institute and LGA.
|
Department for Energy Security and Net Zero (DESNZ lead), Local Government Association (LGA), councils, Green Finance Institute, and regional partnerships. |
Uneven capacity between councils, with smaller councils facing greater challenges in accessing resources and expertise.
Ensuring that capacity-building programmes are widely accessible and well-publicised. |
Immediate: Launch capacity-building programmes (year one).
|
| Support local government in engaging with investors |
Facilitate stronger engagement between councils and private investors, including pension funds, green banks, and impact investors, to attract private capital to green projects.
|
Establish a green finance investment platform to connect councils with private sector investors.
|
Department for Business and Trade (DBT lead), Department for Energy Security and Net Zero (DESNZ), HM Treasury, councils, financial institutions, and National Wealth Fund. |
Difficulty for councils in understanding investor requirements and structuring projects to meet these. Ensuring private sector confidence in the financial viability of local government-led green projects. Lack of existing relationships between local governments and key investors. |
Medium-term: build relationships and develop investor engagement platforms (years two to three).
|
| Align national and local finance strategies for net zero |
Ensure that local green finance strategies align with national net-zero goals, including the UK's 2030 and 2050 targets.
Develop place-based green finance plans that reflect both national targets and local climate action needs, integrating natural capital, climate resilience, and economic development. |
Introduce a national green finance framework that provides councils with a roadmap for aligning green investment strategies with national net-zero goals.
|
Department for Energy Security and Net Zero (DESNZ as lead),HM Treasury, councils, National Wealth Fund, and financial institutions. |
Ensuring that councils priorities are adequately reflected in national green finance strategies.
The risk of inconsistent approaches across different councils. Place-based funding mechanisms are currently being tested through the Net Zero Accelerator programme – if these are deliverable they may still not represent the most effective way to act at scale and pace – they are preferred model for councils, but not necessarily for the financial institutions. |
Immediate: Provide guidance on aligning local and national finance strategies (year one).
|
Additional considerations
Centralised project development support
Local governments often lack the technical expertise needed to deliver complex green finance projects. By providing better centralised support through tools like a Green Finance Delivery Support Unit, councils can build capacity and develop investment-ready projects. This can accelerate the development of green infrastructure, renewable energy projects, and climate adaptation initiatives at the local level.
Risk sharing and guarantees
Green projects, particularly those led by councils, often face financial risks due to long payback periods or uncertainty around future returns. Developing a Green Project Guarantee Scheme can help de-risk investments and encourage greater private sector participation in local green finance initiatives. By providing partial guarantees for key projects, the government can increase investor confidence and unlock additional capital for local climate action.
Capacity building and peer learning
Many councils lack the internal capacity to develop and deliver green finance initiatives. Establishing regional centres of excellence and peer learning networks can help share expertise and resources across local governments, enabling smaller councils to benefit from the experiences and knowledge of larger authorities. This would help ensure that all areas have access to the skills needed to develop and implement green finance projects.
Investor engagement
Councils need better access to investors and clearer guidance on how to develop projects that are attractive to private capital. By establishing a Green Finance Investment Platform and organising regular green investment summits, the government can help councils build relationships with investors and develop project pipelines that meet investor requirements.
Broader Policy Initiatives
Green finance taskforce
Establish a green finance taskforce to oversee and coordinate national and local green finance efforts. This body could monitor the progress of green finance projects, provide recommendations for improving financial mechanisms, and ensure that councils have access to the tools and resources they need to succeed.
Place-based green investment strategies
Encourage councils to develop place-based green finance strategies that align with both national net-zero goals and local priorities. These strategies should integrate climate resilience, natural capital, and economic development into a coherent plan for local climate action.
Public-private partnerships (PPPs)
Support the development of PPPs in green finance by offering incentives for private sector participation in local green projects. By blending public and private finance, councils can access the capital needed to deliver large-scale climate initiatives while sharing financial risks with private investors.
Conclusion
The report provides a comprehensive strategic framework, along with specific recommendations, for the UK Government to collaborate effectively with local authorities in delivering on climate change commitments. It highlights the importance of a whole-sector approach that aligns national and local policies, enhances local authority capacity, and provides flexible funding mechanisms. By embedding climate action into broader national objectives and empowering local governments with more autonomy and resources, the government can foster a more inclusive, cohesive, and efficient approach to tackling climate challenges. In addressing cross-cutting issues, the report outlines actionable steps for the government to make swift, impactful progress on its climate agenda. Ultimately, this framework offers the government clear, practical guidance on how to work in partnership with local authorities to achieve the UK's climate targets. Through this collaboration, the UK can accelerate its path toward achieving net zero, build climate resilience, and support long-term environmental sustainability, while delivering tangible benefits to communities across the country.
Appendix
The preceding chapter provided a comprehensive overview of the insights that have shaped the strategic framework underlying our recommendations for delivering the government’s climate programs and commitments. These insights were gathered through in-depth research and analysis to enhance our understanding of the broader policy landscape guiding the delivery of the government's climate initiatives. Additionally, a series of workshops held in August 2024, involving Chief Executives and senior officers from a wide range of local and combined authorities, contributed valuable perspectives to this framework.
There have been different valuable contributions on how to improve work with local government, demonstrating the importance of it. This project builds on that body of work, seeking to apply it to the collective objectives of this new government and local government. Contributions we have reviewed include publications from influential bodies such as the LGA, including their white papers on climate action and local government’s role in supporting national climate goals, along with other publications such as the Skidmore Net Zero Review, UK100’s Powers in Place report, and 3Ci’s Net Zero Investment Taskforce findings. These papers and resources have provided valuable context on how councils are currently positioned to contribute to the climate agenda and where further support and collaboration with the central government are necessary to achieve these targets. We have also assessed the government’s climate manifesto commitments, which has ensured that our recommendations are aligned with the national priorities and targets for emissions reductions, clean energy transitions and sustainability.
Additionally, our work has drawn on insights from the Climate Change Committee (CCC), particularly their reports on the progress and challenges in meeting the UK's net-zero targets. By incorporating the CCC’s reflections on local government’s capacity and role in delivering climate action, we have ensured that our recommendations are both feasible and aligned with expert advice on addressing climate challenges at the local level.
Furthermore, we have considered findings from the National Audit Office (NAO) and independent reviews of the government’s net-zero strategy. These sources have offered critical reflections on the effectiveness of current policies and the financial and operational pressures faced by councils. This analysis has helped us to identify where gaps exist between national policy and local implementation, and to shape recommendations that promote greater integration, efficiency, and impact.
Alongside the research and analysis undertaken, we have conducted workshops and consultation which served as a platform for senior leaders to share their perspectives, challenges, and priorities. This collaborative process ensured that the frameworks proposed in this report are not only aligned with governmental objectives but also grounded in the practical realities faced by these organisations. As a result, the recommendations are designed to meet both the immediate and long-term goals of the government’s climate agenda, fostering cross-sector collaboration and promoting sustainable impact.
The key organisations that participated in this process are listed below. The workshops focused on identifying critical areas for success in the implementation of the government’s climate manifesto commitments.
Consultees:
- Bassetlaw District Council, Bath & North East Somerset Council, Birmingham City Council, Bristol City Council, Cambridgeshire & Peterborough Combined Authority, Cheshire East Council, Cornwall Council, East Midlands Combined County Authority, Enfield Council, Hertfordshire County Council, Huntingdonshire District Council, Lancaster City Council, Leeds City Council, Lewes District Council and Eastbourne Borough Council, Lincolnshire County Council, London Borough of Waltham Forest, Manchester City Council, Newcastle City Council, North Kesteven District Council, Reading Borough Council, Royal Borough of Kensington and Chelsea, South Cambridgeshire District Council, South Gloucestershire Council, Stroud District Council, West Suffolk Council, and Wokingham Borough Council.
We have also consulted with the ADEPT (Association of Directors of Environment, Economy, Planning and Transport) leadership team and their Climate Change Board to further inform our recommendations. These discussions provided valuable insights into the specific challenges and opportunities faced by councils in delivering climate programmes, as well as the importance of aligning local efforts with national climate goals.
Finally, we have drawn on the extensive work carried out by Local Partnerships LLP in supporting the public sector’s efforts to tackle climate change. Local Partnerships has significant experience across the net zero and climate adaptation agendas, covering areas such as building retrofits, climate adaptation planning, and renewable energy. They have been instrumental in helping councils with retrofit projects to improve energy efficiency in housing and public buildings, addressing the dual goals of reducing emissions and improving living standards. In adaptation, Local Partnerships provides guidance on climate resilience strategies, supporting councils in identifying and implementing measures to respond to climate risks. Furthermore, Local Partnerships have played a crucial role in establishing Ynni Cymru, the Welsh Government's national energy company, which focuses on renewable energy production and aims to ensure energy sovereignty and sustainability for Wales. Through projects like these, Local Partnerships support the development of green infrastructure and the shift towards a low-carbon economy across the UK. Feedback from councils engaged in this work with Local Partnerships has further informed our understanding of the challenges faced by councils in delivering on climate commitments, ensuring that our recommendations are based on practical insights from those working on the front lines of climate action. This multi-layered approach ensures that our recommendations are grounded not only in the practical experiences of councils but also in the latest research, evaluations, and reflections on climate policy. It provides a robust framework for driving meaningful, sustainable change across sectors and regions.
References
Contact details
Olya K-Mehri
Assistant Director
Local Partnerships (LP)
[email protected]
Jo Wall
Director
Local Partnerships (LP)
[email protected]