Kim Burley Jones asks the following seven questions on behalf of the Climate Action Leicester and Leicestershire Group:
a) Since in order to both reduce greenhouse emissions, and to ensure the housing continues to be fit to live in as climate change takes hold you – and every other council - needs to deep-retrofit all the council housing stock, please would you tell us what you are doing as a council to find funding to deep-retrofit and/or externally insulate all your council housing in the next 5 years?
Specifically,
b) Would Leicester City Council consider using Section 106 to raise funds from housing developers as Milton Keynes does with a charge for each tonne of carbon emissions in new building first year of life to fund energy efficiency?
c) Have you considered using municipal or social impact bonds such as the Brummie Bond in Birmingham?
d) Would you consider working with the Leicestershire County Council Pension Fund (which includes Leicester Pensions) to get them to invest a small proportion – maybe 3 to 5% of the fund – in deep retrofitting locally (at the same time as getting them to divest the £200million they have currently invested in fossil fuel companies), as with the Greater Manchester Pension fund?
e) Are you using, or do you have plans to use money from the Public Works Loan Board for climate activities?
f) Would you consider raising council tax on higher band properties to raise money for a climate action fund as Warwick District council is considering?
g) Finally, if you are seeking funding for external insulation and/or deep retrofit, please would you tell us from where and in what timescale?
The Monitoring Officer to report on any further questions, representations or statements of case received in accordance with Council procedures.
Minutes:
Kim Burley Jones was present in the virtual meeting and asked a number of questions to the Housing Scrutiny Commission on behalf of Climate Action Leicester and Leicestershire Action Group:
Question 1:
Since in order to both reduce greenhouse emissions, and to ensure the housing continues to be fit to live in as climate change takes hold you – and every other council - needs to deep-retrofit all the council housing stock, please would you tell us what you are doing as a council to find funding to deep-retrofit and/or externally insulate all your council housing in the next 5 years?
Response to question 1, provided by Director of Housing:
“As a division we have been carrying out energy efficiency improvements to our stock as part of the annual capital programme for some time now, fitting energy efficient boilers, low energy LED lighting, insulating lofts, upgrading the insulation when we renew external cladding etc. and specify energy efficiency measures into our specifications for all of our work areas if we can.
In the past we have successfully secured match funding and part funded several large retro fit schemes of external wall insulation and solar PV across the city as park of previous CESP and ECO schemes and these have proved hugely successful. Unfortunately match funded opportunities are no longer available but we are always on the lookout for schemes that would help us do more.
However, in light of the council declaring a climate emergency we are now looking more closely at what we do and how we can move more quickly to a zero-carbon strategy. We have recently set up a working group to specifically look at our existing stock and what retro fit might look like, and we are looking to extend this to include external organisation and experts.”
Question 2:
Response to Question 2, provided by Director of Planning, Development and Transportation:
“The City Council is committed to develop ambitious and innovative new policy in respect of energy efficiency in the new Local Plan. To inform this, officers in the Planning Department have already reviewed exemplar policies of innovative sustainable design and construction and low-zero carbon technology policies in other local plans, not just at Milton Keynes, but also other authorities including Reading, Brighton and Hove, Bristol, and Greater Manchester. This review has informed the commissioning of a comprehensive consultant study to advise on the optimal local plan policy choices available to the city. This study will include the potential for offsetting approaches and potential candidates for sustainable infrastructure or mitigation investment including energy efficiency.
However, all policies seeking to require s106 funding will however need to pass a ‘whole plan’ as well as a ‘site by site’ viability assessment. Current assessment shows limited viability levels in the city (especially on brownfield land sites) so there will need to be a substantive prioritisation exercise between various policy objectives over the relatively limited amount of s106 funding income projected (balancing such requirements as affordable housing, education, transport, biodiversity, sports/open space and climate investment aspirations). In addition, any proposed policy need to also pass the test of being related to the generating development under the definition of the Community Infrastructure Regulations.”
Supplementary question, asked at the Housing Scrutiny meeting:
You mentioned the commissioning of a consultancy, is this leading to a report and does it have a deadline or target date for findings?
Response to supplementary question, provided by Director of Planning, Development and Transportation (following the meeting):
The consultants will provide a report, and this will include recommendations for policies in the new local plan. A final report is expected to be published by June 2021.
Question 3:
Have you considered using municipal or social impact bonds such as the Brummie Bond in Birmingham?
Response to Question 3, provided by Director of Finance:
“The Brummie Bond was raised from institutional investors in 2017. Birmingham obtained £45m at a rate of 2.36%, 0.4% below the PWLB rate at that time. We would have no need to borrow in this manner, because we can use our investment balances in lieu of borrowing (a significant part of these balances have been set aside by law to repay borrowing, but we can use them in this way because repaying debt is prohibitively expensive). We would only lose around 0.5% in interest but would still need to repay the “debt.” The real issue is the need for a business case that would enable us to build at no revenue cost to ourselves. In the case of council housing, because rents are below market levels, we can only afford to build if 50% of the cost is met from other sources.”
Question 4:
Would you consider working with the Leicestershire County Council Pension Fund (which includes Leicester Pensions) to get them to invest a small proportion – maybe 3 to 5% of the fund – in deep retrofitting locally (at the same time as getting them to divest the £200million they have currently invested in fossil fuel companies), as with the Greater Manchester Pension fund?
Response to Question 4, provided by Director of Finance:
“We would be pleased to put a formal request to them from the scrutiny committee. Members of the Pension Committee have a fiduciary duty to safeguard, above all else, the financial interests of the Fund’s beneficiaries, though its Investment Strategy also explicitly states that responsible investment can enhance long term investment performance and investment managers will only be appointed if they integrate responsible investment into their decision-making processes. Note that the fund doesn’t directly hold £200m in fossil fuel companies, though it does have passive funds which will include them.”
Question 5:
Are you using, or do you have plans to use money from the Public Works Loan Board for climate activities?
Response to Question 5, provided by Director of Finance:
“This would not be necessary for the reasons given at question 3 above. If projects that pay for themselves can be developed, we can use our investment balances instead of borrowing.”
Question 6:
Would you consider raising council tax on higher band properties to raise money for a climate action fund as Warwick District council is considering?
Response to Question 6, provided by Director of Finance:
“Warwick District Council voted to increase council tax by 34% in 2020/21, in order to raise money to combat climate change. It was not targeted at higher tax bands – this is not legally possible, although conceivably an authority could use some of the extra income to bolster their council tax support scheme. A tax increase at this level requires a referendum to endorse it, and in the event Warwick could not hold one due to coronavirus. The tax increase was consequently withdrawn. In Officers view, a referendum would stand little chance of success. Since the Government required referendums to approve “excessive” tax rises in 2012, only one has been held. Central Bedfordshire Police’s referendum in 2015 to pay for more police was defeated by a vote of 2:1. If my memory is correct, they thought they would win based on earlier opinion polling. Referendums are costly (Warwick’s was reported to cost £300,000), and new bills have to be sent if the public votes for a lower increase.”
Question 7:
Finally, if you are seeking funding for external insulation and/or deep retrofit, please would you tell us from where and in what timescale?
Response to Question 7, provided by Director of Housing:
“We are always looking for match funding opportunities, in the past these have come from the energy companies as a way of them being able to meet their own carbon reduction targets. Unfortunately, these haven’t been available to us recently but we continue to monitor the situation. In the absence of any available funding any external wall insulation scheme and retro fit would have to be funded by the HRA, I can assure you that energy efficiently will continue to feature heavily in the HRA capital programme now and into the future.”