Funding our Net Zero programme
Funding our Net Zero programme
The Net Zero funding challenge
Our Net Zero Newcastle: 2030 Action Plan is aspirational and wide-ranging, but the actions we can take will be determined by the funding that we have available, Government support and how innovative and creative we are in responding to the challenge.
Our cost estimates of the scale of investment required to deliver Net Zero by 2030 is £375m.
Whilst this cost may seem prohibitively high, there are other important considerations to take into account, such as:
- Many of the Net Zero projects require upfront capital expenditure to deliver longer-term operational cost savings.
The investment does not take account of these long-run cost savings.
- Often large scale capital programmes can leverage much larger amounts of private money which is invested into the city.
This will be a key priority for our funding of Net Zero projects.
- A capital spend of this volume delivers other benefits for the city by acting as a local economic stimulus. This in turn:
- Encourages new businesses to set up in the city by improving the city’s business attractiveness
- Drives inward investment into the city
- Retains existing jobs and creates new jobs for local residents
- Facilitates increases to local revenue streams for the city through business rates
- Enhances innovation and delivering funding for further infrastructure projects
The public sector in Newcastle faces extremely hard financial times with:
- A growing population
- Increasing demand for services (including social care, transport and education)
- Previous and ongoing budget cuts from the Government
- The immediate and ongoing economic challenges of the Covid-19 pandemic
"In delivering our Net Zero programme, we will continue to engage with other cities and programmes to ensure we learn lessons and follow best practice and to use benchmarking to maximise key metrics such as carbon reduction potential per pound spent."
Councillor Joyce McCarty
Deputy Leader of the Council and Cabinet Member for Resources
Looking beyond grant funding
We recognise that we cannot rely fully on grant funding and must look at alternative commercial funding streams to deliver our Net Zero commitment.
This may include incorporating energy costs into commercial and social rents, adopting Invest to Save models and establishing Public-Private Partnerships.
We will be open to using a mix of alternative commercial models and financial approaches for funding low carbon infrastructure and technology, some of which will be innovative and some which are well-proven.
We must also ensure that we put the available funding that we do have to best use.
To do so, we will judge all future investment proposals on the following key criteria:
- Do the projects deliver the greatest level of carbon reduction potential that they can achieve?
- Can the money be better invested in other forthcoming and viable schemes to deliver greater carbon reduction potential for each pound spent?
- Is the available funding leveraging additional private sector investment?
- Will the project deliver local economic stimulus and job creation?
- Does the scheme deliver fair and inclusive economic growth for the city?
- Do the schemes maximise opportunities for cost savings, operational improvements and asset value enhancement whilst delivering significant carbon reduction potential?
If the answer to any of the above criteria is ‘no’, then we will challenge our delivery teams to re-evaluate the options and return with an investment case which addresses the shortcomings.
Ready to Act
We recognise that we are in a period of uncertain funding, with European structural funds coming to an end and little detail has
been provided on future Government funding streams.
We need to develop a fully costed investment and delivery programme, with a portfolio of low carbon projects which are ready to react to opportunities to access funding streams as they arise.
We encourage city partners and businesses to work independently and together with Newcastle City Council to develop robust
feasibility studies and conceptual designs for schemes which are technically and economically viable and that will deliver the required carbon savings for our Net Zero future.
We will then identify suitable funding streams and / or develop innovative financing mechanisms, and promote these projects to key regional, national and international organisations in the interests of bringing forward the necessary funding programmes on an expedited basis.