Memorandum by the Local Government Association
(CC73)
The LGA welcomes the opportunity to submit the
perspective of local government to the inquiry of the select committee.
As the body representing all the local authorities
in England and Wales, the LGA has been active in representing
views on the way the UK Climate Change Strategy is shaped, and
on the impact of the Climate Change Levy.
Our overall position on energy issues and climate
change is contained in the LGA's policy paper: Energy services
for sustainable communities—the local government position.
We have also had input into the government's climate change consultation,
its renewables consultation, and its climate change levy consultation.
A summary of the position paper and the text of the three submissions
is on the LGA's web site at www.lga.gov.uk under policy—announcements—energy.
Our overall position is that local government
has a major role to play in tackling climate change and in reducing
CO2 and methane emissions. Given the necessary resources
and the legal and financial framework that enables action (there
are many current obstacles, identified in the LGA documents referred
to) there are countless ways that local authorities are directly
and indirectly able to prevent the emissions and ensure infrastructure
and services which will avoid climate change. Many examples of
practical action by local authorities are given in the documents
referred to. As the elected representatives of the local community
this action is a key role that is expected of local authorities
and a demonstration of their community leadership.
Local authorities are users of energy and so
shall be paying the levy, of course. In general, as large employers
there may be a net benefit from the NI reductions which will enable
better staffed services in the longer term. Councils can and do
manage their operations in ways that set an example and will reduce
CO2 emissions, and through many services and functions
are well-placed to influence and enable others to reduce their
impacts too. This includes the range of services where LAs have
a key part to play and these span the whole spectrum of services,
including planning, transport, economic development, consumer
protection, housing, education, environmental health, and the
new cross cutting issues like tackling poverty, and developing
a local agenda 21 strategy in partnership with the community.
As part of their energy strategies and LA21 work many authorities
are now switching to renewable energy tariffs too—so the
exemption of RE and CHP is particularly welcome and was pressed
for by the LGA as an essential element of consistency for the
Levy.
There are many areas where a key role is working
with the business community and many authorities have outreach
programmes and partnership initiatives to encourage businesses
to be more successful, efficient and to pursue environmental management
initiatives including managing energy and waste more effectively.
These initiatives are of growing importance and complement the
regulatory and inspection roles already fulfilled—indeed
they are in many cases a longer term strategy to prevent emissions
and pollution and to support thriving and competitive businesses
in their areas for a sustainable economy. This is discussed in
more detail below under the headings: impacts on local government;
opportunities for local government; uses of funds, and the future.
1. IMPACTS ON
LOCAL GOVERNMENT
The Levy will impact on a lot of LA buildings
like schools where there are high numbers of students (500) so
energy intensive but only say 30 staff actually paid for the NIC
rebate, so it won't be neutral.
Energy Strategies
DTI/DETR wrote to all Directors of Regional
Government Offices in August asking them to produce meaningful
Regional Renewable Energy targets. In order to do this there is
a need for local authorities to feed their own constraint data
into the process. Is this the first step towards Local/Regional
Energy Strategies?
We would like to see funds made available for
Local Authorities to link energy efficiency and renewables together
at the local and regional level through Energy Strategies. This
funding support would need to be ring fenced and not hidden in
the SSA and should be for the appointment of a new/temporary member
of staff or a contract for an Agency or consultants.
2. OPPORTUNITIES
FOR LOCAL
GOVERNMENT
LAs encompass a number of specific functions
that may play a part—for example EHOs may be required to
make assessments for Energy Efficiency under the Pollution Control
(IPPC) there will need to be training for this and assessment
tools (software based) which keep a level playing field. This
investment needs to come from somewhere.
Carbon Trading
However the option for Carbon Trading is something
that Las could really get into and trade off their savings for
real money. Some big companies may not be able to make major investments
on what they have achieved so far and would be happier to pay
for the savings to be made elsewhere. This option should be officially
recognised and registered now, or even approved by Government:
that Las are available for Carbon Trading.
Demonstration buildings
Local Authority buildings are, as stated in
the Climate Change Consultation, sited in highly prominent positions.
These buildings being well known land marks of every town and
city in the country should be used as the platform they are, to
encourage renewable energy technologies and implement best practice.
Local Authority buildings offer an ideal stage for demonstrating
various technologies where people can see them in action, become
more aware of renewable energy technologies. A scheme in Germany
could be replicated in this country; it is the 100,000 Roofs Solar-Power
Programme. The Government in conjunction with Shell and another
company are offering interest free loans for up to 12 years for
100 per cent of the cost of a photovoltaic system—open to
everyone. They have set up their own manufacturing base for this
project thus having a relatively secure market for many years
whilst it establishes a good market base, giving great job opportunities
that not only provide employment but develop skills and expertise
in a new and growing industry. Such a project could offer a great
opportunity to effect a change in people's perceptions and attitudes.
The 3.9 million homes that are scheduled to
be built from 1996-2021 should be built to a higher standard.
It is an issue raised many times that building regulations should
be improved to raise the Standard Assessment Procedure (SAP) rating
of new buildings. Why continue to build problems for the future—it
is not sustainable. Training should be provided to increase the
skills within the architectural and design industry to innovate
and replicate best practice, incorporating energy efficiency as
an integral part of new build design. Also to develop techniques
of including energy efficiency principles in old buildings at
low cost when being refitted. If objections to using energy efficiency
in new build exist in the building industry—cost may be
cited as a reason—some funds could be used as grants for
energy efficient building materials or a tax reduction so that
the cost of the building is not dramatically increased or in fact
reduced so as that best practice is encouraged. The new build
homes should include all aspects of best practice wherever possible.
This should be the case particularly where they are to be in clusters,
as new estates for example, where building design is included
with site design eg building orientation and window size. Combined
Heat and Power and renewable energy projects should be encouraged
in these "cluster" communities, to maximise the opportunity
of building the infrastructure required when a new one is to be
designed and constructed anyway.
3. USES FOR
FUNDS RAISED
THROUGH THE
CLIMATE CHANGE
LEVY
The funds from the Climate Change Levy need
to be distributed effectively between four key areas—energy
efficiency, renewable energy, infrastructure and support, and
research and development. All these areas need to be considered
and a balance between them formulated. Some brief comments on
possible utilisation of the Levy from a local authority perspective
are included.
Looking at the CC Levy in its widest sense:
what should be done with the £150 million (or whatever is
agreed) and how Local Authorities can help to target spending
in the most effective way: What should be done with £xy?
There are many competing demands for this particular
cake and even more suggestions as to how much should be siphoned
off the CC Levy for reinvestment in the energy sector. The most
likely runners would appear to be Energy Efficiency in SMEs (especially
manufacturing SMEs where the NI rebate is likely to be small compared
to energy costs), CHP and Renewables.
Energy Efficiency in SMEs
A particularly difficult area but one which
has probably caused considerable concern in Government before
the Levy was introduced. Experience shows that national delivery
of information hotlines and other programmes will not work. There
are many examples where local initiatives do, however, work. This
is a key area where many Las are already active. What most small
businesses need/want is a locally focused service which identifies
energy saving opportunities and manages the process of change
on behalf of the managers. This could be capital investment or
change in working methods/good housekeeping. Managers do not have
time for contract management on top of their daily routine.
Local authorities as part of local partnerships
can facilitate the provision of such services and many do. There
are two, for example, in Shropshire—Marches Environmental
Business Partnership and Oswestry Powersave Project. Both are
very effective but are run on a shoe string. CC Levy could be
used effectively to properly fund this service and provide substantial
grants for capital improvements.
One option to stimulate practical action is
if contributions to the levy could be offset by funding energy
efficiency investment. Approved schemes could be on from a schedule
of measures that could be audited for simplicity. Alternatively,
perhaps a link to DETR's "site specific surveys" (when
they have the detail) could determine an approved way of investment
in suitable schemes and demonstrate "joining up" across
government programmes!
CHP
There are lots of good awareness raising projects
around to encourage single businesses to install CHP where it
is cost effective. One area where investment would be beneficial
is in feasibility studies for multiple beneficiary CHP. It is
unlikely that such "mini district heating" schemes would
get off the ground without external investment and the role of
a partner like the local authorities who own and manage many local
estates that would benefit from improvements. This could work
on an industrial estate or sub-estate level using either fossil
or renewable fuels. Opportunities could be available for LA buildings
to be included in such schemes. In other cases, with appropriate
powers, local authorities are the body with a strategic view that
could plan city centre schemes with many users involved.
Funds could be utilised to investigate and implement
Local Authorities being given the "powers of competence"
to provide energy services through Energy Service Companies (ESCO).
There are many councils which have felt the noose of the legal
constraints placed on local authorities when trying to deliver
sustainable, best value energy to the local community, where revenue
can be circulated back into renewable energy projects, whilst
tackling fuel poverty through cheaper community heating to provide
energy services to a high standard. ESCO's could go further than
just supplying energy but would involve home surveys, referrals
to energy efficiency improvement schemes such as the Home Energy
Efficiency Scheme (HEES) and advice on improving efficiency.
Renewables
Will be particularly badly hit by the Electricity
Trading Reforms as has been admitted by the DTI following their
environmental appraisal of their new policy (ENDS Report 297 October
1999 Page 47). The double whammy is the proposed mechanism for
replacing the NFFO (not yet finalised by DTI and still confidential)
which would be in the form of a percentage obligation on electricity
suppliers but with a price cap (this could also have a sub-obligation
to include electricity from a range of non mature technologies).
There may also be a more traditional NFFO support mechanism for
certain technologies. This would benefit the cheapest mature technologies
but may result in near market and longer term technologies being
abandoned. The price cap would mean that the type of smaller scale
locally focused projects promoted in the LGA position paper would
also be severely disadvantaged.
A particular area that attracts much blame for
failed renewable energy projects is attributed to the planning
profession. The Nottinghamshire and Derbyshire Local Authorities
Energy partnership recently had their second seminar and workshop
to address the issue "planning for more renewable energy"
to make planners aware of different technologies, address issues
that are particularly related to planners, show them best practice
information that exists now, case studies and general information
to help them understand the issues of climate change. It was felt
that planners need to be given new policy or guidance on how renewable
energy should be addressed and that they didn't have the tools
in place to deal with many renewable energy projects.
Training and seminars are needed for those involved
in constructing renewable energy projects so that they can begin
to address one of the major problems of community resistance.
If these people knew how to effectively involve the local community
from an early concept stage, there would be less opposition to
many projects. Case studies have shown that when communities are
involved from an early stage their acceptance and understanding
of the project is heightened and the project company has the opportunity
to address some of the communities fears and maybe come to some
mutually acceptable compromise at an early stage in order that
the community feels they have some ownership of the project and
overcome many of the barriers of resistance experienced.
Many renewable energy projects do not materialise,
whether it be through no planning permission or community objections.
For some organisations project after project are not successful
with an average one in ten succeeding, there is a tremendous drain
on funds from preparing funding bids, application, assessments,
involving the community etc. Funding would be provided to help
with the project development of renewable energy such as the case
with Combined Heat and Power projects through the Combined Heat
and Power Association. Funding for project development would encourage
more projects anyway giving more people the opportunity to develop
ideas.
There is therefore a need for other money to
be made available to support development and market testing of
new technologies and the use of renewables for heat and transport.
DTI Renewable Energy Technology Advisory Committee believes that
this will need to be at least £20 million to have an impact
(even then it would be small).
Local authorities, again working in partnership,
could act as a catalyst for such actions at a local level. This
would be particularly important for small scale community type
projects. The energy Agencies or similar bodies would be a good
vector for this action. One Energy Agency, for example, supported
by their local council, is already managing "Evergreen"
the National Power (Energy Co) Ltds's eco-fund and guiding developers
on a range of specific local projects.
4. THE FUTURE
Any future increases in the Levy should be ring
fenced for reinvestment in improving the energy efficiency of
businesses. There is a case that the Levy should (subject to political
will) be extended to the domestic sector (with appropriate protection
for disadvantaged groups and a commitment to eliminate fuel poverty
too) and all the benefit directed at capital grants for improving
the energy efficiency of all sectors of the housing stock.
Funding needs to be channelled into awareness
campaigns. Energy efficiency is not a subject that grabs the headlines
or peoples attention very easily, thus requiring a lot of marketing
skill, to market efficiency effectively. The "Are You Doing
Your Bit" campaign has gone some way to addressing this problem
by trying to make environmental issues fun and interesting. In
the Climate Change consultation report is states that new social
norms and values need to be created and that public awareness,
understanding and action is vital to the success of any climate
change programme. This is a matter that has been addressed before
and is possibly one of the hardest aspects of any climate change
programme, to effectively influence the everyday lives and culture
of a nation.
Monitoring and measurement is required to establish
where we are today, establishing a baseline to structure future
programmes and strategies on. This requires some help from the
utilities and other bodies, through releasing information eg energy
used postcode area, house surveys when selling a property. A national
if not international means of assessment and monitoring needs
to be established for an integrated climate change strategy and
so that accurate data can be collated.
Funding should be channelled into the transfer
of academic knowledge into industry, opportunities are missed
due to links not existing. For example an MSc student's project
could be to research the production of polyester from biomass
yet their findings might never reach industry. In the East Midlands
the Midlands Renewable Energy Technology Transfer (MRETT) that
is largely funded from personal resources for the establishment
of such linkages to get ideas into action.
Funds could be provided to Local Authorities
to support the work of energy and local agenda 21 teams so that
local authorities can maximise the benefits of a climate change
levy by seizing the opportunity. Local authorities could play
a significant role in the new climate change programme by offering
best value, impartial advice that can optimise linkages to other
initiatives, projects, networks, grants and act as a central co-ordinating
point for advice, information, action, monitoring and measurement
whilst at the same time giving the programme a strategic context
at local, regional and national level to develop a well co-ordinated
framework of action.
In conclusion, Local Authorities have a major
part to play in the Climate Change programme. The Climate Change
Levy offers a major opportunity to "turn the tide" on
energy efficiency. The Levy will mean that energy efficiency in
many cases will be discussed in the boardroom for the first time,
where the key decision makers actually seriously consider energy
issues. Money raised from the Levy if used in a structured and
co-ordinated manner could offer many benefits in reducing carbon
dioxide emissions and other greenhouse gases.
Money should be directed primarily into addressing
energy efficiency, helping those businesses effected, to review
their energy use and make improvements. Local Authorities can
play a major role, offering best value, impartial energy efficiency
assessment and advice to businesses whilst at the same time give
a strategic overview to work being carried out under the climate
change programme. Local Authorities also have the networks and
knowledge to provide effective "linkages" to other initiatives,
groups, partnerships so that whether it be District, County or
Regional level a co-ordinated framework can be efficiently utilised
that will give an all encompassing strategy.
For example some councils have set their own
CO2 reduction targets, higher than that of national
ones and to accompany this there is a policy statement and a strategy
for how this can be achieved.
When the draft climate change strategy is released—in
the new year?—many councils, amongst others, shall be reviewing
it carefully along with their own strategies to ensure that a
co-ordinated framework exists with the national strategy.
Funding should be channelled into a variety
of areas particularly education, awareness, skills, training and
providing the tools required by people to tackle climate change.
November 1999
| 
