Supporting local authorities with the transition to net zero

Lorna Pimlott, Local Authority Managing Director at the UKIB, details how the Bank has evolved its support for local authorities in the face of current economic challenges, offering independent advice alongside the lowest lending rate.

Local authorities have set ambitious targets for local infrastructure investment in support of net zero and driving long-term local economic growth. With 30% of UK greenhouse gas emission reductions relying on local authority involvement, including decarbonising buildings, greening local transport, and generating more renewable energy, it’s clear that councils and combined authorities are central to delivering a successful transition to net zero. But it is no secret that many local authorities are developing and delivering their infrastructure plans in an increasingly challenging economic context.

Delivering the infrastructure investment required to achieve net zero requires sustained vision and leadership from local authorities, sufficient resources, access to commercial, technical, project management and, of course, financial expertise. Set up by HM Treasury in 2021, the UK Infrastructure Bank can provide this support and act as a critical friend to local authorities.
Our offer is clear: 

1)    UKIB has £4bn of lending capacity to provide the lowest cost source of finance for local authorities on flexible terms.

2)    The Bank provides independent, financial and commercial advisory services at no charge. 

In response to mounting economic pressures, our lending rate was also reduced by HM Treasury to gilts +40bps, ensuring that UKIB has the lowest cost finance for local authority infrastructure projects.

To date, the Bank has completed 18 advisory engagements and four lending deals totalling over £600m. Through many of these engagements and our wider conversations, we have found that authorities are experiencing a combination of challenges in relation to resourcing constraints, introducing new technologies alongside existing infrastructure, developing innovative new funding models and identifying how to maximise the value of partnerships with the private sector. 

This is where we can help. We have built a team of experienced individuals from across the private and public sector to provide advice on financial and commercial challenges. We are working with local authorities across the UK on common challenges such as identifying how projects can be delivered on an ‘invest to save’ basis or through partnership with the private sector. 

The Bank recently provided advice and support to Bristol City Council with its City Leap project, a joint venture with Ameresco which aims to deliver around £500 million of low carbon energy infrastructure by 2028. UKIB helped the Council develop its thinking and governance arrangements to maximise the impact and benefit of the private sector partnership.

Partnerships like these can help local authorities find the most effective way to finance and structure the major infrastructure projects that will enable more people to enjoy the regional and local economic benefits of the net-zero transition.

UKIB can play an indispensable role in helping local authorities make their net zero ambitions a reality. We want to help. If you would like to discuss your infrastructure project and explore how UKIB may be able to help, we’d encourage you to get in touch. 

Find out more here: Local authority services | UK Infrastructure Bank (ukib.org.uk)