Councils want to prioritise retrofits to combat energy costs, but face funding gap

58% of councils believe that efforts to rollout energy and retrofit measures are being impacted by budget shortfalls.

A survey of more than 500 councils across England and Wales on behalf of construction company Willmott Dixon found that councils are facing unaffordable energy bills unless measures are taken to improve the energy efficiency of public buildings.

The survey found that 44% of councilors believe that retrofits are required to decarbonise their building stock to counter rising energy costs. In total, 15% feel that their public buildings will be unusable without action.

While 82% of respondents claim their local authority has a plan in place to help deliver net-zero commitments, 58% believe that efforts to rollout energy and retrofit measures are being impacted by budget shortfalls.

Willmott Dixon’s head of decarbonisation Jo Mills, said: “This is a stark wake-up call of the enormous challenge facing the public sector across the country to decarbonise and meet net zero. With warnings from almost half of councils that the situation is so serious they may not be able to keep the lights on, time is rapidly running out for many local authorities to get a viable plan in place to ensure their public buildings remain fit for purpose.”

“It’s hard to believe that a year on from the pledges made at COP26 in Glasgow, more than half (56%) of councillors are still unsure what their budget is for retrofitting and decarbonising their estates. There is no doubt that funding remains a huge barrier to this vital work being carried out, leaving many councils struggling to remain on target to meet net zero.”

In total, 30% of councillors listed retrofitting and decarbonising as their top priority for infrastructure projects, but 56% are unaware of what budget they have to carry out changes.

Figures from the Local Government Association (LGA) suggest that councils will face a £3.4bn funding gap next year, rising to £4.5bn the year after. Separate research from the Government places the cost of decarbonising public buildings in the UK at £25-30bn.

Net-zero concerns

A separate survey of decision-makers at 50 local authorities in the UK found that most have not begun properly delivering their net-zero transition plans on the ground, with funding constraints being the most common barrier to progress.

Conducted by property consultancy Cluttons and sustainable design consultancy AESG in March 2022, the survey assessed progress to date, future plans and likely challenges to the net-zero plans of councils.

Just one-quarter of the council representatives classed their employer as being properly into the ‘delivery’ phase of their net-zero strategy.

When the survey respondents were asked about the biggest challenges to delivering their council’s net-zero ambitions, 71% said that financing constraints were the biggest challenge. Rounding out the top three most commonly-cited challenges were a lack of in-house skills and a lack of resources.