The Local Net Zero Gap: Why it is time for the Government to radically rethink its engagement approach with local authorities

There’s an uncomfortable truth at the heart of the UK’s net zero transition: Whitehall is still talking in strategies, while local government is struggling to deliver in reality. Despite years of policy papers, funding pots and fanfare, the gap between national ambition and local implementation is widening.

Local authorities, the very organisations tasked with decarbonising housing, transport, energy and waste systems, remain underpowered, underfunded, ill-equipped, understaffed and structurally sidelined. Ministers talk of “local delivery” yet continue to design frameworks that keep councils dependent on short-term competitive grants and disconnected from the fiscal tools they need to act.

It’s another piece of the jigsaw that is lacking, which threatens to derail the UK’s net zero goals and undermine confidence among investors, developers and communities alike.

The Great Disconnect: National Vision, Local Frustration

Net zero delivery is inherently local. Heating systems, building retrofits, EV charging networks, renewables on public estates — all depend on local leadership, planning and coordination.

Yet, as it stands:

• There is no statutory duty for local authorities to plan for or deliver net zero outcomes. Climate action remains largely voluntary, leading to patchwork ambition and inconsistent delivery.

• Devolution deals — heralded as a new era of local empowerment — have failed to embed climate and net zero responsibilities meaningfully. Many agreements mention sustainability only in passing, with no binding targets or resourcing frameworks.

• Funding remains fragmented and short-term. Councils must compete for dozens of unaligned pots — from Heat Network Zones to the Public Sector Decarbonisation Scheme — each with different metrics, timelines and administrative burdens.

• Local fiscal powers are weak. Councils cannot borrow flexibly or retain the returns on their net zero investments, making long-term project finance almost impossible without central approval.

The result? Even the most ambitious local authorities are forced into small, disconnected projects rather than strategic area-wide investment programmes that are of the scale that would attract private capital. So, making full use of an analagy, local authorities are being asked to run a marathan, but are only being given enough training to complete the first mile...

The Missing Enablers: What Local Net Zero Actually Needs

The problem isn’t a lack of local will or technical capability. It’s a systemic failure to provide the three enablers that actually matter...clarity, capital, and coordination.

If the Government could instigate chance that would help to accelerate the pace, scale and financing of local net zero delivery then three reforms would do more for net zero than any new pipeline to the North Sea.

1. A Statutory Duty to Plan and Deliver Net Zero

Every local authority should have a legal obligation to produce a Local Net Zero Delivery Plan, integrated with spatial, transport and housing strategies.

• Backed by multi-year funding settlements, this would create clarity of purpose, measurable accountability, and confidence for investors.

• It would move local climate action from discretionary to statutory — the same footing as housing, education or public health.

• Councils could finally plan long-term decarbonisation programmes instead of chasing short-term bids.

This is how you build institutional stability — and signal to the market that local delivery is a national priority, not a peripheral aspiration.

2. Reform Fiscal Rules to Unlock Investment

Current Treasury rules treat local climate investment as debt, not as productive capital with future returns. This is outdated thinking.

• Allowing councils to borrow against net zero assets and revenue streams — from solar farms to EV infrastructure or heat networks — would transform capacity overnight.

• With minor reforms, local government could unlock up to £100 billion in private finance over the next decade, using prudential borrowing, green bonds, and blended finance models.

• This is not about new public spending, but smarter financial design that reflects the real asset value of decarbonisation projects.

Without reform, councils remain unable to co-invest in the very projects national policy depends upon.

3. Create a Local Climate/Net Zero Infrastructure Agency

Most councils lack the technical, financial and commercial expertise to structure complex net zero projects. The private sector wants to invest, but there’s no single pipeline or aggregator to connect them.

A Local Climate Infrastructure Agency (LCIA) would fill that gap (perhaps this is the role of GB Energy and the Net Zero Hubs will ultimately fill):

• Acting as a national hub for aggregation and standardisation, bundling local projects into investable portfolios.

• Providing shared technical expertise, standard templates, and due-diligence support, reducing transaction costs for investors and councils alike.

• Working with the National Wealth Fund, GB Energy, pension funds and impact investors to match capital with local need.

This would professionalise local climate delivery and turn scattered initiatives into a coherent national programme.

The Case for Reform: From Central Control to Local Delivery

The irony is that the Government doesn’t need to spend much more to achieve this, it just needs to spend smarter and devolve better.

At present, the UK is pouring billions into headline projects (think CCS to hydrogen) while the delivery systems for local net zero remain chronically under-tooled and under-thought. The problem is not a lack of money, but a lack of governance architecture that translates ambition into bankable projects at the local level.

Without reform, we risk another decade of stop-start delivery: big national pledges, slow local progress, and a widening credibility gap between rhetoric and reality.

A National Imperative

Local authorities are the front line of net zero, they act as the bridge between policy and people. But that bridge is buckling under the weight of national inconsistency, for example, local authorities are under enormous pressure to approve new housing developments that are far, far, far from achieving net zero standards in a bid to achieve ridiculously high housing targets.

If we are going to drive green growth, improve energy security, and create long-term jobs, the Government must finally give local government the powers and fiscal tools to deliver decarbonisation at the scale that is clearly needed. There is a need to make the waters around what is expected locally a little less murky and align with national decarbonisation movements.

Because right now, the UK doesn’t have a local net zero problem, it has a central government problem. And until that changes, the transition will remain an ambition on paper, not a transformation in practice anywhere in the UK.