Localis Responds to the Net Zero Growth Plan
by Joe Fyans, Head of Research
Another year, another government strategy for economic growth. It seems like a lot longer than two years ago that we were responding to the Plan For Growth in 2021, to say nothing of 2022’s abortive Growth Plan. Now, in 2023, we arrive at the Net Zero Growth Plan, released alongside the Energy Security Plan on Thursday as part of what was dubbed Green Day (after all the jokes made on the day itself, any puns from me would surely be redundant). Released in response to the Supreme Court finding the original Net Zero Strategy to be unlawful in its vagueness, the strategy, continuing a recent theme, contained an awful lot of the tying together of things the government are already doing, combined with some new policy and the promise to consult on the potential implementation of further measures in the near to medium term.
The documents are not without their positives. The Local Net Zero Hubs have been received positively by the vast majority of authorities we have spoken to as part of our extensive research on local decarbonisation, their continuation and the confirmation that the Local Net Zero Forums establishment had not been lost in the weeds of departmental restructuring is welcome. The establishment of a digital platform to provide advice to local authority officers on decarbonisation strategy is also a positive development, as there has been concern in the sector for some time that best practice and proper procedure might be falling through the gaps of an uneven landscape.
There are, however, concerns. In this newsletter analysis, for reasons of brevity and the attempt to avoid too much replication of analysis elsewhere, I am going to focus on two elements of concern from a Localis perspective, based on our recent work on net zero. The first is the troubling lack of urgency and clear overarching direction in the growth plan, the second is the thorny issue of decarbonisation under a two-track devolution system where a certain form of governance is explicitly favoured by central government.
Into the long grass
A major element of the Local Net Zero section of the Net Zero Growth Plan is the need to attract new forms of finance. Government has pledged to take a look at blended finance options for councils, which you might be forgiven for thinking they should have been doing already, and also vowed to simplify and streamline the funding landscape for councils. This is welcome, but far too slow in arriving. It also misses out the very same piece of the puzzle which saw so little attention in the March budget: the revenue funding limitations on local government’s ability to deliver public services. Far from ancillary, the ability for councils to provide day-to-day services to the public is foundational to their capacity for long-term strategic thinking and the cornerstone of the relationships with communities which must underpin a democratic and just transition to a net zero economy. As we are advocating for as part of our Local Resilience Act campaign, a dedicated revenue funding stream for local government to meet the challenge of mitigation and adaptation to climate change is past due.
Much commentary from a wide range of stakeholders has already pointed out the key missed opportunity of the two strategies that comprised Green Day: whilst there is good stuff in there, this does not amount to a long-term plan for structural investment in decarbonising the economy akin to the USA’s Inflation Reduction Act. Furthermore, there is no framework for how reductions will break down locally and what priorities should be in different parts of the country. Such a plan is being cried out for by not just the private sector but by councils and communities who are all pushing ahead in their own way but without a clear overarching direction and quantified understanding of how action in place aggregates up to a net zero economy in 2050.
This was one of the primary recommendations of our 2022 report Mapping A Route to Clean Local Growth, and it remains money left on the table for local economies and a missed opportunity to improve the legacy left for future generations. It is my firm belief, as I wrote in our recent essay collection on local government finance reform, that at some point soon, factors both ecological and economical will force such a long-term and quantified regional strategy into existence. For now though, it remains in the aforementioned savannah.
Also in the long (or at least medium height) grass is a decision on the end to the effective ban on onshore wind currently imposed by the planning system. This is more excusable as the government can use their forthcoming response to the draft National Planning Policy Framework to finally make a decision which would by all accounts be supported by the public and allow onshore wind turbines to be built on English soil. The strategy is at least promising in this regard, stressing the efficacy of onshore wind as an energy source and stating a commitment to increasing our domestic capabilities to manufacture and install turbines, so we can hope to see this logjam to renewable energy removed in the coming year.
Retrofit for all the places that want it
Two-track devolution, where those areas willing to band together as a combined authority – with a mayor in place to act as either (a) a lightning rod of democratic accountability or (b) a single point of contact for Whitehall, depending on your perspective – has been a feature of English local government for some time now. Since the Levelling Up White Paper, with its devolution framework and announcement of County Deals, however, the process has seemed to intensify, with multiple deals being announced in the past year. The more the process of combining the authorities of all those areas “who want one” rolls on, the more problematic it becomes, as it has long been the case that extra devolution treats are rolled into policy, for those who show willing by wanting a mayor. This is fine in and of itself, but under the current system it has the potential to lead to major distortions.
For example, with the powers mooted for combined authorities in the Subsidy Act, there would surely be great impetus for those businesses trading in Leicester or Leicestershire to move to the parts of the East Midlands which did “want one” given that neither Leicester or Leicestershire would be able to apply the same subsidies for business as the new East Midlands Combined Authority. This should elucidate the issue with giving combined authorities retrofit powers. It is not about the authorities per se, but the areas that are not in them, where the optional formation of a subregional mayoralty seems like a distant political possibility. Did the people of Cornwall, for example, just consult themselves out of a serious retrofit programme?
Retrofitting our housing stock is an urgent decarbonisation mission with a huge economic prize. We do not have time to wait for the multiple parts of the country that do not want a mayoral combined authority to undergo Damoclean conversions to give them the powers and finance they need to drive retrofitting programmes. Furthermore, given the major constraints on skills, labour and materials reported across the construction sector, some kind of national accounting needs to be done to ensure that places where retrofit would be most beneficial – both to the local economy and to hitting net zero – are identified and targeted, rather than selection on the basis of governance model.
Conclusion
The Net Zero Growth and Energy Security plans indicate a government which is beginning to match its rhetoric with action where decarbonisation is concerned, with an acknowledgement of the importance of the local state in delivering this ambitious target and the outlining of measures to aid councils in doing so. However, the lack of a clearly quantified roadmap to net zero, alongside the attempt to mash the required devolution revolution into a messy and heavily politicised governance landscape remains a drag on what ought to be a locally-led overhaul of a national economy which isn’t working for most of us in any case.
The optimistic view is that this marks the beginning of a pivot to serious engagement which will end with locally-led economic growth through decarbonisation. The pessimistic view is that time is running out.