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NAO: coherent approach required for local authorities to hit net zero

Author: ICAEW Insights

Published: 15 Jul 2021

An NAO report has flagged serious weaknesses in government’s approach to working with local authorities on decarbonisation due to a lack of clarity over roles, piecemeal funding, and diverse accountabilities.

The National Audit Office (NAO) issued a report ‘Local government and net zero in England’ on 16 July 2021, which considers how effectively central government and local authorities in England are collaborating on net zero. 

Part I – Local authorities’ role in achieving net zero

Local authorities have a major role to play in achieving net zero due to the sector’s powers and responsibilities for waste, local transport and social housing as well as through their influence in local communities. 

91% of local authorities in England have formally adopted at least one commitment with the aim of reducing emissions at least as quickly as the national net zero target. However, these commitments are not always specific and some are merely tentative. Furthermore, there is little consistency in local authorities’ reporting on net zero, which makes it difficult to get an overall picture of what has been achieved. 

Rather concerning is a lack of central government planning and uncertainty about the role local authorities should play in achieving net zero. Given the complexity and cross-cutting nature of the work that will be required to meet the national net zero target, it is important for central and local government to work together to reach a clear, shared understanding of roles and responsibilities.

Several central government departments have responsibilities related to local authorities’ work on net zero; the Ministry of Housing, Communities & Local Government (MHCLG) is responsible for planning and the Department for Transport (DFT) provides funding for road networks and local transport services. However, there is a lack of coordination across government departments – 45 policy areas are split across five departments – making it difficult for local authorities to engage with central government on net zero. There is no central point of contact. 

Part II - Local authorities' resources and skills for net zero

ICAEW has been highlighting the precarious state of local authority finances in light of the increased number of s114 “bankruptcy” notices. It is therefore no surprise that funding is a major issue. As a minimum, local authorities will need the spending power to decarbonise their own buildings and the social housing they own, and to build the skills to incorporate net zero into their existing functions such as transport planning. 

Whilst dedicated grant funding for local authority work on net zero increased significantly in 2020-21, it remains fragmented. Added to this are the demands from fulfilling other government policy objectives such as the levelling up agenda.

Local authorities have varying levels of capacity to engage with net zero. Whilst some have climate teams of around 30 people, many lack the necessary workforce to be effective. This skills shortage has been made more severe by the short term, competitive nature of much net zero funding from departments. This leads to a cycle where local authorities that have been successful in previous funding rounds continue to win most of the funding, because they have people with the expertise and time to apply, leaving others behind.


The disjointed nature of how central government is currently engaging with local authorities to achieve the statutory target of net zero by 2050 is hampering their ability to plan effectively for the long-term, build skills and capacity, and prioritise effort. 

Richard Spencer, director for sustainability at ICAEW, commented: “The NAO has produced an excellent report highlighting the urgency of climate action that is required at a local level, especially around mitigation. However, if we think also about the immediate impacts of climate change and the need for adaptation, the imperative for action is even greater. The current working relationship between central government and local authorities is worrying given the lack of cohesion and sense of direction.”

“The lack of funding over the last decade is starting to put unprecedented strain on local authority finances, impacting both the workforce and the skills available. This is not the best foundation upon which to build a coherent strategy of tackling the climate crisis. The recommendations the NAO makes are sensible, especially having clearer communication channels and ownership within central government. However, the key ingredient to making all of this work is funding.”

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