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NAO releases local government and net zero report

Today's report from the National Audit Office (NAO) finds that central government has not provided local authorities with clarity about their roles in achieving net zero by 2050 and its approach to funding their net zero work is ‘piecemeal’.

In June 2019, the government passed legislation committing to achieve net zero by 2050.

Local authorities provide a range of services that have an impact on the government's commitment to achieve net zero greenhouse gas emissions by 2050, such as transport planning, social housing and recycling and waste services.

Central government can direct local authorities to act on its priorities through statutory requirements, or incentivise them to act voluntarily.

Central government has not yet developed with local authorities any overall expectations about their roles in achieving the national net zero target, despite council having started a range of climate work, some as a result of government schemes.

The NAO found that 91% of local authorities have adopted at least one commitment to decarbonise their activities or their local area, with more than a third (38%) of single and upper tier authorities committing to decarbonise their local area by or before 2030.

However, central government is yet to decide whether local authorities' roles in meeting the national net zero target should have statutory basis.

Without a clear sense of responsibilities and priorities, there is a risk that local authority action on net zero is not as co-ordinated, targeted, or widespread as it might need to be.

The government has not yet set out to local authorities how it will work with them to clarify net zero responsibilities.

It has committed to outline responsibilities at national, regional and local level in its overall net zero strategy, which will be published before COP26 in November 2021.

Departments have carried out some engagement with local authorities to factor in their perspectives on this overall strategy and the supporting sector decarbonisation strategies.

The Ministry of Housing, Communities and Local Government (MHCLG) for example, is running a series of workshops on the resources and powers local authorities will need for net zero.

However, the NAO is not convinced that overall engagement has been sufficiently strategic or co-ordinated to ensure that the role of local authorities in meeting the national net zero target is clearly defined.

Local authorities told the NAO that they find it hard to engage with central government on net zero and that there is a lack of coordination between departments on their specific net zero requirements.

In March 2020, in an informal stocktake, MHCLG found approximately 45 policy areas across government that are likely to impact local action on climate change and recognised that this posed a significant risk of inconsistent goals and messages.

In April 2020, MHCLG set up a new cross-department local government policy group to discuss local government action on climate change mitigation and adaptation.

Neither MHCLG nor HM Treasury has assessed the totality of the funding available to local authorities for net zero or whether the balance of different types of funds is likely to be effective.

Local authorities can use core funding from MHCLG, can bid for grant funding, or they can access wider funding targeted at more general outcomes, such as social or economic growth.

From late summer, the UK Infrastructure Bank will also be able to lend up to £4bn to local authorities to help them achieve the net zero target and support economic growth.

Grant funding for local authorities' net zero activities increased from £74m in 2019-20 to £1.2bn in 2020-21, but remains fragmented.

NAO analysis of 21 grants available to local authorities for net zero work shows that local authorities have received very different amounts from these funds.

17 local authority areas received £20m or more each, while 37 received less than £2m each and per person, 14 local authority areas received £50 or more, while 67 received less than £12.50.

Local authorities have varying levels of capacity to engage with net zero.

In a 2020 survey from the Local Government Association (LGA), 79 out of 90 respondents thought a lack of workforce capacity was a moderate or significant barrier to tackling climate change.

In 2013 and 2017, the Department for Business, Energy and Industrial Strategy (BEIS) set up dedicated organisations to support local authorities on energy decarbonisation and the Department for Transport (DfT) is now setting up a similar body on active travel.

In November 2020, a ministerial-led Green Jobs Taskforce was set up to develop a green jobs and skills action plan to support the development of the government's strategies for net zero and a green recovery from the Covid-19 pandemic.

The NAO recommends that central government carries out an analysis of the net zero funding available to local authorities to inform the next Comprehensive Spending Review, considering the cost pressures they face.

Commenting, Head of the NAO, Gareth Davies said:

"There are serious weaknesses in government's approach to working with local authorities on net zero, stemming from a lack of clarity over roles and responsibilities and piecemeal funding.

“This hampers local authorities' ability to plan effectively for the long-term, build skills and capacity, and prioritise effort.

"Government's efforts to improve its approach to local action on net zero have been understandably slowed by the Covid-19 pandemic. However, there is now great urgency to make progress."

PSE will be hosting a Public Sector Decarbonisation event on 9 September. Join us for the full day event by registering here.

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