Manchester City Council’s section 151 officer talks to Mike Thatcher about net-zero targets, private sector investment and combating fuel poverty through sustainable housing.
[This article is part of a series of interviews with section 151 officers in partnership with CCLA Investment Management]
With numerous priorities to address – soaring inflation, budget cuts, growing housing demand and black holes in the funding for social care and special education needs – it would be tempting for councils to downplay the risks from climate change. Let’s deal with today’s crisis rather than worry about tomorrow’s, would be a perhaps understandable approach.
Well, that is certainly not the case in Manchester, where the council has established a net-zero target of 2038, “at the latest”, for both the authority and the city as a whole. This will require the halving of emissions by 2025, equivalent to annual reductions of 13%.
So far, Manchester City Council has invested £192m in its Climate Change Action Plan, which outlines what needs to be done. The funding has helped to update street lighting to greener LED bulbs, to retrofit council buildings so that energy consumption and carbon emissions are reduced and to replace diesel bin lorries with electric models.
It is a start, but there is a long way to go. The local energy plan for Manchester suggests that investment of £13.2bn will be needed to meet the 2038 target.
At the helm on this journey is Carol Culley, Manchester’s city treasurer and deputy chief executive. Culley, who was awarded an OBE in 2020 for services to local government, also chairs the council’s Zero Carbon Coordination Group, which drives change internally on climate issues and oversees the action plan.
I have been able to align the net-zero policy with how you use resources and make investment decisions. This has been really important in the approach we have taken.
Medium-term carbon strategy
“I always try to look three to five years ahead and work back from there. Otherwise, you would be so subsumed in inflation, adult social care and funding reforms that you would never be able to get your head above the parapet,” she says.
Culley admits that previously she would have been more comfortable talking about the impact of inflation than dealing with climate change. But she has become a passionate advocate of the carbon agenda, stressing that it needs to be “front and foremost in all our policymaking, all of our decisions and all of our actions”.
And she believes that having the section 151 officer leading on the issue internally helps to link policy requirements with the financial realities.
“I have been able to align the net-zero policy with how you use resources and make investment decisions. This has been really important in the approach we have taken,” says Culley, who will be discussing this issue at Room151’s Local Authority Treasurers Investment Forum (LATIF) and FDs’ Summit in London on 13 September.
So should the s151 officer be playing a lead role on net zero in all councils? “I think it is a replicable model,” she says. “Every local authority is different, but having the s151 involved is certainly helpful.”
Tough emission targets
There has been impressive progress across the council – with emissions falling by 13.2% in the 2019/20 financial year, 21.0% in 2020/21 and 10.6% in 2021/22. This was driven partly by the Covid-19 pandemic but also by the investments mentioned earlier, and has led to the authority “actively considering” moving its own net-zero target from 2038 to 2030.
However, the council is only 2-3% of the city’s total emissions, and Culley confirms that it is “behind where it needs to be” on the city-wide target. For Manchester as a whole, emissions fell by 2% in 2018/19, 3% in 2019/20 and 12% in 2020/21 (figures for 2021/22 are yet to be confirmed). The trend is clearly running below the annual reduction target of 13%, which now needs to increase.
Finding the funding for the transition will be crucial. The £192m spent so far has come from the council itself (£76.4m), central government (£65m), the Greater Manchester Combined Authority (£41m), the EU (£4.3m), partner organisations (£4.3m) and the Manchester Climate Change Agency (£1.1m). Much more will have to be found.
Take housing, one of the biggest areas of emissions. The council estimates that it will cost up to £400m to retrofit its own housing, but between £3.6bn and £6.8bn to undertake the necessary work on all of Manchester’s housing stock. This is a huge figure and it is difficult to identify a funding model when the benefits fall to the householder.
To deliver something on the scale and to the timeframe required will have to involve a mix of local authority intervention, place leadership and public-private partnerships. We need to explore how to make net zero more attractive to the private sector.
Public-private partnerships
Culley suggests that greater involvement of the private sector and innovative financing solutions will be required. Councils have worked with the private sector on innovative financing models in housing for some time, she points out, but a lot of zero-carbon projects are “new territory”.
She adds: “To deliver something on the scale and to the timeframe required will have to involve a mix of local authority intervention, place leadership and public-private partnerships. We need to explore how to make net zero more attractive to the private sector.”
An example of a successful public-private partnership is the completion of the Civic Quarter Heat Network, a shared heating system for prominent city-centre buildings. A 40-metre Tower of Light is the focal point of the network and has already become a Manchester landmark. The network was funded by a £2.87m government grant alongside local authority investment, and was built by sustainable energy solutions company Vital Energi, which will operate and maintain it for the next 30 years.
Manchester City Council has also been working with the UK Cities Climate Investment Commission (3Ci) to accelerate local net-zero investments. One possibility is a “place-based proposition” that could include a retrofit project that involves working with businesses and social housing providers in an area to modernise housing and regenerate the neighbourhood – including electric vehicle charging and tree planting.
“We are working with 3Ci on what a pipeline of investable propositions might look like. I think the appetite is there from the private sector and the willingness is there in the public sector to work in partnership. But it’s finding the right way of doing it. I am hoping that 3Ci will help us unlock that.”
Along with the private sector, the council will also need support from central government. But Culley highlights issues with competitive bidding that have been a constant bugbear of local authorities in recent years.
“Bidding processes almost set local authorities up against each other. It needs to be more streamlined – joining up the funding would make a huge difference.”
I think the appetite is there from the private sector and the willingness is there in the public sector to work in partnership. But it’s finding the right way of doing it.
Fuel poverty
Culley is also concerned that national politicians are not providing the required leadership on the climate issue. They too are facing pressure to focus on the cost-of-living crisis rather than address longer-term climate issues.
“There is a certain irony that never has the climate change agenda been so pressing. It has felt more real in terms of the unforeseen climate events this year and the fuel poverty agenda. But the policy is drifting away, rather than focusing on the here and now. The longer-term route to addressing fuel poverty has got to be around retrofit and sustainable housing stock.”
But with new houses still being built using gas boilers and to standards that inevitably mean they will require retrofitting in the future, she admits “we’ve got a long way to go to make all of this real”.
Culley is clearly deeply committed to the necessary transition in Manchester. So has her professional commitment to the climate change agenda led to any changes away from the workplace?
“I eat a lot less meat and I use a lot less heating. I drive a one-litre hybrid car. I’ve become more aware of the impact I have. And I spend lot of time on trains following my football team [Southampton]. It would be a lot quicker to fly, but I could never do that.”
Carol Culley will be speaking at LATIF and the FDs’ Summit on 13 September in central London.
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