Source · Select Committees · Environmental Audit Committee
Recommendation 31
31
Accepted in Part
Paragraph: 163
Reform local net zero funding by moving from competitive to needs-based and core grants
Recommendation
We welcome the work that the Government has done so far to provide a “one stop shop” of information on net zero grants to which local authorities can submit competitive bids. The Government appears to have streamlined the number of competitions for English local authorities somewhat, apparently taking the total from 22 to 18. However, this does not solve the problem of local authorities having to spend time and resource putting together applications that may fail, preventing them from having the visibility they need to plan for the long-term and develop investable projects. Furthermore, place-specific net zero measures have been shown to be more effective than place-agnostic measures. We recommend that the Government move away from competitive grants for net zero projects, and consider allocating some funds on a needs basis, and provide core funding for all councils to take forward climate action across their own services. We also recommend that the Government consider issuing funds for place-specific measures that are less constrained by the nationally set criteria of central-government issued grants.
Government Response Summary
The government acknowledges the role of local authorities and is providing £19m for a Local Net Zero Accelerator programme with pilots in three areas, alongside existing programmes. It is exploring how to simplify and consolidate local net zero funds and has announced pilots for devolved building retrofit approaches, but does not commit to moving away from competitive grants or providing universal core funding for climate action for all councils.
Paragraph Reference:
163
Government Response
Accepted in Part
HM Government
Accepted in Part
We agree that local authorities are important players in the delivery of national net zero targets and are well placed to lever in commercial investment for net zero. To support them in this we are providing £19m for a Local Net Zero Accelerator programme to unleash the potential of local government to attract private sector investment for green growth by piloting new approaches in three areas. This is alongside our Local Net Zero Hubs Programme which supports local authorities to develop net zero projects and attract commercial investment. The UK Infrastructure Bank also includes a lending facility of £4 billion for local authorities at preferential rates. There is a range of funding available for local authorities to meet net zero, including through their core settlement, grants, and UK Growth funding. In the Net Zero Strategy the Government committed to exploring how we could simplify and consolidate funds which target net zero initiatives at the local level where this provides the best approach to tackling climate change, and we are taking this work forward. We have already announced pilots of a devolved approach to buildings’ retrofit for the trailblazer devolution deals in West Midlands and Greater Manchester Combined Authority. More generally, the Levelling Up White Paper set out the Government’s ambition for a simpler and more streamlined funding landscape for local authorities. We are committed to continually improving the way funding is delivered and we published the Funding Simplification Plan in July 2023. This plan sets out the Government’s ambition for increasing the effectiveness and efficiency of the current funding system.