Energy Policy and the tensions between austerity and localism

Schemes to reduce energy use show how local authorities are caught between devolved responsibilities and centralised resources

Since 2008 the main focus of environmental policy in the United Kingdom has been the commitment to reduce CO2 emissions by 80% relative to 1990 levels by 2050.  The domestic sector accounts for 25% of all emissions and as such it is at the forefront of energy reduction strategies.  The responsibility to reduce home energy usage rests with local authorities, yet whilst the government increasingly talks about devolution and localism local authorities remain bound by centrally-driven national policies.

Evidence tells us that the best way to reduce energy use and improve energy efficiency requires taking a long-term, joined-up approach that tackles underlying and interrelated problems of poor quality and inefficient housing, fuel poverty and local deprivation.  Yet findings from a new study of energy efficiency schemes run by local authorities indicate that many schemes are increasingly based on narrow and short-term policies, and are increasingly dictated by the private sector.  Local authorities are lacking freedoms and resources from central government and are resorting to short-term policies to meet the needs of central government rather than their communities.

Strategies to improve energy efficiency are often designed in order to satisfy competing stakeholder pressures, all with varying ideologies, political perspectives, uncertainties, and commitments.  Economists such as Dieter Helm argue for a ‘bottom up’ approach to reducing carbon emissions via localised energy efficiency schemes; whilst others advocate a centralist approach in order to provide service delivery mechanisms that ensure economies of scale and overcomes the risk of local authorities being ‘captured’ by interest groups.

Localised strategies (where functions and responsibilities are devolved from the government to local authorities, individuals, and community groups) are seen as the antithesis of the overly centralized, ‘one-size-fits-all’ central government schemes.  The emphasis is on promoting and empowering community-driven strategies, based on the idea that they are best placed to serve the local area and economy.  Since 2010 the UK’s Department for Communities and Local Government has encouraged a move towards localism, stating that ‘trying to improve people’s lives by imposing decisions, setting targets and demanding inspections from Whitehall simply don’t work. It creates bureaucracy. It leaves no room for adaptations to reflect local circumstances or innovation to deliver services more effectively and at lower costs’.

In theory, the adoption of a localist policy approach should result in local authorities being provided with the necessary freedoms and resources to pursue their own energy policies and associated social objectives such as prioritising the reduction of fuel poverty.  However, academic literature on ‘localism’ highlights that the extent to which local authorities can exercise power and influence over energy policies is ultimately constrained by authority, legitimacy, and resources; these are provided almost always at the discretion of central government.  These constraints are manifesting themselves in the suspicions that, under the cover of austerity, the government is using localism as a way of transferring responsibility for service provision but without devolving the necessary resources.  Risk, responsibility, and accountability are delegated to councils at the same time as large funding cuts to local government and mandatory council tax freezes have been implemented.  The result of these developments is that the UK, and especially England, remains one of the most fiscally centralised nations in the OECD.

Joined-up, locally driven energy efficiency policies have the potential to achieve a wide range of locally-specific social and economic development ‘successes’ such as job creation, reductions in fuel poverty and improved health outcomes.  Yet the reality is that local authorities are still mandated to report against crude measures such as ‘reduction in household energy consumption’, with financially challenged councils prioritising meeting government targets.  Local authority representatives view these foci as restrictive and speak of tensions between ‘domestic energy’ necessity, and the desire of public servants to improve social outcomes for their communities.  In addition, the funding mechanisms for energy efficiency schemes such as the Green Deal have the effect of excluding low income households (those who have most to gain), and even lack incentives to attract middle and high income residents as ‘you can get cheaper credit from a commercial loan or from re-mortgaging’.

It is far from clear that localism and the reforms to fiscal responsibility have given autonomy and authority to local authorities to improve energy efficiency levels and social conditions for communities.  Evidence suggests that local authorities are still strongly bound by central government initiatives and are at the whims of short-term changes in policy direction dictated by central government.  In essence they are caught between devolved responsibilities and centralised resources.