Green recovery funding

By Laetitia Pancrazi

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Recent climate action funding announcements

In the past two months, the central government has made several funding announcements to help local authorities, as well as residents and businesses, recover from the COVID-19 crisis. Some of the funding announcements include:

  • A £2 billion package to create new era for cycling and walking was announced in May. The first £250 million was unlocked as part of an emergency active travel fund. This represents the largest ever boost for cyclists and pedestrians. It is part of the £5 billion in new funding announced for buses and cycling in February. You can find more information about this funding here.
  • Chancellor Rishi Sunak also unveiled a £3 billion green investment programme to create jobs, upgrade buildings and rebuild the economy.
    • As part of this programme, £1 billion is expected to be set aside to improve energy efficiency of public buildings, including schools and hospitals. £50 million will be allocated to pilot schemes for innovative approaches to large-scale retrofitting of social housing.
    • An additional £2 billion has been allocated to a Green Homes Grant Scheme to support households in insulating their homes and make them more energy efficient. The scheme is set to launch in September and is expected to run for one year. Under the scheme, the government will cover at least 2/3 of the cost of any energy-saving retrofit work including installation of insulation and double-glazed windows. Homeowners can claim vouchers (of up to £5,000) once they have a quote for the work and the work has been approved.
  • A ‘Plan for Jobs’ was also announced and includes £1.6 billion investment to scale up employment support schemes, traineeships and apprenticeships to help people seeking jobs. This is beneficial for local authorities seeking to increase their capacity in delivering climate action and cultivate youth climate leadership. You can find more information here.


Based on conversations we have had with local authority officers through our Financing Climate Action Insight Panel, the government’s funding announcements are welcomed and much needed, especially given the impact of COVID-19 on local authorities’ finances.

However, the amounts announced still fall short of the government’s promises. The Conservative Party has promised to spend £9.2 billion on improving energy efficiency in homes, schools and hospitals. This amount is also dwarfed by France’s (£13.5 billion) and Germany’s (£36 billion) governments’ commitments to a green recovery. Climate change campaigners have also commented that the amounts committed by the UK government are a welcome start but not sufficient to tackle the climate and economic crises.

Local authorities have also expressed concerned at the complicated funding requirements and processes, and the numerous ‘hoops’ they have to jump through to obtain the funding. With local authorities already stretched thin, they may not always have the capacity to apply for convoluted funds. Some local authorities are calling for greater levels of devolution and more discretionary funding that can be spent locally on projects that will have the most impacts


Local authorities cannot at this moment in time solely rely on central government funding to deliver their climate action and achieve a green recovery. To finance climate action and deliver sustainable co-benefits, local authorities will have to use a variety of financing mechanisms from capital investment programmes to more innovative alternative delivery models.

This blog post is part of our ‘Financing Climate Action’ Research Project.  Our research project Financing Climate Action aims to identify these innovative financing mechanisms and will provide advice, tips and pathways for local authorities looking to finance their sustainable projects.

As part of this research project we are running a nationwide survey that explores various themes including sustainability reporting tools, green finance mechanisms and alternative delivery models.  The survey is for completion by local authorities’ climate change and/or finance officers and aims to gather information and insights about financing climate action.  The survey will close on the 7th of August.  Access the survey here.

If you are interested in learning more about our GET SET ZERO approach and/or research project please contact

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