Has Devolution left Net Zero in Limbo? How uncertainty has stalled progress in local net zero delivery.

The UK’s transition to net zero has not been slowed by ideology or technology, but through indecision in how local government will operate in the future. Across England, local authorities that should be leading the charge towards decarbonisation are complete and utterly stuck in a holding pattern, waiting for clarity from central government on what the next generation of devolution deals will actually deliver and what is expected from this newly emerging form of local/regional government.

Instead of empowering local climate action, the current process is creating paralysis: councils cannot plan, invest, or attract private capital without knowing their long-term powers, responsibilities, and revenue frameworks. This is particularly true for district and borough councils who will cease to exist in their current guise. The result has been a creeping stagnation that is still resulting in a slow down in approving local net zero projects at a time when they should be accelerating.

The Promise of Devolution (and the Reality of Delay)

When ministers speak of “levelling up” and “empowering regions,” the rhetoric is persuasive. Devolution, we’re told, will bring decision-making closer to communities, give local leaders the flexibility to innovate, and accelerate climate action through place-based solutions.

In practice, however, the devolution agenda has become a slow and fragmented negotiation process, producing uneven powers, opaque funding arrangements, and a sense of uncertainty that, as winter approaches, is freezing progress.

• Over half of English local authorities are either negotiating or awaiting confirmation of new devolution settlements.

• Yet few of the current deals include clear provisions for climate or net zero delivery, and almost none establish dedicated funding frameworks for energy, housing retrofit, or green infrastructure.

• The Department for Energy Security and Net Zero (DESNZ) and the Department for Levelling Up, Housing and Communities (DLUHC) have not aligned timelines or objectives, leaving local areas caught between competing priorities.

Instead of clarity and empowerment, local government has been left in limbo. It is unsure about the powers it will have, how much funding it will receive, how they should engage with private investors or lender and how to structure investment pipelines for decarbonisation projects.

The impact is going to be felt even longer for the local authorities that have yet to start devolution discussions. Will district and borough councils continue to invest in energy efficiency, renewable generation when in all likelihood they will cease to be in existence within the relatively near future?

Local Authorities want to decarbonise

Councils and combined authorities have already shown that when empowered, they can deliver, they want to deliver local net zero action, such as:

• The West Midlands Combined Authority has developed an £8 billion Net Zero Investment Prospectus.

• The Greater Manchester Combined Authority has established an Energy Innovation Agency to accelerate retrofit and clean energy deployment.

• Hundreds of councils have declared climate emergencies and published ambitious local net zero plans, with many net zero dates well ahead of the national 2050 target.

Yet without clear devolution frameworks that provide a more concrete delivery mechanism for net zero and wider climate action, these plans can’t move to delivery. Financial and operational uncertainty makes it impossible to secure co-investment or engage confidently with the private sector. Why is the government so reluctant to provide devolved authorities with specific statutory powers on climate change, providing them instead with an "opt-out" of climate action. Surely they can see that this is counterproductive.

This stasis is now pervasive: feasibility studies stall, supply chains aren't used to their full (or even partial) potential, and investors lose patience. The cost isn’t just measured in delayed carbon savings, it’s lost jobs, foregone innovation, and communities left behind in the transition.

It doesn't need to be like that.

The Funding Fog: A system built for short-termism

Local authorities cannot deliver long-term transformation on one-year funding cycles and competitive grant rounds. Yet that remains the status quo. It needs to change and devolution provides the perfect opportunity to instigate that change.

• The UK Shared Prosperity Fund, the Public Sector Decarbonisation Scheme, and the Local Net Zero Accelerator pilots all provided limited-term, bid-based funding.

• Each scheme has different eligibility rules, reporting requirements, and timetables. In practice, this means councils spend more time chasing funds than delivering outcomes.

• Crucially, there is no clear link between devolution settlements and access to private capital. Councils are told to “unlock investment,” but without predictable revenue streams or borrowing powers, they cannot structure viable finance models.

Yet, the government’s current failure to reform fiscal rules or enable councils to borrow against net zero assets has shut off billions in potential private finance. A 2020 report by UK100 estimated that local energy systems could leverage £100 billion over the next decade if financing frameworks were reformed e.g., through greater private-public partnerships. There has been very little movement on this front over the last 5-years.

Not Enough Powers, Not Enough Vision

Criticism of the government’s approach is growing. The Local Government Association, IPPR, and the UK Climate Change Committee have all warned that current devolution deals are too limited to drive the scale of transformation required.

The deals often focus on transport or skills, but fail to grant local powers over key levers of decarbonisation — including energy generation, retrofit coordination, or local taxation.

Without: statutory duties to plan and deliver net zero; fiscal freedoms to borrow and invest; and integrated regional governance to align housing, energy and transport;

local government remains a delivery arm of central policy, not a partner in national transformation.

This centralisation is self-defeating. Climate change is experienced locally e.g., through heatwaves, flooding, housing conditions, and energy poverty. But the current tools to address these impacts remain locked in Whitehall, administered through short-lived, competitive programmes that only benefits those who are successful in securing funding.

Devolution Done Differently: Three Steps to Restart Delivery

If government is serious about empowering local net zero delivery, it must move beyond rhetoric and reform the architecture of devolution itself.

1. Create a Statutory Duty for Local Net Zero Delivery

   • Require every local and combined authority to produce a Local Net Zero Plan, integrated with spatial and economic strategies.

   • Back this with multi-year funding settlements and defined accountability mechanisms.

2. Reform Fiscal Rules to Unlock Private Capital

   • Allow councils to borrow against long-term energy and infrastructure assets.

   • Enable the creation of local climate investment vehicles that can blend public and private finance without breaching debt caps.

3. Embed Climate Powers in Devolution Deals

   • Make net zero and environmental resilience core elements of every new devolution settlement.

   • Align DESNZ, DLUHC, and the Treasury under a shared framework that supports regional climate investment and skills programmes.

These steps would finally give local authorities the clarity, capital and confidence to move from strategy to delivery.

A Moment of Decision

The irony is that devolution was meant to accelerate net zero, however in its current form, it’s slowing it down. Instead of empowering local leaders, the process has created a fog of indecision that leaves projects stranded and investors uncertain. It takes away any urgency and stops decision makers having to make decisions. It becomes something that can be dealt with down the line,

If the government continues down this path, the UK risks a wave of local authorities missing their 2030/2040 net zero targets, providing further fuel to an already growing political storm against the agenda and sadly hollowing out the very local capacity needed to deliver them.

Devolution should be the engine of the net zero transition. Instead, it has become its waiting room. Until that changes, local climate action will remain stalled in uncertainty while the clock on carbon neutrality keeps ticking.