Central government should establish core principles for future net zero devolution and ensure that all devolution deals agreed between now and 2030 have a strong net zero element. Central government should fully back at least one Trailblazer Net Zero City, Local Authority and Community, with the aim for these places to reach net zero by 2030. |
774. Net zero powers are devolved to varying degrees across the UK. The devolved administrations are in many places setting examples for the rest of the UK. For example, Scotland's net zero target is 2045, in Wales the Well-being of Future Generations Act encourages sustainable development, and in Northern Ireland the Green Growth Strategy is helping to build green industries such as hydrogen.
775. Within England, regions, mayors and different tiers of local authority have varying degrees of power on net zero.
776. The Review visited and heard directly from leaders in all of the devolved administrations and every region of England. It was clear from this engagement that net zero devolution has been a success to date, and that it has enabled nations and regions to deliver more effectively.
777. It was also clear that Government can do more through greater devolution of powers and greater consistency in this devolution. For example, Manchester City Council's response to the Review's call for evidence noted that devolution was one factor that would be "essential for future energy security and UK economic growth and productivity."549 UK100's Power Shift report found that:
"[L]ocal authorities need more powers and resources, clarity over their role and an investment in skills and jobs to take the next step [on net zero]."550
778. The Levelling Up White Paper announced that by 2030 there will be a devolution deal for every part of England that wants one. The first of these deals, for York and North Yorkshire, included a strong net zero element, while Greater Manchester and the West Midlands are currently negotiating deeper devolution deals.
779. Government should ensure that every devolution deal includes a strong net zero element, with a focus on the powers needed to achieve greater growth. With more powers, areas will be better able to create systems that drive green growth. For example, the Review heard that greater powers would allow areas to create coordinated local skills plan that meet local net zero needs, undertake LAEP that could form the foundation of future energy projects, or take a neighbourhood approach to retrofit that utilises economies of scale and hyper-local efficiencies such as when transporting materials or erecting scaffolding.
780. Government should work closely with areas to determine where net zero policy can be devolved, learning from other devolved areas such as skills. Based on the framework and statutory duty set out earlier, this could help form a clear framework and future agreement on net zero devolution.
CASE STUDY: Regional Net Zero Action West Midlands Combined Authority In 2019 the West Midlands Combined Authority set a net zero target of 2041 and declared a climate emergency. In 2022, it published a five-year plan detailing how the area could start to deliver on this net zero target. In the West Midlands, the existing low carbon sector already represents a workforce of 94,000 people across more than 5,000 businesses, generating £12 billion of low carbon revenue per year. Three of the four leading sectors in the West Midlands - which are based on existing regional strengths - focus on net zero ambitions. The five-year plan aims to create 21,000 new low carbon jobs by 2026, with associated economic growth expected to create a 7% increase in employment. The growth potential for the area's leading net zero business clusters has been estimated as: • Electric light vehicles and battery storage: £850-950 million growth in output and 11,200-12,400 new jobs; • Modern and low carbon utilities: growth in output of £420-470 million and 4,400-4,900 new jobs; • Manufacturing future housing: £220-320 million growth in output and 3,400-3,700 new jobs. The West Midlands is also proactively looking at how its net zero ambitions can directly drive economic growth through initiatives such as its 'SMART hub' (Sustainable Market for Affordable Retrofit Technologies) and its Net Zero Neighbourhood' demonstrator, which both seek to catalyse supply chain growth. Greater Manchester Combined Authority In 2019 the Greater Manchester Combined Authority (GMCA) launched its five-year environment plan which sets a target for the area to be carbon neutral by 2038. The plan was launched at its Green Summit, which is now in its fifth year. The summit seeks input from businesses, policymakers, local communities, and industry on how the city region should accelerate action against its five-year plan. In 2022, Greater Manchester established a new cross-sector taskforce to steer the GMCA commitment to deliver 30,000 operational net zero carbon social rented homes in Greater Manchester by 2038. In addition, devolution of powers, including the ability to franchise bus services across Greater Manchester, has allowed the city-region to implement price reforms on its bus network. These reforms will support bus users with the cost of living crisis, grow bus patronage and revenues and support the shift to more sustainable travel. Bus fares will cost no more than £2 a journey, or £1 for children, and a weekly cap introduced from the start of 2023 will be £21 for adults and £10.50 for children. This is as part of plans to deliver a fully integrated public transport system across buses, trams, trains and bikes. This has also included investment from the Department for Transport, Stagecoach and GMCA to support the introduction of 170 zero emission buses by 2024.551 |
781. Other countries and regions are beginning to take a more locally focused approach to net zero. In September 2021, the EU launched a programme to support 100 climate-neutral cities by 2030. If the UK does not demonstrate ambition on local net zero action, it risks falling behind regional competitors, missing out on first-mover advantage, and having to do more to catch up later.
"Ultimately, the government must provide more funding that is available over a longer-time frame to effectively support decarbonisation. Ideally this would be provided via long-term devolution settlements for net zero at the Combined Authority level. This would provide stability in funding for net-zero while addressing the issues that are caused by short-term funding provision that pits area against area. Local areas in the majority of cases know the interventions that need to be implemented and therefore should be given the freedoms and flexibilities to apply a location specific approach to decarbonisation."- West Yorkshire Combined Authority552
782. Alongside net zero devolution for all areas, Government should fully back at least one city, local authority and community across the UK that want to go further and faster on net zero.
783. Government should work with these places to develop 'Trailblazer Net Zero Deals', which should have the outcome of helping places to reach net zero by 2030 and should be based on long-term support from central government. As described earlier in the Pillar, short-term funding competitions are a barrier to the long-term, joined-up action needed on net zero. We need to begin planning local net zero delivery across years and decades rather than months.
784. The degree of funding and devolution of powers in Deals should initially be dependent on a track record of delivery, and further flexibility on powers or funding could be based on initial performance to ensure value for money for taxpayers. The Deals should be designed to encourage a whole systems view of net zero.
785. While some funding should come from government, there should also be a clear focus on attracting private finance, without which such a quick transition will not be practical. The Deals could also trial a 'Net Zero Sandbox' style approach which allows firms to test innovative propositions and could encourage research, development, and innovation in emerging net zero fields. This could offer an attractive proposition to internationally mobile investments.
786. This approach could be particularly beneficial when combined with other aspects of devolution - for example, combined authorities could put their existing powers on skills to better use if they had long-term funding around which to develop net zero industries and supply chains. Positive results have already been seen from other long-term funding arrangements such as City Deals, through which government committed to providing funding over a 30-year period.
787. Selected 'Trailblazer' places should cover urban, rural, and coastal areas, with strong monitoring and evaluation at every stage to create a strong evidence base that can help determine the best methods for effective local net zero delivery. This knowledge could be shared across all regions to improve net zero delivery, as well as providing a basis from which Government could determine whether and to what extent to continue with projects.