How could our Councils raise money for Climate Action?

Last week I explained how our local Councils are way behind on their plans to reduce emissions. As austerity continues to bite they have no funds to put this right. Since 2010 Sheffield Council has lost 29% of its funding in real terms, representing a fall of £828 per dwelling. Zahira Naz, Finance Committee chair, said: “We and other councils have had our budgets hammered by cuts from central government over the last 13 years. In Sheffield, we’ve been vocal about that and will continue calling on the government to step up and provide fairer funding. Demand is rising as funding plunges – there are no easy decisions left to take.”

One would hope, with a General Election on the horizon, that there would be some light at the end of the tunnel. But there are no promises from Keir Starmer that Labour will bring an end to austerity. If our Councils are going to take a lead it is clear they will have to find the finance themselves. How could they do this? There are no easy solutions but we can learn from other Councils who have benefited from measures like the Workplace Parking Levy and Climate Bonds. 

A Workplace Parking Levy (WPL) is a tax levied by the council on businesses for each parking space they offer for staff use. The policy was implemented by Nottingham City Council in 2012 where workplaces with over 11  spaces are now charged. Some employers will pass this charge on to their employees, others do not, and some pass on a proportion of the cost based on salary. It is one of the few revenue-raising tools available to local authorities. Implementing the policy requires consent from the Secretary of  State for Transport. As of January 2023, Nottingham is the only council to have a WPL, but many others have explored it, including Leicester and Edinburgh. Sheffield Greens are keen to implement it in Sheffield.

WPL tackles congestion in two ways. It gives employers an incentive to reduce their parking provision and it helps to fund major transport infrastructure. It’s a great way to support the least well-off who can’t afford cars. 

In Nottingham, the charge only applies to employers who provide 11 or more parking spaces. Smaller employers are exempt, as are spaces for disabled people, NHS premises and emergency services. The current charge per parking space is £428 a year, payable by the employer. All revenue raised from Nottingham’s levy is ringfenced by law to be spent on improving local transport.

Nottingham has one of the UK’s strongest public transport systems. This is mainly thanks to its workplace parking levy.

Friends of the Earth say WPL has enormous benefits. It has reduced emissions (7840 tonnes of CO2 by September 2021) and contributed to a 33% fall in emissions since 2005. 15 electric buses have been paid for by the levy. 

£83 million of revenue was raised directly from the levy, and this pulled in a further £600 million of spending from outside sources. This £600 million has funded a major extension of Nottingham’s tram network, a £60 million renovation of its train station, the expansion of the city’s electric bus fleet, and £500,000 in grants to help employers make sustainable transport options available for employees. A 17.5 km tram extension part-funded by the levy carries 20 million passengers a year.

You might expect businesses to oppose such schemes, but it is actually in their interests. Before the levy, congestion was estimated to cost Nottingham £160 million a year, with most of this cost borne by business. Therefore, employers were set to directly benefit and even make savings. Recent data crunching from Tom Tom found that Sheffield is the sixth slowest city in the UK where it takes 20 minutes to travel just 10km. Alleviating that congestion will have massive financial benefits for Sheffield’s businesses. 

When Leicester consulted on introducing a Work Place Parking Levy, Unite the Union led a campaign against it, and it was eventually scrapped. Unite were concerned the levy would be passed on to their members. But if you think about it most business car parks are for the managers, not those on the bread line. 

At a time when many Councils are going bankrupt, the Work Place Parking levy could be an important boost to our failing public transport systems. 

Another way for Councils to raise finance for Climate Action is by issuing Climate Bonds. 

Through Local Climate Bonds, councils can raise funding that can be ring-fenced to reduce emissions from the energy, transport and buildings in their area. Anyone can invest – individual or organisation – and the minimum investment amount is £5.

Warrington and West Berkshire Councils were the first in the UK to pilot this approach, each raising £1m in 2020. Since then six more councils have issued bonds, namely Islington, Camden, Cotswold District, Telford and Wrekin, Westminster and Lewisham.

These eight councils have raised £6.4m to invest in energy efficiency improvements for buildings, nature restoration, renewable energy and electric vehicle charging infrastructure.

The Green Finance Initiative estimate that local authorities could unlock £3bn in green investment for their communities by developing and launching their own Local Climate Bonds.

As the local elections approach, ask your Councillors if they are willing to implement such schemes.