climate change and the low carbon economy in london

Skills for Climate Change: A Toolkit for developing London’s low carbon economy

Climate Change and the Low Carbon Economy in London

A Toolkit for developing the local low carbon

sector for London Public authorities

Prepared for Centre for Innovation & Partnerships

Skills for Climate Change Project led by Newham College

By

MTW Consultants Ltd in association with Urbis Regeneration Ltd

July 2012

MTW Consultants Ltd. 70 Second Avenue London SW14 8QE

[email protected] www.mtwconsultants.co.uk

Tel: (+44) 020 3002 4017


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CONTENTS Page No.

EXECUTIVE SUMMARY 3 1. INTRODUCTION 7 2. POLICY DRIVERS OF THE LOW CARBON ECONOMY 9 2.1 Introduction 9 2.2 Global/European framework 9 2.3 UK policy framework 11 2.4 Climate change and the low carbon economy in London 17 3. WHAT OTHER LOCAL AUTHORITIES ARE DOING 28 3.1 Introduction 28 3.2 Key findings from low carbon survey of London Councils 28

4. WHAT LOW CARBON SECTOR SME’S WANT 34 4.1 Introduction 34 4.2 Business trends 35 4.3 Support from Local Authority 38 4.4 Impact of government policy 40 5. CLIMATE CHANGE – CHALLENGES AND OPPORTUNITIES 43 5.1 London’s low carbon economy 43 5.2 Overview of the Toolkit 43 6. SEVEN STEPS TO CREATING LOW CARBON JOBS AND BUSINESS

GROWTH IN YOUR AREA 46 6.1 Step 1: Embedding the low carbon agenda across the Council 46 6.2 Step 2: Identifying low carbon procurement opportunities 51 6.3 Step 3: Developing an understanding of local low carbon companies 52 6.4 Step 4: Using existing procurement tools more effectively 55 6.5 Step 5: Using s106 planning agreements to secure local procurement 65 6.6 Step 6: Supporting low carbon businesses 71


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6.7 Step 7: Monitoring & evaluating performance 74 APPENDICES 1. Case studies of local economic development of LCEGS 77

1. Renew Tees Valley 77 2. Sustainability West Midlands Local Authority Low Carbon programme 80 3. Islington & Camden Local procurement initiative 83 4. Envirolink 87

2. Funding streams for low carbon capital projects 90 3. List of SIC Codes covering LCEGS sectors 96 4. List of low carbon trade associations and professional bodies 99 5. List of Green Business Support programmes in London 105 6. List of useful contacts 112


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EXECUTIVE SUMMARY

The purpose of this report and toolkit is to share best practice among public sector contracting authorities to create employment and business growth opportunities in the low carbon sector in London. The study included a survey of best practice among all 32 London boroughs and the City of London. Policy drivers The primary drivers of the growth of the Low Carbon and Environmental Goods and Services (LCEGS) sector are rapidly increasing consumer demand for low carbon products and services and global efforts to reduce carbon emissions leading to climate change mitigation or adaption. This has led to legislative and regulatory frameworks at both European and UK level which have had a significant impact on the development of the low carbon economy and will continue to do so in future. The low carbon regulatory policies and strategies of the UK government and Greater London Authority are described in detail in section 2 together with the key funding mechanisms being used to drive carbon reduction in London. The LCEGS sector covers a wide variety of industries and many such as, construction companies involved with retrofitting of buildings, do not necessarily regard themselves as low carbon service companies. Research commissioned by BIS in 20091 and updated in 20102 subdivided the LCEGS sector into three core elements:

the environmental sub-sector, including air and marine pollution control, contaminated

land remediation, water supply and waste water treatment and environmental consultancy

the renewable energy sub-sector, including hydro-electric, wave and tidal, wind,

solar/photovoltaic, biomass, geothermal energy and renewables consulting

1 Low Carbon and Environmental Goods and Services, an industry analysis, Innovas for DBERR, 2009

2 Low Carbon and Environmental Goods and Services, an industry analysis, update for 2008/9, Innovas for BIS, 2010


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the emerging low carbon sub-sector, including alternative fuels and energy sources, carbon capture and storage, carbon finance, energy management and building technologies.

Low carbon survey of London Councils The survey of all London local authorities obtained detailed responses from 29 out of 33 Councils and a full version of the findings is available on request. The main aim of the survey was to assess individual council policies on low carbon, what low carbon investment was being made by London boroughs and whether and how this expenditure was being used to benefit local business growth and employment. Some of the key findings were as follows: Councils had a wide variety of carbon reduction targets, base years and target years.

The average annual carbon reduction target was 3.4%. Top priorities regarding climate change were reduction of CO2, energy efficiency,

reducing fuel poverty and waste recycling. All but one of the councils had sustainability teams dealing with Climate change/energy

efficiency issues. Just over 75% of councils are planning to introduce low carbon infrastructure in their

areas To date an estimated 40% of London’s social housing stock has been subject to partial

or total retrofitting representing on average 6,700 housing units per borough. In the last financial year an average of £5.4m was spent per borough on retrofitting

Council owned social housing stock indicating £178m for London as a whole. London wide expenditure on non residential Council buildings was estimated at £29

million per year. On the Green Deal, the majority of Councils had not yet decided on their role. Of the

ones that had plans, 7 intend to act as promoters, 2 as producers and 3 as providers. Over half the councils said their procurement process for larger contacts allowed for

local procurement commitments and targets but nothing specific for LECGS companies and it is not clear how frequently they are being used.

61% of councils plan to invest in waste or recycling facilities over the next three years. 46% of councils offer generic business support but only one targets LCEGS companies

specifically. Almost all believed the public sector should do more to support the growth of the

LCEGS sector in London


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Survey of low carbon SMEs The aim of the survey was to find out what issues the industry was facing and what business support LCEGS companies would like from their local authorities. 50 responses were received covering many of the LCEGS sectors based in 17 London boroughs. Some of the key findings were: 40% of businesses were growing and 36% were static. Of the 24% that thought their

business was contracting, they cited a drop in public sector procurement and market competition as the main reasons.

Almost all businesses see themselves positively growing (52%) or static (44%) in the future.

The average proportion of companies’ staff coming from the borough they are based in was approximately 33%, which indicates that local companies will employ a significant proportion of local residents.

68% businesses said that they received no support from their local authority. 64% of businesses would like to receive opportunities to tender, 44% would like grant information.

Businesses were tentative about the future impact of policies with the majority opting for ‘slightly positive’ in most cases. The Green Deal received the highest number of ‘Very positive’ responses but this still represented less than 5% of the sample.

Toolkit for creating low carbon jobs and business growth Skills for Climate Change has developed a seven part toolkit to help local authorities prioritise and deliver action that will contribute to both reducing carbon emissions and stimulating the local low carbon economy. The seven steps are shown below:


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Embedding the low carbon agenda STEP 1

Identifying low carbon procurement opportunities

Developing an understanding of low carbon

businesses in your area

Using existing procurement tools more effectively

Using s106 planning agreements to secure local

procurement opportunities

Monitoring and evaluation

THE TOOLKIT – SEVEN KEY STEPS

STEP 2

STEP 3

STEP 6

STEP 4

STEP 5

Delivering business support for SMEs

STEP 7


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1. INTRODUCTION

The purpose of this report and toolkit is to share best practice among public sector contracting authorities to create employment and business growth opportunities in the low carbon sector in London. It is based on the results and recommendations of a study carried out in 2012 for the Centre of Innovation & Partnerships’ Skills for Climate Change programme led by Newham College. The study included a survey of best practice among all 32 London boroughs and the City of London. Despite uncertainties over the details of the Government’s strategy for carbon reduction such as the Green Deal and cuts in subsidies to programmes such as the Feed-in-tariff, the market for low carbon goods and services is buoyant and has a considerable period to go before maturity. In London, only 40% of local authority owned social housing stock has been retrofitted so far and annual expenditure among Councils on carbon reduction measures is running at over £200 million per year. However, London Councils have yet to channel this investment directly into opportunities for their local low carbon suppliers of goods and services and few have any market intelligence on who their local players are. This toolkit is designed to help local authorities identify their local low carbon businesses, enable access to tailored business support and provide methods of legitimately leveraging opportunities both from the public sector through well tested procurement mechanisms as well as the private sector through the planning system.

Aims & Objectives

The overall aim of the study was to research and share best practice among public sector contracting authorities to create employment and business growth opportunities in the low carbon sector in London. The main objectives were to:

review current regional and borough level policies and strategies for stimulating the low carbon economy in London;

identify best practice in public sector procurement for low carbon goods and services that ensures employment and business opportunities for local people;


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develop a toolkit for London contracting authorities, building on best practice, to ensure local economic benefit is derived from the procurement of low carbon goods and services.

Methodology The study has undertaken;

a review of the main policies and strategies that are driving the growth of this sector and consultation with key agencies and authorities that are at the forefront of the sector.

A detailed survey of all London local authorities to establish climate change targets and priorities, current and planned low carbon investment, use of procurement to assist SMEs and economic development of their low carbon sector.

A survey of low carbon SMEs to research the levels of confidence in the future of their industry, government policies affecting them and what they would like local authorities to do.

Case studies on examples of good practice among local authorities.


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2. POLICY DRIVERS OF THE LOW CARBON ECONOMY 2.1 Introduction

The primary drivers of the growth of the Low Carbon and Environmental Goods and Services (LCEGS) sector are rapidly increasing consumer demand for low carbon products and services and global efforts to reduce carbon emissions leading to climate change mitigation or adaption. As a consequence, legislative and regulatory frameworks at both European and UK level have had a significant impact on the development of the low carbon economy and will continue to do so in future. The LCEGS market in London was worth just under £23 billion in 2009/10, representing just under 20% of the UK market. London already has around 9,200 companies, employing 160,000 people, involved in the low carbon economy.

2.2 Global/European policy framework Climate Change The impact of climate change and the importance of sustainable development began to gain global recognition during the 1980s. The United Nations established the World Commission on Environment and Development3 (which subsequently became known as the Bruntland Commission) in 1983 and the UN Framework Convention on Climate Change – the first international climate change treaty – was signed in Rio de Janeiro in June 1992. Limits for greenhouse gas emissions (GHGs) did not come into place until 2005, when 52 countries agreed to reduce GHGs in relation to 1990 levels. The European Union established the Emissions Trading Scheme (ETS) as a key mechanism to meet its targets under the Kyoto Protocol4. Each EU member state is required to agree an overall cap on emissions from its energy intensive industries – including power generation, iron and steel making, the process industries, the automotive sector and the major airlines. The ETS covers more than 10,000 installations with a net heat excess of 20 MW which are collectively responsible for almost half of the EU's

3 Our Common Future: report of the World Commission on Environment and Development, United Nations 1987

4 Kyoto Protocol to the United Nations Framework on Climate Change, United Nations 1997


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emissions of CO2 and 40% of its total greenhouse gas emissions. The second ETS trading period is due to expire in December 2012.

Renewable Energy Since 2000, the European Union’s Climate Change Programme has produced a number of policy initiatives that support the development of a low carbon economy, most notably the EU Emissions Trading Scheme. The EU’s second Renewable Energy Directive5, published in 2009, established a binding target for the EU of sourcing 20% of its energy from renewable sources by 2020, based on the targets of individual member states. Under the Directive the UK is expected to meet 15% of its overall energy needs from renewables by 2020 although it produced just 6.5% of energy from renewable sources in 2010. Waste The EU Landfill Directive6 came into European law in April 1999 and aims to prevent or reduce the environmental impacts of landfill for hazardous, non-hazardous and inert waste. The Directive set the headline target to reduce the volume of biodegradable waste going to landfill to 75% of 1995 figures by 2010 and 35% by 2020. The EU Waste Framework Directive7 (WFD) came into force in December 2008 and represents the most significant review of EU waste management policies since the mid 1970s. The key elements of the WFD include the establishment in EU law of the ‘waste hierarchy’ encompassing prevention, re-use,

recycling, recovery and disposal the adoption of the EU’s first general recycling targets, including household waste (50%

to be recycled by 2020) and non-hazardous construction and demolition waste (70% by 2020) and requirements for separate collection of recyclable materials; these are to be reviewed in 2014.

5 Directive 2009/28EC of the European Parliament and of the Council, European Union 23 April 2009 6 Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste, European Union 26 April 1999

7 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste, European Union 19 November 2008


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2.3 UK policy framework Climate Change Act 2008 The UK is unique in having a long-term, legally binding framework to tackle climate change. The Climate Change Act8 received Royal Assent in November 2008 and requires the reduction of emissions by at least 80% by 2050, compared with 1990 levels, and at least 34% by 2020. The Act introduces legally binding carbon budgets, which limit the levels of greenhouse gas emissions; the first three budgets cover 2008-2012, 2013-17 and 2018-2022. The Carbon Plan9, published in December 2011, sets out the Government's plans for achieving the emissions reductions committed to in the first four carbon budgets, consistent with meeting the 2050 target. Noting that emissions have fallen by 25% since 1990, the plan sets out a range of cross-cutting proposals covering low carbon buildings, transport and industry and agriculture, forestry and waste, including implementing the Green Deal and Energy Company Obligation to stimulate energy

efficiency in domestic properties whilst removing the up-front cost to the consumer delivering the Renewable Heat Incentive to realise over 130,000 low carbon heat

installations by 2020; the plan considers that the mass deployment of low carbon heat is unlikely to happen during the next decade

supporting the development of low carbon and ultra-low carbon vehicles adopting

electric batteries, plug-in hybrid technologies and hydrogen fuel cells encouraging industry to adopt energy efficiency measures and move to low carbon

energy, including the use of biomass reducing emissions from electricity generation through increased use of gas to replace

coal and more generation from renewable sources, whilst planning for the rapid decarbonisation likely to be required from 2020

8 Climate Change Act 2008

9 The Carbon Plan, Department of Energy and Climate Change, December 2011


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developing a waste prevention programme and other measures to drive waste reduction and re-use.

These initiatives are detailed in the following pages. Energy The Energy Act 200810 was given Royal Assent in November 2008 and sought to address the challenges of energy security; the changing energy market and the emergence of new technologies such as carbon capture and storage. The key elements of the Act include

developing the Renewables Obligation (RO); currently worth around £1.3bn per annum,

the RO is the main financial incentive for the development of large scale renewable electricity generation with support granted for 20 years

introducing Feed-in-Tariffs to offer financial support for smaller (up to 5MW) electricity

generation projects, and establishing the Renewable Heat Incentive to provide support for all forms of renewable heat projects

The UK National Renewable Energy Action Plan11 for the UK, published in 2010 in response to the EU Renewable Energy Directive, indicated that the 2020 target is achievable, requiring around 108 terawatt hours per year (TWh/y) of large-scale renewable electricity generation in 2020, with the remainder (126 TWh/y) coming from small-scale renewable electricity, renewable heat and transport. This is equivalent to delivering 30% of electricity demand, 12% of heat demand and 10% of transport demand through renewable sources. In July 2011, the Government published the UK Renewable Energy Roadmap12. This identifies the key technologies upon which the UK will base its drive to increase the proportion of energy generated by renewable sources. ECC has subsequently consulted on the development of a series of strategies which set out more detailed proposals for some of the key renewables technologies identified in the roadmap. These include bioenergy13 - biomass has the potential to meet up to 11% of the UK’s energy demand

with a particular focus on end of life materials; 10 Energy Act 2008

11 UK National Renewable Energy Action Plan, Department of Energy and Climate Change, July 2010 12 UK Renewable Energy Roadmap, Department of Energy and Climate Change, July 2011

13 UK Bioenergy Strategy, Department of Energy and Climate Change, April 2012


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district heating – at present only 2% of UK heat demand is generated through district

heating systems, in contrast to Finland (49%) and Denmark (60%) microgeneration – the Government has identified the need to support smaller scale or

domestic renewable energy initiatives alongside larger, commercial projects as part of efforts to decentralise energy production.

The Renewables Obligation has been subject to a number of changes since its introduction in 2002; in particular it has moved from offering a uniform level of support for all renewable technologies to variable support for different technologies dependent on their costs, maturity and potential for future deployment. It is anticipated that DECC will shortly publish its consultation on RO banding levels for the period from April 2013. The RO will close to new generation on 31 March 2017. The 2008 Energy Act introduced the concept of Feed-in-Tariffs (FIT) to incentivise the take-up of renewable energy systems by providing payments for producing electricity and exporting it to the national grid, focused on projects of up to 5MW. By February 2011, more than 21,000 projects had registered for the tariff with generating capacity of 1GW. The Government, concerned by the number of large scale, commercial solar projects seeking support through FIT and the need to make £40 million of savings through the Spending Review, has subsequently undertaken two reviews of the FIT scheme; the second, published in February 2012, will have the effect of halving FIT for small scale/domestic solar panels from April 2012, despite various legal challenges. The Renewable Energy Association14 has claimed that up to 11,000 jobs in the sector could be lost across the UK as a result of the changes to the tariff system and that only 20% of planned solar projects in the social housing sector will now go ahead. The heat used in homes and workplaces accounts for half of all of the energy consumed in the UK, and around half of all UK carbon emissions. In March 2011, the Government launched the Renewable Heat Incentive15 (RHI) to accelerate deployment by providing a financial incentive to install renewable heating in place of fossil fuels. The first phase of RHI will be targeted at large scale industrial emitters.

14http://www.r-e-a.net/news/rea-sta-solar-survey-details-industry-distress

15 Renewable Heat Incentive, Department of Energy and Climate Change, March 2011

http://www.r-e-a.net/news/rea-sta-solar-survey-details-industry-distress


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In July 2011 DECC published Planning our Electric Future16, a White Paper setting out proposals for further reform of the electricity market. Key proposals included the introduction of long-term certainty over Feed in Tariffs, the introduction of a Carbon Price Floor and Emissions Performance Standards to regulate CO2 emissions from fossil fuel power stations. The Energy Act 2011 gained Royal Assent on 18 October 2011 and is focused on domestic and workplace energy efficiency measures. The key elements of the Act include establishing the Green Deal, a new financing framework to enable the provision of fixed

improvements to the energy efficiency of both domestic and non-domestic properties, funded by a charge on energy bills that avoids the need for consumers to pay upfront costs and effectively takes the form of a loan; only measures that are expected to deliver savings that exceed the level of the charge are eligible for funding support (the ‘Golden Rule’ of the Green Deal proposals)

introducing the Energy Company Obligation, which targets additional support to improve

energy efficiency for those households containing vulnerable people on low incomes or in hard to treat housing; the ECO will replace existing obligations including the Carbon Emissions Reduction Target and the Community Energy Saving Programme which expire at the end of 2012

strengthening the framework to improve the energy efficiency of housing in the private

rented sector; from April 2015, private residential landlords will be unable to refuse a tenants’ reasonable request for energy efficiency improvements, where a finance package, such as the Green Deal and/or the ECO; from April 2018, it will be unlawful to rent out residential or business premises that do not reach minimum energy efficiency standards (these are likely to be set at EPC rating ‘E’).

The Green Deal and ECO programmes are expected to deliver improvements worth on average £10,000 per household, and should commence in Autumn 2012. Some construction industry representatives and other bodies have questioned whether the support available under the scheme will be sufficient to incentivise householders and businesses. The Green Deal and Energy Company Obligation replace the Carbon Emissions Reduction Target (CERT) which required electricity and gas suppliers to achieve energy efficiency

16 Planning our Electric Future: a White Paper for secure, affordable and low carbon electricity, Department of Energy and Climate Change, July 2011


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targets by assisting their customers with energy efficiency measures. The CERT programme operated from 2008-2011 and followed the earlier Energy Efficiency Commitment which commenced in 2002. New housing In 2006, in Building a Greener Future: towards zero carbon development17, the Government set out its ambition for all new housing to be carbon neutral by 2016. The Code for Sustainable Homes (CSH) was introduced in England in 2007 as a national standard and rating system to improve the sustainability of new housing in key areas including energy and CO2 emissions; water; materials; waste and pollution. Initially, CSH was introduced on a voluntary basis but the code became mandatory in 2008, complementing the system of Energy Performance Certificates introduced under the EU Energy Performance of Buildings Directive18. In 2010 Code level 3 compliance became mandatory for all public and private sector new-build residences, including flats and houses. The Government has re-affirmed its commitment to achieving Code Level 6 – a zero carbon rating – for all new homes and further changes to the Building Regulations are anticipated to achieve this over the period to 2016. Waste The Government was subject to some criticism relating to the implementation of the EU Landfill Directive and an apparent lack of enforcement of the regulations concerning the disposal of hazardous waste, which could place those firms correctly disposing of such waste at a commercial disadvantage. However, the volume of waste landfilled in England and Wales fell from over 103 tonnes in 2000 to 46.5 tonnes in 2009, meeting the first Landfill Directive target. The legislation to transpose the revised EU Waste Framework Directive into national law came into force in March 2011 through the Waste (England and Wales) Regulations 201119. Subsequently, the Government published its Review of Waste Policy20 in England in June 2011. The review builds firmly on the EU WFD and the associated regulations and confirms the Government’s commitments to the adoption of recycling targets and the production of waste prevention plans. The review sets out proposals to promote waste efficient product

17 Building a Greener Future: towards zero carbon development, Department of Communities and Local Government, December 2006

18 Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 on the energy performance of buildings, December 2002

19 Waste (England and Wales) Regulations 2011

20 Government review of waste policy in England 2011, Department for Environment, Food and Rural Affairs, June 2011


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design and manufacture and to target the most carbon intensive waste streams (e.g. food, metals, plastics) and those generating the highest direct emissions from landfill. The review also supports the reduction of avoidable food waste, and promotes anaerobic digestion and other technologies to deliver energy from waste, including the development of new financial incentives to support recovery infrastructure. Low carbon vehicles Department for Transport forecasts suggests that, as costs reduce and manufacturers bring forward a wider range of vehicles over the next decade – in part to meet EU emissions targets for new vehicles - several hundred thousand plug-in vehicles could be on the road by 2020.The current and previous Governments have invested in a number of programmes to ensure the UK is at the forefront of the development of ultra-low emission vehicles. Recent initiatives have included provision of over £300m over the period to 2015 for the Plug-In Car Grant to reduce the upfront cost of eligible vehicles to consumers and businesses and the Plugged-In Places programme supporting the installation and trialling of recharging infrastructure. The low carbon economy The former Labour Government set out a Low Carbon Industrial Strategy21 in 2009. The strategy identified market opportunities across the range of LCEGS activity with a particular focus on Offshore wind Wave and tidal power Nuclear power Carbon capture and storage Ultra low carbon vehicles Low carbon buildings and construction and set out proposals to address barriers to entering new markets for UK firms. The plan also detailed proposals to develop ‘Low Carbon Economic Areas’ across the UK – the first of which was to be located in the South West, building on opportunities for marine energy – and to enhance support for innovation across the LCEGS sector. It also highlights the role of public procurement in driving the growth of the low carbon economy although this is

21 The UK Low Carbon Industrial Strategy, Department for Business, Innovation and Skills/Department for Energy and Climate Change, June 2009


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largely focused on reforming the approach of Government Departments through the publication of Innovation Procurement Plans. In the Plan for Growth22, the Coalition Government restates its commitment to being ‘the greenest ever’ administration and highlights the opportunities associated with growth of the LCEGS sectors, whilst noting that some aspects of the move towards a low carbon economy may impose transitional costs on businesses or consumers. The key proposals set out in the Plan for Growth include: introducing a carbon price floor for electricity generation from April 2013 to stimulate

investment in low carbon projects and to incentivise major emitters of CO2 to decarbonise

establishing the Green Investment Bank – capitalised with £3 bn of Government

investment – to act as a further stimulus to private investment in low carbon infrastructure, with GIB investments to commence in 2012/13.

2.4 Climate change and the low carbon economy in London

The London Plan In July 2011, the Mayor of London published the London Plan23, the spatial development strategy for the City which sets out an integrated economic, environmental, transport and social framework for the development of London over the period to 2031. The London Plan establishes a vision and six core objectives to guide the development of the capital; the latter includes ‘a City that becomes a world leader in improving the environment locally and globally.’ The London Plan identifies a housing requirement of some 322,000 additional homes over the period to 2021 and for up to 5.2 million sqft of additional office floorspace over the period to 2031 whilst managing phased release of industrial land for alternative uses. The Plan also sets out policies to

22 The Plan for Growth, HM Treasury/Department for Business, Innovation and Skills, March 2011

23 The London Plan, spatial development strategy for Greater London, Mayor of London July 2011


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achieve an overall reduction in London’s carbon dioxide emissions of 60 per cent (below 1990 levels) by 2025 – representing a more challenging medium-term target than that set out for the UK as a whole in the Climate Change Act

minimise CO2 emissions from new development by achieving zero carbon status (CSH

Level 6) for all new dwellings by 2016 and for new non-domestic buildings by 2019 through on-site measures

achieve the highest standards of sustainable design and construction encourage retrofitting of existing housing with appropriate energy efficiency and

renewable energy measures generate 25 per cent of the heat and power used in London through the use of

localised decentralised energy systems by 2025, including the development of combined heat and power projects and networks

increase the proportion of energy generated from renewable sources climate change adaption measures including measures to mitigate the impact of

London’s ‘urban heat island’, urban greening, flood risk management, the adoption of sustainable drainage mechanisms and reducing water use

support waste minimisation and recycling with the aim of achieving 60% recycling or

composting of municipal solid waste by 2031, 70% of commercial/industrial waste by 2020 and zero biodegradable or recyclable waste to landfill by 2031

increase London’s waste processing capacity, including waste management/treatment

sites and resource recovery parks to encourage the co-location of recycling, recovery and manufacturing activities.

Climate Change Mitigation and Energy Strategy In October 2011, the Mayor of London published ‘Delivering London’s Energy Future24’ – the climate change mitigation and energy strategy for London.

24 Delivering London’s energy future: the Mayor’s climate change mitigation and energy strategy, Mayor of London, October 2011


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London’s CO2 emissions by sector, 2008

The strategy notes that in 2008, London’s CO2 emissions equated to almost 45 million tonnes ((MtCO2) – equivalent to 8.5% of the UK total but on a par with the City’s emissions in 1990. Almost 80% of emissions originate from energy supply to or energy use in homes and workplaces. It sets out four core objectives: to reduce London’s CO2 emissions to mitigate climate change by reducing GHGs to

80% of 1990 levels by 2050 (and, as per the London Plan, 60% by 2025) to maximise economic opportunities from the transition to a low carbon capital,

highlighting the opportunity for accelerated market growth if global CO2 emission targets are achieved

to ensure a secure and reliable energy supply for London – setting out the requirement

for substantial investment in energy infrastructure over the period to 2020 to mitigate the risk of an ‘energy gap’

to meet, and where possible exceed, national climate change and energy objectives –

building on the Green Deal (a pay-as-you-save model to retrofit the UK’s homes and businesses), reform of the electricity market and the establishment of the Green Investment Bank.

The strategy notes that “Given the huge environmental and economic opportunities….. the pace of delivery of climate change mitigation programmes needs to be much faster. The Mayor’s approach is to


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kick-start action through directly funded programmes to catalyse the scale of activity required” and sets out a number of major investment proposals, including: a major programme (RE:NEW) to retrofit more than 1.5 million homes with energy

efficiency and renewable energy measures, linked to the Green Deal and FIT programmes (see overleaf)

Re-Connect, involving the establishment of a series of Low Carbon Zones which are

aiming to reduce CO2 emissions during 2012 through the concentration of energy efficiency and energy supply programmes at neighbourhood level

developing a decentralised energy programme to accelerate the provision of the

infrastructure required for low carbon energy supply, including waste to energy facilities to generate renewable heat and power

rolling out electric vehicles and associated charging infrastructure and the provision of

ultra low carbon buses developing the Green Enterprise District – covering four East London Boroughs – to

promote the growth of low carbon businesses and attract inward investment (explored in more detail overleaf)

the Low Carbon Employment and Skills programme, to equip local people with the skills

to gain employment in London’s low carbon economy. The strategy estimates that reducing emissions to 60% of 1990 levels by 2025 will require investment of around £40 billion, including public investment of £14 billion. The £100m London Green Fund was established in 2009 with a view to leveraging over £500 million of private investment and with public sector funding contributions from the London ERDF programme, London Development Agency/Greater London Authority and the London Waste and Recycling Board. The revolving fund is managed by the European Investment Bank and forms part of the EIB’s JESSICA programme.


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RE:NEW RE:NEW was launched in April 2009 and aimed to establish a pan-London scheme to retrofit homes with energy efficiency and other measures to reduce CO2 emissions. The programme is a partnership between the Mayor of London, London Councils, the Energy Saving Trust and London’s local authorities. The programme was piloted as an area-based initiative, with surveys on a street-by-street basis to identify and deliver an initial package of free energy and water saving advice (including low energy light bulbs, radiator panels etc). Assessors also establish whether homes are eligible for more extensive energy efficiency or renewable measures and the availability of funding through the Carbon Emissions Reduction Target (soon to be replaced by the Green Deal/ECO programme), Warm Front or other local authority grants. To date, interventions under RE:NEW have largely focused on lower cost measures including loft and cavity wall insulation. The current phase of the programme is rolling out the programme to all 33 London Boroughs, targeting one area in each Borough, with a view to supporting 55,000 homes by March 2012. Subject to the availability of additional funding, the Mayor intends RE:NEW to reach 1.2 million homes by 2015. Green Enterprise District In February 2010, the former London Development Agency and the London Boroughs of Barking and Dagenham, Havering, Newham and Tower Hamlets, launched plans for the development of a major low carbon economy initiative – the Green Enterprise District25 – as part of proposals for the regeneration of the Thames Gateway. The Green Enterprise District (GED) covers approximately 50km2, stretching from the Olympic Park, eastwards along the river to the edge of the City at Havering. The area has one of the largest concentrations of LCEGS businesses and industrial land in London. The aims of the GED are to build a vibrant economy focused on green enterprise develop a sustainable environment that people want to live in and visit as well as work.

25 Green Enterprise District East London, London Development Agency, February 2010


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Alongside the Siemens Pavilion, some of the other key projects developed as part of the GED to date include.

the Sustainable Industries Park at Dagenham Dock which aims to create the UK’s

largest concentration of environmental industries and technologies on a 60 acre site owned by the GLA; the project aims to attract waste to energy, recycling, reprocessing and CHP facilities with current occupiers including PET recycling business Closed Loop and TEG Environmental, which is to develop a waste to energy power plant that will divert food waste from landfill

the Barking Riverside waterfront community development feasibility work on the London Thames Gateway Heat Network and the East London

Green Grid.

Climate Change Adaptation Strategy The Mayor’s draft Climate Change Adaptation Strategy26 was published for consultation in February 2010. The strategy focuses on increasing understanding of climate change challenges and risks and ensuring emergency plans are in place to cope with extreme weather events. It considers a range of climate change issues including flooding, drought, overheating and a number of cross-cutting issues. The final version of the strategy is expected to be published in summer 2012. London Housing Strategy The Mayor published the City’s first statutory Housing Strategy27 in February 2010 and sets out the vision for housing and policies to stimulate new affordable housing provision and improve the quality of existing homes. Under the theme of ‘Producing Greener Homes’ the Housing Strategy sets out an overarching vision to “deliver higher environmental standards for all London’s homes and neighbourhoods – in the new homes we build, our existing homes and the areas that surround them.” With London’s housing responsible for between 36-38% of the City’s CO2 emissions, the strategy highlights the challenge associated with achieving the Mayor’s challenging carbon

26The draft climate change adaptation strategy for London, Mayor of London, February 2010 27 The London Housing Strategy, Mayor of London, February 2010


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reduction targets alongside the wider risks of climate change and fuel poverty. The strategy notes that the predominance of older flats and apartments with solid walls across London that are both technically complex and costly to insulate creates its own particular challenge in developing an effective emissions reduction strategy. The Housing Strategy mirrors many of the policies of the London Plan in relation to energy efficiency and renewable energy generation; key policies include all new housing developments to provide on-site low carbon/renewable energy

generation where feasible all new publicly funded housing projects to achieve at least Code for Sustainable Homes

Level 3, and Level 4 by April 2011 social rented homes will be subject to levels of environmental performance which, where

possible exceed the Decent Homes standard; were existing homes are retrofitted and the existing fabric allows a Standard Assessment Procedure (SAP) energy efficiency rating of at least 65 should be achieved.

green infrastructure will be promoted as an integral part of the development process. A revised draft28 was published in December 2011 to reflect the devolution of new housing and regeneration powers to the Mayor of London. London Economic Development Strategy The Mayor published the London Economic Development Strategy in May 2010. The strategy is closely aligned with the London Plan and London Housing Strategy and sets out five core objectives, namely to promote London as the world capital of business, the world’s top international visitor

destination and the world’s leading centre of learning and creativity ensure that London has the most competitive business environment in the world

28 The revised London Housing Strategy, consultation draft, December 2011, Mayor of London


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make London one of the world’s leading low carbon capitals by 2025 and a global leader in carbon finance

give all Londoners the opportunity to take part in London’s economic success, access

sustainable employment and progress their careers attract the investment in infrastructure and regeneration which London needs and to

maximise the benefits of this investment and the opportunities created by the Olympic and Paralympic Games and their legacy.

Under Objective 3, the Economic Development Strategy highlights a number of key actions including: maximising London’s global market share in carbon finance, carbon trading and related

business, consulting and legal services promoting London’s research base and encouraging commercialisation of low carbon

products and processes providing economies of scale, stability and large potential markets for low carbon

investors utilising the whole GLA group to drive demand for good environmental management and

practice and demonstrating leadership in the adoption of energy efficiency whilst harnessing its low carbon purchasing power through simplified procurement processes.

London Transport Strategy The Mayor’s transport strategy29 was adopted in May 2010 and was developed alongside the London Plan and Economic Development and Housing Strategies as part of a strategic policy framework to guide the City’s development over the next 20 years. The transport strategy identifies the following strategic objectives for London’s transport system: In reducing the contribution of transport to climate change, the plan is set firmly in the context of the Mayor’s challenging commitment to reduce CO2 emissions to 60% of 1990 levels by 2025. Road vehicles currently account for almost three quarters of transport-

29 Mayor’s Transport Strategy, Mayor of London, May 2010


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related emissions and the plan notes the importance of accelerating the introduction of low carbon vehicles alongside further demand management measures to complement the Congestion Charge. The plan notes that ‘the Mayor will take a lead in reducing emissions from vehicle fleets under his control through initiatives such as low emission buses and an electric vehicle fleet by 2015.’ The plan details further initiatives including encouraging walking, cycling and public transport use. It also highlights the importance of climate change adaptation in relation to London’s transport system, including designing and constructing infrastructure to withstand future climatic conditions and urban greening measures. Municipal Waste Management Strategy The Mayor published London’s first Municipal Waste Management Strategy in November 2011. London’s Wasted Resource30 highlights the need to manage the City’s municipal waste more effectively and efficiently as a result of the rising cost and regulatory frameworks associated with landfill; concerns around energy security and climate change the emergence of new waste management technologies and changing customer behaviour. The strategy notes that the municipal waste sent to landfill each year generates 460,000 tonnes of greenhouse gas emissions, and that much of this could be re-used, recycled or composted. By reducing the amount of municipal waste produced and then adopting a more innovative approach for dealing with the waste sent to landfill, the strategy suggests that London could save up to 1.5 million tonnes of CO2 emissions per annum. Key objectives include to minimise the impact of municipal waste management on our environment and reduce

the carbon footprint of London’s municipal waste. unlock the massive economic value of London’s municipal waste through increased

levels of reuse, recycling, composting and the generation of low carbon energy from waste.

manage the bulk of London’s municipal waste within London’s boundary, through

investment in new waste infrastructure.

30 London’s wasted resource: the Mayor’s Draft Municipal Waste Management Strategy, public consultation draft, Mayor of London, October 2010


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The strategy sets out six targets around which performance of the Municipal Waste Management Strategy will be measured: to achieve zero municipal waste direct to landfill by 2025 to reduce the amount of household waste produced by 20% per household by 2031 to increase London’s capacity to reuse or repair municipal waste from 6,000 tonnes per

annum in 2008 to 20,000 tonnes p.a. in 2015 and 30,000 tonnes in 2031 to recycle or compost at least 45 per cent of municipal waste by 2015, 50 per cent by

2020 and 60 per cent by 2031 to cut London’s greenhouse gas emissions through the management of London’s

municipal waste, achieving annual greenhouse gas emissions savings of one million tonnes by 2031

to generate as much energy as practicable from London’s organic and non-recycled

waste in a way that is no more polluting in carbon terms than the energy source it is replacing; this is estimated to be possible for about 40 per cent of London’s municipal waste after recycling or composting targets are achieved by 2031.

The Mayor also published the draft Business Waste Management Strategy31 in October 2010. The strategy emphasises the importance of waste reduction and more efficient management of resources to reduce the financial and environmental impact of waste, managing London’s waste within its boundaries and accelerating recycling and renewable energy generation from waste to unlock economic opportunities. The plan identifies two key targets: to achieve 70% re-use, recycling and composting of commercial and industrial (C&I)

waste by 2020, maintaining these levels to 2031 to achieve 95% re-use, recycling and composting of construction, demolition and

excavation (CDE) waste by 2020,maintaining these levels to 2031.

31 London’s wasted resource: the Mayor’s Draft Business Waste Management Strategy, public consultation draft, Mayor of London, October 2010


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London Waste and Recycling Board The LWARB was established through the Greater London Authority Act 2007 to promote and encourage waste minimisation and recycling. The Board has funding of some £26.3m available over the period from 2011/12 to 2014/15; its business plan32, re-issued in February 2012, notes that LWARB will focus on the following priorities over the period to 2014/15: targeted financial support for infrastructure projects and developing innovation through

strategic partnerships working with the public sector and aligned organisations to deliver efficiency savings

through joint procurement, framework agreements and shared services monitoring and reviewing existing grant and loan commitments, passive brokerage

services, sharing of best practice and the operation of existing best practice tools. Waste Disposal Authorities and Partnerships There are four Waste Disposal Authorities and one Strategic Waste Partnership covering London: Western Riverside Waste Authority (covering Hammersmith and Fulham, Lambeth,

Wandsworth and Kensington and Chelsea) East London Waste Authority (Barking and Dagenham, Havering, Newham and

Redbridge) North London Waste Authority (Barnet, Camden, Enfield, Hackney, Haringey, Islington

and Waltham Forest) West London Waste Authority (Brent, Ealing, Harrow, Hillingdon, Hounslow and

Richmond upon Thames) South London Waste Partnership (Croydon, Kingston, Merton and Sutton).

32 London Waste and Recycling Board Business Plan 2011/12-2014/15, LWARB February 2012


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Waste collection, disposal and management contracts tend to vary across each Waste Authority. Each authority operates its own landfill; there are two major incinerators in Edmonton and Lambeth. Generally each local authority lets its own waste contracts and has considerable autonomy over how it meets waste management and recycling targets.

3. WHAT OTHER LOCAL AUTHORITIES ARE DOING 3.1 INTRODUCTION

An online survey was carried out of all 32 London Councils plus the City of London. The main aim of the survey was to assess what low carbon investment was being made by London boroughs, the availability of funding and whether and how this expenditure was being used to benefit local business growth and employment. A Questionnaire co-ordinator was recruited in each Council to gather information from all relevant departments since the information covered housing, planning, economic development and sustainability/climate change. Generally this person was from the sustainability team within the Council. Sample achieved In total, complete responses were received from 29 local authorities out of 33, a response rate of 88%. This gives the survey considerable validity in terms of representing the position in London.

3.2 KEY FINDINGS FROM LOW CARBON SURVEY OF LONDON COUNCILS CO2 Reduction Targets 3.2.1 All Councils had carbon reduction targets but they varied. The average annual carbon

reduction target was 3.4%. Sutton and Kensington & Chelsea Councils had the highest levels at 6.7% per year and Lewisham and Westminster had the lowest at 1.3% per year.

The Mayor of London’s headline target for a 60% reduction in CO2 emissions for London by 2025 (with 1990 as the base year) was considered by most respondents as unrealistic; only 17% thought it was achievable and 24% did not know if it was achievable.


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Low Carbon priorities 3.2.2 Councils were asked to choose three priorities with regard to climate change policy. These

are ranked below by the number of mentions they received:

London Councils low carbon priorities Reduction of CO2 emissions 64% Energy efficiency 57% Reducing fuel poverty 50% Waste recycling 50% Waste minimization 29% Low carbon transport 14% Use of renewable energy/heat 14% Urban greening 7%

Other priorities mentioned include cost saving, job creation, sustainable materials, climate change adaptation/flood risk, water conservation, biodiversity, green economy, and air quality. Nearly all of the councils had their own Climate change/Sustainability team with a wide range of responsibilities working across Council departments.

Low carbon infrastructure plans

3.2.3 Encouragingly, 75% of all London councils were planning low carbon infrastructure investment over the next three years. The most popular were Heating Networks (66%), Combined Heat & Power units (62%) followed by Green infrastructure (52%). 9 councils (31%) were planning waste to energy conversion plants. These proposals could generate significant commercial opportunities for London’s low carbon businesses if local authority procurement processes can be aligned appropriately. Retrofitting plans and solutions for Council buildings

3.2.4 To date some 40% of London’s social housing stock has been subject to partial or total retrofitting representing on average 6,700 housing units per borough or potentially up to 200,000 units in London as a whole. With 60% of social housing still to be retrofitted, clearly there are still significant opportunities for the City’s low carbon firms in the retrofit sector.


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The most cost-effective types of technology for retrofitting housing stock have been the relatively low technology cavity wall and loft insulation (96% of councils). Down the scale are solar photovoltaic panels (35%), double-glazing (35%), solid wall insulation (30%), combined heat and power (17%). Expenditure on retrofitting social housing stock

3.2.5 The average expenditure by Councils on retrofitting their social housing stock in the last financial year (2011/12), was £5.4 million ranging from £100,000 to £13 million per council. Although only 12 councils were able to supply this information, if their average annual expenditure is applied to all boroughs, the total spend for London would be £178 million per year. Retrofitting plans over next 3 years

3.2.6 Only 12 Councils specified how many social housing units approximately were planned for retrofitting over the next 3 years. The total number of units was 33,068, with one LA planning over 7,000 units and the rest between 500-4,000 each. Use of funding initiatives

3.2.7 The retrofitting programme has been funded mainly by Energy Suppliers through CERT (Carbon Emissions Reduction Target), CESP (Community Energy Saving Programme) or similar; 89%, Decent Homes programme: 78%, Council/ALMO funded: 78% and only 6% was tenant funded. Several also mentioned SALIX. 96% of councils are making use of the Mayor’s RE:NEW energy efficiency project. Council Non-residential buildings

3.2.8 The approximate spend in the last financial year (2011/12) on energy efficiency and/or renewable energy measures on Councils’ own non-residential buildings such as schools, town halls, council offices etc. was £0.87 million. London wide expenditure was estimated at £29 million per year. Based on current levels of local authority expenditure,

“Ideally we would like to retrofit as many properties as we can afford to / receive funding for (bearing in mind the impact of Green Deal and Eco). We are aware that the UK has a target of an 80% reduction in carbon emissions by 2025, and a fundamental part of that will be improving the performance of existing housing stocks.” London Borough of Hounslow


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the non-residential sector appears to represent a smaller market for London’s low carbon businesses. 42% of councils have made use of the Mayor’s RE:FIT programme to appoint an energy service company (ESCO) to carry out energy efficiency measures to public sector buildings such as schools, town halls and other council offices. Others are looking into this. Feed-in Tariffs

3.2.9 Three quarters of London councils confirmed that the continued uncertainty over Feed-in Tariffs and/or Renewable Obligation Certificates has impacted on the scale or timing of their plans. Comments made by the respondents reflected the loss of confidence caused by the Government’s decision to cut the tariff. Green Deal

3.2.10 The majority (54%) of councils were not sure yet what their Council’s likely role in the introduction of the Green Deal and Energy Company Obligation will be due to uncertainty about the scheme. 27% (7 councils) anticipated acting as a promoter only of the scheme, 8% (2 councils) will act as a producer undertaking assessments of properties and passing them onto Green Deal providers and only 3 Councils expected to act as a provider of long-term finance and an installation service. Councils are looking at various ways of ensuring that the Green Deal creates jobs and opportunities for businesses in their local area. These include: working with education and training providers to ensure individual skills and those of

local supply chains match opportunities e.g. in the insulation sector; inclusion of economic benefit clauses in tender documents and Green deal

contracts; as a provider, there would be more scope for working with local supply chains to up

skill local people. Transport fleet conversion to low carbon

3.2.11 More than half (54%) of Councils’ vehicle fleets include low carbon or ultra-low carbon vehicles. Of those who don’t currently have such vehicles, 50% plan to introduce them over the next 3 years.


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Planning policies for Low Carbon 3.2.12 The vast majority (96%) of councils encouraged all new homes to achieve Code for

Sustainable Homes (CSH) level 4 in accord with the Government’s target to achieve CSH Level 6 by 2016. In the case of Sutton Council, commitments were required from developers to connect to or contribute towards decentralised energy networks in order to achieve Code level 4 which is a condition for ‘BREEAM Excellent’ classification. Nearly all councils exceeded the ‘Merton Rule’ for commercial buildings to generate 10% of their energy requirements through on-site renewable sources, although some considered this too low to achieve CSH Level 6 aspirations. Some local authorities now apply a 20% target. Other measures encouraged or required through the planning system highlighted through the survey included: SUDS (Sustainable Drainage Systems) - Passive measures, e.g. building orientation Water efficiency measures, BREEAM Excellence, Sustainable travel planning, e.g. electric vehicle charging points, bike storage, car free developments - Sustainably sourced materials - Biodiversity requirements, e.g. habitat/species protection. Waste management interventions

3.2.13 The top intervention to support the achievement of waste and recycling targets over the next 12 months was food waste collection (83%) followed by business waste recycling (61%), and increasing the size/number of household recycling bins (61%). Many councils are focussing on educating residents on waste recycling. Two thirds (67%) of respondents currently provide recycling services for businesses. 61% of respondents plan to make capital investment in waste or recycling facilities over the next 3 years. 35% currently contract with SMEs, voluntary sector or third sector organisations for waste and recycling collections. Economic development of Low carbon goods & services sector

3.2.14 55% of councils said they refer to support for local businesses and jobs in Low carbon sector in their Economic Development Strategy and 32% said it was mentioned in their Local Development Framework


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Although several councils had a general local business directory, 81% did not currently have a directory of LCEGS companies in or close to their area. The general consensus was that this data is very hard to obtain. 13 London councils (46%) stated that they currently offered business support to firms in the LCEGS sector but this was generally part of a generic business support activity. There are some exceptions in north London where the Green Light North London project is being delivered in Islington, Waltham Forest, Haringey, Enfield, Hackney, Camden and Barnet.. The main barrier that Councils face in developing the low carbon sector in their area is a lack of internal resources to manage any intervention (84%). Other main barriers are: lack of knowledge of low carbon sector businesses (60%), limited understanding of opportunities for/barriers to growth (52%) and it is not a council priority (44%). Almost all respondents (96%) believed that the public sector should do more to support the growth of the LCEGS sector in London. Local procurement policies

3.2.15 Over half the councils (59%) indicated that their procurement process for larger contracts allowed for local procurement commitments and engagement with local small and medium size companies to be included and targets set. Despite this, where Council contracts included low carbon measures, 63% of councils did not currently require their contractors to provide contract opportunities to local companies offering low carbon expertise. This suggests that further significant improvements are required to local authority procurement systems to support the growth of the low carbon economy.


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4. WHAT LOW CARBON SECTOR SME’S WANT

4.1 INTRODUCTION

Sample achieved 4.1.1 This section is based on a survey of SMEs in London who were selected from relevant

SIC codes that most reflected the LCEGS sector. The aim of the survey was to find out what issues the industry was facing and what business support LCEGS companies would like from their local authorities. 50 responses were received covering many of the LCEGS sectors based in 17 London boroughs. Almost 30% of respondents provided ‘Environmental Consultancy and Related Services’ and almost 40% were from sectors not listed on the questionnaire, including double glazing, architectural design, commercial property management (including metering, cost / carbon measurement) and marketing and communications for an environmental project.

4.1.2 63% of respondents provided services only (e.g. consultancy and training). About one third provide a blend of products and services. All respondents to the survey had been trading for six years or more and the majority had been trading for more than 20 years;

4.1.3 All respondents were turning over more than £51k per annum, with 26% turning over

£15 million or more. In this turnover category, one business stood out as an exemplar


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of high growth, they are 6-10 years old and ‘invest in low carbon projects in emerging markets’. The other high growth examples provide the following services:

‘One stop shop design and build service of office interiors to SKA or BREEAM

standards’ ‘GIS and sustainable agriculture consulting’ Waste management Solar PV, Solar Thermal, Air Source Heat Pumps Alternative Fuels

The youngest companies in the survey typically employed less than 10 people and turned over less than £1million. They offered environmental consultancy, communications on environmental projects and waste management services. All but two companies employed less than 250 employees. 81% of respondents employed less than 100 people and just under 30% employed less than 10 people.

4.2 BUSINESS TRENDS 4.2.1 Growth trend

40% of businesses were growing and 36% were static. Of the 24% that thought their business was contracting, they cited a drop in public sector procurement and market competition as the main reasons. The main factors that had affected growth are summarized below:


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The majority of those businesses citing market competition as the main effect on growth were the older businesses in the survey i.e. those more than 20 years old. The younger businesses were not affected by this yet. More than half of businesses have been affected by changing government policies and almost the same number by public sector procurement.

Some businesses cited the recession as a factor, particularly in the construction sector, this quote from a hydro / water management consultancy sums it up:

‘The Construction industry is contracting. Bad news in the economy is being perpetuated by the press. Many companies in the environmental service sector have gone out of business. Olympics construction in London has helped. Businesses are carrying out work at below cost to secure work.’

‘the majority of our work has been providing design services to the public sector. With the recession and reduction in Government spending we have obviously been affected.’

4.2.2 Future growth

Almost all businesses see themselves positively growing (52%) or static (44%) with the remaining 4%, who expect to decline, facing increased market competition in the renewable consulting and solar PV sector. The main factors that SMEs believed will affect their growth over the next two years were competition(64%), followed by Government policy (48%) and public procurement (40%), which reflects the importance of the public sector market to LCEGS companies.


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64% of businesses thought that their growth was affected by local/regional/national government policy or lack of it. This question elicited the most feedback, with almost a third of respondents wanting to feedback more. In summary, the areas of policy where businesses were most concerned were as follows; changes in government policy such as the Feed-in-Tariff which was considered to have had a major impact on investor and customer confidence, debt recovery from clients, and the current recession and public sector cutbacks.

‘Most of our work is with the public sector, particularly local authorities but also London and national government. The public spending cuts have therefore had a significant impact on our business, especially following the lack of statutory requirements on climate change and other sustainability issues. Local authorities are now focusing resources on statutory duties and there is a view amongst some that climate change activity is an optional extra rather than a necessity. The scrapping of the national performance indicators (including those on climate change) for local authorities has also had a negative impact.’ Environmental Consultancy and Related Services / Environmental Monitoring, Instrumentation and Analysis


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4.2.3 Customer profile Most respondents sell to large businesses (72%) or local authorities (64%). Around half also supply small businesses, housing associations and other public sector organisations. Most companies were focused on business in London and the South East with few venturing into Europe. Lack of local knowledge and a different policy framework were seen as barriers to export markets.

4.2.4 Use of local labour

The average proportion of companies’ staff coming from the borough they are based in was approximately 33%, which indicates that local companies will employ a significant proportion of local residents. 32% of businesses employed more than 50% local people and 8% employed only local people.

4.3 SUPPORT FROM LOCAL AUTHORITY

4.3.1 68% businesses said that they received no support from their local authority, however

out of those that did, 20% received opportunities to tender, 8% received tender alerts and 4% received training/workshops.


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64% of businesses would like to receive assistance with opportunities to tender, 44% would like grant information and 44% would like procurement alerts.

‘For local authorities to offer more tender opportunities to SME’s rather than rolling up work into large framework agreements. SME's should NOT be forced to work for these large contractors. They have a bad history of failure taking smaller business down with them. A lot of the other types of support are, in my view, well-meaning but misplaced and not good value for money’. Construction Company

4.3.2 Public sector contracts

Nearly all the SMEs (80%) had attempted to secure contracts from the public sector. 58% of respondents said that their turnover from the public sector had decreased, however 19% have seen an increase.

Some 46% of businesses said that the projects were too large for them, with 29% having a limited knowledge of public sector opportunities. Generally a lot of negativity surrounds public sector procurement. Typical comments made were as follows: “It’s a closed shop so no outside companies ever invited and tender list only

updated every 3-5 years” “We have joined many framework agreements but have received no tenders.”


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“Slow and difficult to work with compared to private sector.” “Reluctance to change, attitude better the devil you know. It feels at times tendering

process is just a paper filling exercise, to appear to be acting in a transparent manner.”

“Reduction in number of contracts has led to much greater competition”

‘All public sector procurement places most emphasis on lowest price rather than best value, so the most desperate architect that is close to insolvency will always win the tender with an unviable price simply to buy turnover. We are a very competitive firm but now operating on a Zero profit basis and yet we are being undercut by up to 50% on our fee bids to local authorities Public sector work is now a total waste of time for us.’ Architect

4.4 IMPACT OF GOVERNMENT POLICIES

Government Programmes e.g. Carbon Trust, Energy Saving Trust, Envirowise, WRAP etc. were thought to have had a positive effect, as well as the UK Low Carbon Transition Plan 2009, UK Legislation and Feed-in Tariffs. The latter three have possibly had a direct impact on generating income for the LCEGS sector.

All of the options were thought to have had either no effect or positive effects on the businesses in the survey. Carbon emission reduction targets have had the most positive impact on business among various policies as well as UK legislation.


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Future impact of government policies Businesses were tentative about the future impact of policies with the majority opting for ‘slightly positive’ in most cases. The Green Deal received the highest number of ‘Very positive’ responses but this still represented less than 5% of the sample.


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Other comments made by respondents included a detailed view on biofuels policy as well as views on Green Deal and other policies/initiatives:

‘EU RED and RTFO legislation was quite heavily consulted on with stakeholders in the UK and worked well. However, delays in consulting on Fuel Quality Directive, setting annual obligations beyond 2014, ILUC, mean that we do not know the policy that will set the base for the UK biofuels industry. International biofuels policy in general is critical to the industry and we have fared well in being involved in consultations in advance of legislation being implemented. Continued consultation combined with ambitious and challenging legislation on sustainability and increasing the scale of carbon reductions would put UK industry ahead of the rest of the world in developing technologies and manufacturing expertise for the future.’

‘Not enough information provided by government and local authorities to SME's’

‘The UK construction industry is too far away from reaching the governments targets for zero carbon buildings. More needs to be done to show property developers and contractors what they need to be doing’


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5. CLIMATE CHANGE – CHALLENGES AND OPPORTUNITIES FOR LONDON. 5.1 THE LOW CARBON ECONOMY IN LONDON 5.1.1 The Mayor’s climate change mitigation and energy strategy for London sets out the

challenging target of reducing GHG’s to 60% of 1990 levels by 2025. Achieving this objective represents a huge challenge – but also a major economic opportunity for London.

London is already the largest centre for the low carbon economy in the UK33 - the LCEGS market in London was worth just under £23 billion in 2009/10, representing just under 20% of the UK market. London already has around 9,200 companies, employing 160,000 people, involved in the low carbon economy.

The role of the public sector The key drivers of growth for the Low Carbon and Environmental Goods and Services (LCEGS) sector are rapidly increasing consumer demand for low carbon products and services and global (and local) efforts to reduce carbon emissions leading to climate change mitigation or adaption. The public sector can play a critical role in stimulating the low carbon economy, by: using its statutory powers and responsibilities (for example planning/development

management) to ensure that new housing and commercial developments promote sustainable travel, set high standards of energy efficiency and utilise low carbon heat and power as well as making use of the local supply chain during and post construction.

investing in retro-fitting energy efficiency and renewable energy measures to reduce

emissions from the social rented housing stock and public buildings, including schools reducing the CO2 footprint of local authority services by investing in low carbon

vehicles, reducing the amount of biodegradable and other wastes sent to landfill and

33 The London Low Carbon Market Snapshot, Innovas Solutions Ltd, October 2011


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the indirect or embodied emissions arising from the goods and services commissioned by the public sector

raising awareness of and enabling households and businesses to participate in the

Green Deal and other energy efficiency/renewable energy programmes setting clear local targets for CO2 reduction, renewable energy, waste diverted from

landfill and other measures and monitoring local authority performance. Ensuring that its main contractors engage with the local supply chain including

LCEGS companies and provide local employment and training opportunities.

5.2 OVERVIEW OF THE TOOLKIT In the current, challenging climate for public spending, it isn’t easy being green. Skills for Climate Change has developed a seven part toolkit to help local authorities prioritise and deliver action that will contribute to both reducing carbon emissions and stimulating the local low carbon economy. The toolkit can be applied both to councils own actions and investments and to support local authorities in negotiating with private sector developers to increase the local economic and community benefits delivered through private sector investment. The key steps are:


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Embedding the low carbon agenda STEP 1

Identifying low carbon procurement opportunities

Developing an understanding of low carbon

businesses in your area

Using existing procurement tools more effectively

Using s106 planning agreements to secure local

procurement opportunities

Monitoring and evaluation

THE TOOLKIT – SEVEN KEY STEPS

STEP 2

STEP 3

STEP 6

STEP 4

STEP 5

Delivering business support for SMEs

STEP 7


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6. SEVEN STEPS TO CREATING LOW CARBON JOBS AND BUSINESS GROWTH IN YOUR AREA

6.1 STEP 1 EMBEDDING THE LOW CARBON AGENDA ACROSS THE COUNCIL

How you can help Local authorities can help grow the low carbon economy in their area in at least six ways: 1. discharging their statutory powers and duties; 2. investing in energy efficiency and renewable energy for social housing and public

buildings; 3. working with suppliers to reduce the carbon footprint of goods and services procured

by the Council; 4. raising awareness of the low carbon agenda and enabling businesses and

households to participate; 5. opening up access to contract opportunities to low carbon businesses via their own

procurement and through planning obligations;

6. signposting low carbon businesses towards effective business advice and/or overcoming gaps in the provision of specialist support.

As public sector expenditure continues to tighten as part of the Government’s deficit reduction plans, local authorities will continue to face very real challenges in determining spending priorities over the next three years. As our survey of London’s Boroughs shows, ensuring that the low carbon agenda is embedded across all Council policies and investment decisions is challenging; some of the barriers include:


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Barriers to embedding low carbon agenda a lack of statutory targets for emissions reduction and other key climate change

measures limited and fragmented resources; often no single Council department will have

responsibility for the low carbon agenda tensions in procurement processes between supporting local SMEs and achieving

value for money a limited understanding of the local low carbon company base.

In this context, local authorities have many competing demands on resources; it will almost certainly be necessary for Councils to adopt an incremental approach to embedding the low carbon agenda across policies and investment programmes. STEP 1 of the toolkit sets out a fourteen point checklist to provide a common starting point for Councils seeking to develop the low carbon economy in their area; some local authorities will already be making important progress in a number of these areas.


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Embedding the low carbon agenda: a 14 point checklist Discharging statutory powers and duties

Yes No Notes/Actions 1. Does your Local Development Framework include policies which require

developers to exceed the requirement for new commercial buildings to generate at least 20% of energy requirements from on-site renewable resources? Does it include policies (explained in a Supplementary Planning Document) to ensure local companies have access to tendering opportunities from commercial developments?

2. Does the LDF consider opportunities to deliver district heating through low carbon sources for larger housing projects or clusters of sites? Is there scope to develop community-based renewable energy schemes Are larger energy infrastructure projects of this type included in your current or proposed Community Infrastructure Levy charging schedule?

3. When are your waste collection and disposal contracts scheduled to be re-tendered? Is there scope to increase separate collections of waste for recycling, including collection and treatment of food waste?

Investing in energy efficiency and renewable energy for social housing and public buildings 4. Does the Council plan to accelerate the retrofitting of social housing with

insulation and energy efficient boilers and electrical appliances? If so is there scope to align these works with GLA’s RENEW programme and the Green Deal?


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Yes No Notes/Actions 5. Does the Council have a programme of similar works for its own buildings and

local schools? Is there scope to invest in renewable energy/heat to generate a return on this investment?

6. Does the Council plan to introduce emissions reduction measures for street lighting, traffic signalling etc?

Working with suppliers to reduce the carbon footprint of goods and services procured by the Council 7. Has the Council calculated the embedded emissions/carbon footprint of the

goods and services it procures?

8. Does the Council operate a sustainable procurement policy? Is there scope to work more closely with suppliers in the key areas of energy, water, construction and facilities management?

Raising awareness of the low carbon agenda and enabling businesses and households to participate 9. Has the Council engaged with communities and private sector landlords about

the costs and benefits of participating in the Green Deal and Energy Company Obligation?

10. Has the Council considered becoming a Green Deal provider or partnering with a private sector provider in order to deliver the Green Deal?

Opening up access to procurement opportunities for low carbon businesses and signposting them towards effective business advice and/or overcoming gaps in the provision of specialist support 11. Does the Council have a register of businesses supplying low carbon goods and

services?


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Yes No Notes/Actions 12. Do the Council’s procurement procedures for larger contracts allow for the

inclusion of community benefits such as commitments to offer sub contract opportunities for local suppliers and local employment?

13. Does the Council have a local procurement code and/or clauses for s106 agreements requiring commercial developers and their contractors to offer subcontract and supply opportunities to the local supply chain?

14. Does the Council understand the barriers to growth faced by local low carbon SMEs? Are there issues – for example skills, access to finance, procurement opportunities – that could be addressed by bringing SMEs together through low cost networking and other approaches?


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6.2 STEP 2: IDENTIFYING LOW CARBON PROCUREMENT OPPORTUNITIES ACROSS THE COUNCIL

Developing senior officer and political buy-in to the process is an important starting point if the development of the low carbon economy is to become embedded across the Council.

Step 2 of the toolkit is focused on identifying opportunities for low carbon procurement at a sufficiently early stage to ensure that opportunities for local low carbon firms can be built into the procurement process at the outset, rather than ‘as an afterthought’ at a later stage when they may have a lesser impact.

Identify all relevant Council departments buying low carbon goods and services

The council departments which are most involved with planning, commissioning, procuring or influencing low carbon investment typically include:

Housing Environment/Neighbourhood Services Property services Regeneration Education Planning Sustainability/Climate change team Corporate policy Procurement

Most Councils will develop departmental spending plans during the Autumn of the preceding financial year with a view to publishing and consulting on its budget in February or March.

Identifying a low carbon champion To ensure that opportunities for low carbon investment are optimised, Councils should identify a ‘low carbon champion’, preferably in a cross-cutting department (potentially the Chief Executives or Corporate Policy) with the role of influencing local authority investment and procurement plans. The post holder – who is likely to undertake the low


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carbon champion role as part of a wider portfolio of work – would also be an important interface between the Council and low carbon businesses. Create an internal network of key individuals in each department to collect information on what low carbon opportunities, developments and policy changes are coming up in each of their departments. In some councils, the procurement department will have a forward list of capital projects. Keep up to date with funding sources for low carbon capital projects Procurement in this field will very often be triggered by a new funding initiative from public or private sector sources. Some of the current funding sources available are listed in Appendix 2.

6.3 STEP 3: DEVELOPING AN UNDERSTANDING OF LOW CARBON BUSINESSES IN

YOUR AREA 6.3.1 Developing a clear understanding of the sectoral specialisms, strengths, weaknesses

and capacity of low carbon businesses in your area is a critical step in growing the local low carbon economy. Efforts to identify low carbon procurement opportunities and to open up procurement processes to local firms may be in vain if they are not tailored towards their particular strengths and specialisms.

Mapping key sectors

6.3.2 The GLA commissioned a snapshot of London’s LCEGS sector which was published in 201134. This does not provide a detailed local level analysis of the sector however. Councils may wish to enhance their understanding of the local low carbon sector by commissioning mapping research and/or local surveys of LCEGS firms.

Historically, low carbon sectors have been difficult to define through conventional mechanisms like the Standard Industrial Classification (SIC). The SIC comprises a large number of economic sectors which are likely to include some firms engaged in low carbon activity – for example construction – but also a large number of sectors that may contain few low carbon businesses.

34 The London Low Carbon Market Snapshot, Innovas Solutions Ltd, October 2011


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In Appendix 3, we have included a long list of SIC codes which local authorities may wish to draw from in mapping the local LCEGS sector. Some of the sectors which are likely to feature prominently in any mapping activity will include

construction, including installation of energy efficiency and renewable energy

measures waste management recovery and recycling energy management manufacture of low carbon products environmental consultancy.

Engaging with Trade Associations

6.3.4 Most relevant national or local low carbon sector trade associations have websites with searchable member listings that can be a valuable resource for finding suitable, local suppliers. They may also be an important source of views on the strengths and weaknesses of some LCEGS sectors and the barriers to growth facing local firms. A list of relevant trade associations is shown in Appendix 3.

Commissioning a local business survey

6.3.5 Once issues around identifying the local LCEGS company base have been resolved, Councils may wish to commission a small survey of local firms to identify the specialisms, opportunities and barriers to growth facing the sector in your area. In developing the procurement toolkit, Skills for Climate Change surveyed more than 50 SMEs across London. The survey results are summarised in section 4.

A local LCEGS survey could include the following key questions:

Which low carbon goods and services do you provide? How long have you been trading? How many people do you employ (full time/part time) and what is your approximate

turnover? What are the main factors that have affected the growth of your business over the

last 12/24/36 months? What are the main factors that are likely to affect growth over the next 12/24/36

months?


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Have you tendered for public sector contracts over the last 36 months? Has turnover from public sector contracts increased or decreased over this period?

What, if any, are the barriers to tendering for public sector contracts? Would you like to receive more support from the public sector to help develop your

business? If so what?

Establishing a low carbon business forum or network 6.3.6 Establishing a business forum or network can be an effective and low cost mechanism

to bring businesses together to discuss common themes or issues, identify opportunities for collaboration or to meet local authority procurement staff. Some of the existing low carbon business networks across London include:

Westminster Sustainable Business Forum Lambeth Low Carbon Economy Partnership – Project Dirt Camden Climate Change Alliance

Mapping specialist business support services

6.3.7 Step 6 of the toolkit and Appendix 5 detail some of the sources of both generic and

specialist business support available to low carbon businesses in London. As part of the process of engaging with the low carbon sector in your locality, Councils may wish to map the specialist business support available locally through either the public or private sector, with the aim of identifying either duplication of public-funded support or specific gaps in provision. The ‘Solutions for Business’ Framework developed by BIS provides a useful starting point for this process, identifying the key themes under which businesses may require support, including:

Research and development Access to Finance Exporting Sales and marketing Improving resource efficiency Workforce skills.

6.3.8 Meet the Buyer event for low carbon SMEs


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Once a database of the local low carbon sector has been established a Meet the Buyer event can be held. Holding an event where the local low carbon supply chain can meet with selected buyers such as Council contractors, main construction companies working on developments in the borough and major local organisations seeking to reduce their carbon footprint, is an excellent way to give local SMEs access to buyers and opportunities they would otherwise have great difficulty in meeting.

6.4 STEP 4: USING EXISTING PROCUREMENT TOOLS MORE EFFECTIVELY Making the case for Local Procurement 6.4.1 Over half the councils in the Low carbon survey indicated that they now build in local

procurement and engagement with local SMEs into their procurement process for certain larger contracts, although over 60% of those Councils did not apply these for projects with a significant low carbon element. Thus there is a significant untapped opportunity for Councils to extract local benefits from major capital works. Those that are developing local procurement policies do not always have the resource or mechanism to ensure that commitments made in tender documents are actually carried out. Many only apply such requirements selectively rather than including them as the default.

Benefits of Local procurement

6.4.2 There are many benefits of procuring locally where a suitable supplier exists. The use of local suppliers is in fact part of the responsible procurement spectrum of measures to reduce road miles caused by bringing in suppliers and their workforce from outside the area. The benefits can apply to the Buyer as much as to the local area. These include:

Direct and indirect economic benefits are retained within the local economy The reduction in transport costs and reduced carbon footprint Local knowledge of the area Reduction in risk of delays Better access to senior management and opportunity for face to face meetings. Eliminating the problem of bringing in and finding temporary accommodation for an

outside labour force. Stocks of materials held locally Local companies employ local labour with a shorter journey from home


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Public Services (Social Value) Act 6.4.3 The recently passed Public Services (Social Value) Act 2011 requires public authorities

to have regard to economic, social and environmental well-being in connection with public services contracts. The authority must consider— (a) how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and (b) how, in conducting the process of procurement, it might act with a view to securing that improvement. This act, which comes into force early in 2013, gives legal force to the efforts of Council officers to promote community benefits clauses in their procurement processes.

6.4.4 A number of local procurement initiatives have taken place in London over the past 6 years which have demonstrated how major contractors bidding for Council contracts, will offer significant local procurement and employment if encouraged to do so. This is very much a case of ‘If you don’t ask, you don’t get’.

6.4.5 The construction industry lends itself well to local procurement as it outsources almost all its work to building trades and is labour intensive. It is also a major player in the low carbon sector, being responsible for all retrofitting of buildings, energy reduction measures, renewable energy installation etc. Therefore, as a starting point, Councils should ensure that a significant proportion of capital works procurement on their social housing and commercial buildings carries local procurement requirements.

The iCAM project in Camden and Islington was able to obtain access to over 1,000 tender invitations for local SMEs resulting in 230 contracts being awarded worth £60m and creating/safeguarding over 800 jobs over a 6 year period. Examples of projects in Camden and Islington above the OJEU threshold, where local procurement and employment were built in to the contracts, include:

Building Schools for the Future (both boroughs) Decent Homes (both boroughs) Sports Centre redevelopment (both boroughs) Camden Homes for Older People Joint Catering Contract Camden Highways contract Community centre & residential development (Camden)


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Market barriers The ability of local SMEs to access the supply chains of major contractors working in their area is recognised as a significant market barrier by the European Regional Development Fund as is that of local residents seeking jobs, which is why projects such as iCAM (covering Camden and Islington), Supply Cross River (Southwark, Westminster, City of London and Lambeth) and East London Business Partnership (Olympic and Thames Gateway boroughs) have all received ERDF funding. Unless the contractor or large buyer is based in the particular borough, they will rely on their existing supply chain as they will be generally unaware of the local capability. Further, many of the SMEs may lack the tendering skills and appropriate accreditation to even qualify for a tender list. The local procurement schemes mentioned have all provided training workshops to local SMEs to help them become ‘fit to tender’ and to improve their chances of winning tenders. Linking local procurement to strategies and policies

6.4.6 It is useful to identify strategies and policies that already exist which include local procurement as an objective. This provides a local strategic context that can be referred to in any documentation and greatly enhances the case for including local procurement as part of a contractor’s targets and obligations. Typically local procurement is referred to in a local authority’s Economic Development Strategy (55% of councils), Local Development Framework (32% of councils) and /or Sustainable Communities Strategies (18%).

Specific reference to the low carbon sector would at present be more likely to appear in

a Carbon Management Plan (LB Sutton) or Climate Change Strategy (LB Camden). However, when the importance of the sector is recognised, it is likely to become part of mainstream borough strategies.

Our 2020 Vision: Lambeth’s Sustainable Community Strategy 2008 – 2020 “Using public sector procurement policies and procedures to create a level playing field for all companies including SMEs by:

Working with primary contractors to open their supply chains to local companies

Supporting initiatives to raise the capacity of our local businesses to ensure they are able to capitalise on these opportunities by being ‘fit to supply’” – p 24


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Local procurement code of practice

6.4.7 It is recommended that Councils adopt a Local Procurement Code of Practice. This adds significant weight to negotiations with major companies tendering for Council business as well as providing a clear process they can follow. It can be referred to in contract notices in the Official Journal of the European Union (‘OJEU’) and form a part of tender documentation. Some form of Code is generally required if the Council is including local procurement obligations in section 106 planning agreements. In this context the code would apply to developers who have sought planning permission to develop a site and their main contractors would be required to implement it (see Step 5 in the Toolkit). However, since the code describes the process that contractors should follow to ensure supply chain opportunities are opened up to local companies, it can readily be adapted to the Council’s own procurement framework or single contractors both for construction and non-construction contracts.

Content of the Local Procurement Code

6.4.8 The Code should contain the following main elements: References to Council strategies and planning guidelines which have local

procurement objectives with reference to use of the green supply chain Rationale for a code e.g. the benefits for the local economy, a tool for

regeneration and sustainability. Statement of provision by the Council of a service to assist with identification

of suitable local companies including low carbon expertise and provide an updated directory of local companies.

Setting a target percentage of contract value to be procured locally (around 10%).

Obligations of the Main Contractor:

Engagement with the Council local procurement unit – regular meetings during the procurement phase

Provision of their procurement schedule with reference to low carbon goods and services required

Identification of subcontracts and materials supply opportunities within their procurement schedule where local companies can be added to a tender list.

Passing down local procurement obligations to subcontractors


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Co-operation with regular monitoring of local procurement results – this is often done through the contractor keeping a Local Procurement Log and reporting quarterly to the Council

Participation in tendering workshops and events for local SMEs Contact details for Council local procurement team

Local Procurement Team

6.4.9 It should be emphasised that for any local code to work, the Council will need to have in place a local procurement team, either in-house or contracted out, or part of an externally funded Local procurement initiative, to liaise with contractors to ‘make it happen’. Without this, it will be much harder for them to deliver benefits and they are less likely to offer them in their bids. Local procurement and EU regulations

6.4.10 Tactics for seeking community benefit offers from 1st tier contractors during the formal EU procurement process are outlined below: Contract notices The following paragraphs contain wording that can be inserted into the ‘Additional Information’ section of a contract notice being published in the Official Journal of the European Union (‘OJEU’):

“Please note that the Council runs a Local Procurement Initiative (and has a Local Procurement Code) which it may invite you to participate in.” London Borough of Camden

“Under this [procurement / project] the [contractor / developer / supplier / service provider] is required to participate actively in the economic and social regeneration of the [locality of and surrounding the place of delivery for the procurement / project] [community served by the contracting authority]. Accordingly contract performance conditions may relate in particular to social and environmental considerations.” OR “Conditions relating to environmental and social requirements of the contracting authority may be included in this contract.” Birmingham City Council : Template wording for Contract notices


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This will flag up at an early stage the Council’s stance on the use of local supply chains. The wording allows contracting authorities to include consideration of social and economic factors in contract award decisions, and the contracting authority can be more specific about its requirements in the contract documents.

6.4.11 Respondents to the OJEU advertisement can be sent a summary ‘flier’ describing the

local procurement/employment initiative, the availability of low carbon expertise locally and the benefits for contractors in the response pack sent out to them by the Council. Pre-Qualification Questionnaire

6.4.12 It is not required to have a direct question on local procurement in the initial PQQ which is designed to test the eligibility and competence of the companies expressing an interest. A general statement and question to test their experience of delivering community benefits would suffice e.g.: Tender Questions and Method Statements

6.4.13 Some examples of the specific wording used by London boroughs on larger contracts have been selected here all of which were subject to legal scrutiny prior to being issued.

“We require clear evidence of how you will deliver improved economic and social outcomes in relation to this contract and examples of where you have done this elsewhere. Do you have experience of delivering any Local Procurement/Employment benefit schemes/initiatives? If so please provide details.”

“Outline your policy for ensuring that full and fair opportunity is offered to all suppliers, particularly those locally based in and around the [relevant Borough]. Please also detail how this is externally communicated and/or marketed. Describe your company’s involvement in local partnerships, community groups and business organisations, as appropriate. “ Procurement guidance, London Borough of Croydon


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Islington Council put the following wording into the Regeneration & Equalities section of their contract to refurbish the Ironmonger Baths:

A less direct question was put into the Decent Homes contract tender by Camden Council:

Birmingham City Council, which champions the use of community benefits requirements in its larger contracts, requires a full method statement to be signed off by the tenderer as follows:

“Please detail how you propose to: 1. Provide opportunities for employment, training and other measures through the construction phase of the IRB refurbishment. 2. Engage with local businesses to encourage them to tender for the provision of goods and services during construction. 3. Provide opportunities for employment, training and other measures through the construction phase of the IRB refurbishment. In preparing your response, it is expected that you will work with Islington Council and icam2 to develop your approach. The contacts are:……” London Borough of Islington

“Supply-chain initiative: · What steps will you take to promote sub-contract and supply opportunities to Small Businesses?” Decent Homes contract: London Borough of Camden

“I confirm that this method statement sets out the actions that will be undertaken to ensure the achievement of the Contracting Authority’s jobs, skills and supply chain requirements. It is recognised that delivery of these requirements will be a contract condition [and will be assessed as part of the decision to award the contract].” Birmingham City Council


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The next questions/method statements show the power of having a specific strategy to refer to:

*In this case the Council’s Community Strategy contained the following specific wording: Support for local businesses, as direct suppliers, in the supply chain, and

through assistance to be “fit to compete” Work with main contractors to use local businesses in the supply chain

An extract from Southwark Council’s procurement guidance also refers to this:

“Describe how the consortium will contribute to the delivery of the Council’s social and economic development objectives as set out in the council’s Community

Strategy* and in particular in relation to targeted employment and training and skills development in construction.” Care Homes contract, London Borough of Camden

“10. Community benefits The Council [expects/requires] all its contractors who provide services, goods or carry out works to assist the Council in meeting social, economic and environment corporate priorities as set out in its Sustainable Community Strategy ….. 10.3 Where the Specification requires, in respect of the supply of goods, the provision of services or carrying out construction works, a Tenderer to obtain them wherever possible locally…..” London Borough of Newham

“Local economic benefits can be built into procurement in a variety of ways including ……. requiring contractors/suppliers to use local companies in their sub-contracting and supply chain arrangements including local economic benefits as part of the evaluation criteria where appropriate.” London Borough of Southwark


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Other examples of questions that have been asked in tenders include:

“Please outline your commitment to employing local companies, labour and material when carrying out this contract (as outlined in the Council’s Local Procurement Code) which is available from ______________“

Supply-chain initiative: “What steps will you take to promote sub-contract and supply opportunities to Small businesses?”

Briefing Bidders – Dialogue Opportunities during the OJEU process

6.4.14 In most large contracts there are generally a number of information and formal dialogue sessions when the Council meets with bidders to brief them further and answer their questions. The opportunity should always be taken to put Community Benefits sought by the Council on the agenda to further reinforce their importance with bidders. This allows for a short presentation on the Council’s Local Procurement and Local employment aspirations and protocols. These briefing opportunities can take the form of:

An Open Day – usually soon after an OJEU advertisement is placed, when a wide range of potential bidders or just those who have expressed an interest, can come and hear more about the project or contract.

Dialogue with short listed bidders – Following the assessment of the PQQs, when bidders have been short listed down to 3 or 4, individual Q&A meetings are sometimes held with the shortlisted bidders prior to submission of tenders. Again they can be briefed on the Council Strategic objectives including Local Procurement.

Tender evaluation and weighting criteria

Assign weightings to criteria and sections 6.4.15 It is recommended that the Local Procurement criteria accounts for between 1-5% out of

the total Tender Evaluation Criteria. Each Local Authority will need to make their own judgement as to what weighting to apply.

An example of a scoring template is show below outlining the criteria on which local procurement is generally judged.


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Evaluation criteria

Poor 1

Satisfactory 2

Good 3

Excellent 4

Loca

l Proc

ureme

nt

Tenderer shows little understanding or commitment to local procurement No target level offered

Local procurement included in contract manager’s objectives but no specific target or approach

Target of 10% local procurement companywide

Target of over 10% Local Procurement Exceeds the LP Code/Initiative requirements

No evidence of Local Procurement Code or process in place

Few supply chain opportunities identified. Local Procurement Code in place but no procedures to engage with SMEs

Adherence in full to the Local Procurement Code/Initiative and demonstrable evidence of how to achieve it

e.g. offers briefing session on project for local companies, mentoring of SMEs, workshops on tendering & targeting of low carbon SMEs

No offer to use

low carbon SMEs

Offers to collect LP outcomes from Subcontractors

Monitoring 6.4.16 In order to demonstrate the value of local procurement to the local economy and ensure

the sustainability of the initiative, it is very important that each contract with a Local procurement obligation is carefully monitored. The contractor will find it straightforward to


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record the outcome of any subcontracts they let but will need to set up a cost code for the contract internally to be able to track purchases of local supplies. The KPIs will vary but those that are recommended for monitoring purposes are as follows:

KPI Description Tender enquiries where an informal approach is made to a local company to see

if they are interested in bidding for an order and/or to give their rates Tender invitations where formal tender documents go out to a tender list which

includes one or more local companies. Tender outcomes whether the local company was successful, unsuccessful or

declined to tender. The value of each tender won Added to the supply chain

when a local company has met the criteria for working with the contractor and although not used on this contract can be considered for work elsewhere.

Accounts opened Accounts opened with local trade suppliers and amounts purchased.

The contractor is normally requested to complete a monitoring ‘Log’ every quarter. Typically this will be a in the form of a spread sheet in which the contractor records all local procurement activity.

6.5 STEP 5: USING S106 PLANNING AGREEMENTS TO SECURE LOCAL PROCUREMENT OPPORTUNITIES

Introduction 6.5.1 Councils also have the opportunity to support growth of the low carbon economy

through the planning system, using the Community Infrastructure Levy and section 106 agreements to influence low carbon investment by the private sector.

All s106 planning obligations imposed by local authorities on developers have to meet the following ‘tests of reasonableness’ set out in Circular 5/2005. They must be: (i) necessary to make the proposed development acceptable in planning terms; (ii) directly related to the proposed development; (iii) fairly and reasonably related in scale and kind to the proposed development;


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The practice of including local procurement clauses in s106 planning agreements35 for larger developments in a consistent manner was pioneered in London by Islington Council in 2005/6 and later incorporated into their Supplementary Planning Document. Camden did the same in 2008. Since then at least 8 other London Councils across London have followed suit as well as several elsewhere in the UK. The mechanism is analogous to local employment clauses and often appears alongside these in s106 planning documents.

The primary function of this intervention by local authorities is to ensure that local firms obtain access to local construction related contract opportunities they would otherwise be largely excluded from. This requires not only a mechanism to ensure that local procurement is part of all major planning agreements but also that the borough has a live database of suppliers including a sub-directory of SMEs specialising in low carbon services, which have been pre-screened and are ‘fit to tender’ and that there is a small business brokerage team to facilitate the process of matching buyers to suppliers. S106 and the Community Infrastructure Levy (‘CIL’)

6.5.2 In April 2010, the Government’s Community Infrastructure Levy Regulations came into effect with a period of grace until 2014 to implement them. Section 213 of the Planning Act 2008 enables local authorities to introduce CIL which is a local development tariff levied on different types or sizes of development, to fund larger infrastructure projects required to serve a number of developments or meet borough wide needs. CIL applies only to physical infrastructure such as schools, community centres, roads, public realm improvements etc. but could also include district heating, other forms of decentralised energy provision or waste management infrastructure.

35 Section 106 (S106) of the Town and Country Planning Act 1990 allows a local planning authority to enter into a

legally-binding agreement or planning obligation with a landowner in association with the granting of planning permission. The obligation is termed a Section 106 Agreement. These agreements are a way of delivering or addressing matters that are necessary to make a development acceptable in planning terms. They are increasingly used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing.


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S106 agreements will continue to be relevant to the issue of local procurement and will continue to cover ‘softer’ investment such as employment & training initiatives, business support and training, local procurement requirements, etc. as well as the physical requirements of individual developments required to ameliorate local impacts. From 2013 it will only be possible to ‘pool’ s106 payments from a maximum of 5 development projects – anything requiring larger infrastructure provision must go through CIL.

Policy Context The Mayor’s London Plan 6.5.3 The regional policy is contained in the London Plan: Spatial Development Strategy for

Greater London, July 2011. The Plan identifies 33 Opportunity Areas for economic development in London. Specific interventions on local employment and procurement are referred to in paragraph 4.6436:

4.64 states: ‘Boroughs are encouraged to investigate with developers the possibility

of providing local businesses and residents the opportunity to apply for employment during the construction of developments and the resultant end use’

Local policy context

6.5.4 At a local level, the local procurement aspirations of Councils are normally referred to in their Local Development Framework and explained more fully in their Supplementary Planning Document. As an example, the City of London which has recently adopted local procurement in its planning requirements, sets out in its Core Strategy the following requirements from developments in its area:

36 London Plan: Spatial Development Strategy for Greater London, July 2011


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Policy CS4: Planning Contributions

As local authority interventions have shown elsewhere in London, it is vital to ensure that local procurement and employment benefits are written in to the s106 planning obligations as well as the Local Development Framework and Supplementary Planning Documents. This gives the Council the necessary leverage to ensure that local procurement and employment benefits become part of each site’s deliverables subject to monitoring rather than just a worthy aspiration. An example of the preliminary wording included in an area specific Supplementary Planning Document is shown below:

Policy CS4 To manage the impact of development, seeking appropriate contributions, having regard to the impact of the contributions on the viability of development, by: 1. Requiring contributions on or off site, in kind, or through financial contributions, which address the City of London’s priorities, including: (i) local community facilities; (ii) environmental improvements, including street scene improvements; (iii) measures to adapt to climate change or mitigate its impacts; (iv) affordable housing delivery; (v) transport infrastructure and service improvements; (vi) training, skills provision and local procurement in the City and City Fringe.

City of London Local Development Framework Core Strategy Development Plan Document, Adopted Sept 2011

Key Principle ES7:

Developers should put in place procedures to ensure small and medium sized local enterprises (local SMEs) have access to tender opportunities for the procurement of goods and services generated by the development both during and after construction, having regard to the councils’ Local Procurement Code of Practice. Earls Court & West Kensington Opportunity Area Joint Supplementary Planning Document Adopted 19th March 2012


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Making the case for local procurement requirements in s106 agreements

6.5.5 Economic development/regeneration arguments Where there is a major regeneration project or large investment in the borough of any kind, economic development/regeneration teams will need little convincing of the need to extract as many economic benefits as possible from it. Such a policy also supports the sustainability agenda in that local procurement minimises the road miles caused by sourcing from outside the area. Much of the low carbon investment is building related so the LCEGS sector stands to benefit directly from a planning policy that ties private sector development (with increasingly stringent carbon emission restrictions) to procuring part of their project needs locally. A mechanism is needed to ensure that local procurement becomes a requirement that the contractor has to meet, rather than an empty promise. Unless there is some leverage of this kind, main contractors will generally stick to their existing supply chain and totally overlook local subcontractors and suppliers. There are examples of major regeneration projects in London where no s106 local procurement requirements have been put in place and the developers and their main contractors are under no obligation to make the effort to get new untried suppliers on board. In such cases the promised cornucopia of contracts and jobs will be never be realised.

Planning arguments Demonstrating examples of good practice is critical: - Camden, Islington, City of

London, Westminster, Southwark, Hammersmith & Fulham and Kensington & Chelsea have all adopted local procurement policies which could be replicated elsewhere in London.

The statistics from the Islington and Camden (later iCAM) and Supply Cross River projects indicated that £60 million and £18 million of contracts were awarded to local companies respectively (which they would otherwise not have been invited for); some 1,400 tender opportunities were offered by the contractors to local companies and nearly 1,000 jobs were created or safeguarded.


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Planners will also want to avoid adding to a developers costs significantly if at all as this could jeopardise negotiations over other s106 requirements. However, unlike local employment & training, local procurement is cost neutral for their contractors who are simply being asked to add another suitable (local) company to their tender list, not take on someone local at a higher price.

It is important to emphasise the sustainability benefit if more local companies are

used: – the project will generate less road miles; suppliers will in many instances have local warehouses and small factories in the vicinity and the labour force will be commuting in from far shorter distances. The SME survey in this study indicated that local businesses employ approximately one third of their workforce from their local borough.

6.5.6 Covering local procurement costs through s106 fees

Councils will need to fund the costs of facilitating contract opportunities between main contractors and local suppliers/subcontractors. Funds will be needed to cover buyer engagement, business brokerage, research of local SME database, Meet the Buyer events, workshops for SMEs to improve their chances of winning contracts. These can be spread over a number of developments so it is necessary to assess how many s106 agreements the Council will typically process each year in order to gauge the fee levels per development. This is being done successfully in London Borough of Hammersmith & Fulham and an extract from their Local procurement code is shown below:

“A financial contribution will be required toward the costs of facilitating this process i.e. identifying and screening appropriate local enterprises, brokerage with contractors and owners, periodic Meet the Buyer and business briefing events, maintaining a directory of suppliers and performance monitoring. Developers will be asked to cover the costs of facilitating implementation of the local procurement code for each construction site which will vary according to the size of the development.” London Borough of Hammersmith & Fulham - Local Procurement Code (p3)


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6.6 STEP 6: SUPPORTING LOW CARBON BUSINESSES

Existing Low carbon business support programmes in London

6.6.1 The results of our SME survey showed that SMEs would like support in the following key areas:

tendering opportunities grants procurement alerts skills & training programmes

6.6.2 There are a number of existing business support initiatives across London, many of them with funding from the European Regional Development Fund, through which LCEGS companies as well as other companies can obtain support and advice. Some cover specific boroughs and others are pan London. The table below identifies 10 such initiatives and further details on them are contained in Appendix 4 including their terms of reference and contact details.

Where applicable local authorities can work with these projects signposting their own SMEs to them.

Programme lead Title of Programme

Thames Gateway Development Corporation

FLASH and FLASH Plus

Wandsworth Borough Council

Greening SMEs

London Borough of Islington

Green Light North London

British Library Innovating for Growth Centre for Engineering and Manufacturing Excellence (CEME)

CEME Gateway to Investment

London Development Agency

Solutions for Business - Investment Readiness


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London Development Agency

Solutions for Business - Finance Readiness

Greater London Enterprise Ltd

Global London

European Investment Bank

JESSICA

North London Chamber of Commerce

Argall BID - Eco-Efficient

Other Business Support Organisations in London

6.6.3 Enterprise Agencies offer independent advice and support on starting or developing a business. They are very often recipients of funding for their business support activities and can therefore offer it for free or at a subsidized rate. There are 23 enterprise agencies in London that are members of the National Enterprise Network. www.nationalenterprisenetwork.org

There is also a wide range of wholly private sector organisations, including accountants, local Chambers of Commerce and business support advisors, offering a mix of generic and specialist business support services across London. Capital Enterprise is a membership organisation for providers of enterprise support across London, www.capitalenterprise.org

Sources of funding for business support

6.6.4 1 – Grants Databases www.grantsonline.org.uk Grants Online is a subscription service that was established in 2001 and has grown to become one of the UK's most widely recognised and leading information provider on funding opportunities available from the:

European Union UK Statutory sources (UK Government, Scottish Executive, Welsh Assembly,

Northern Ireland Executive and other government agencies)

http://www.nationalenterprisenetwork.org/

http://www.capitalenterprise.org/

http://www.grantsonline.org.uk/


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The Lottery Grant Making Trusts / Foundations

www.j4bgrants.co.uk Information on all the latest European grants, UK Government grants and other sources of funding to help start and grow your business. j4bgrants.co.uk can help you find funding to:

• Promote your business • Improve productivity • Buy equipment • Employ and train staff • Develop innovative products and processes

http://www.j4bgrants.co.uk/


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6.7 STEP 7: MONITORING & EVALUATION

Monitoring and evaluation often form key stages of a broad policy cycle that some departments and agencies formalise in the acronym ROAMEF (Rationale, Objectives, Appraisal, Monitoring, Evaluation and Feedback). This is shown in the diagram below:

Source: HM Treasury Green Book

Effective monitoring and evaluation of Council actions to develop and sustain the low carbon economy is vital to ensure that

strategic objectives to reduce carbon emissions, address fuel poverty or promote the low

carbon economy are being addressed objectives and actions are SMART (Specific, Measurable, Achievable, Realistic and Time-

Bound)


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policy and delivery lessons are identified and inform future activity value for money is being achieved, measured through the economy, efficiency and

effectiveness of delivery for projects with a strong economic focus, the net economic impact (usually measured

through the creation of additional Gross Value Added and employment) can be measured, taking into account deadweight, displacement and other effects.

Developing SMART objectives

The survey of London Boroughs demonstrated that the majority of Councils have carbon reduction, fuel poverty, waste recycling or other targets although they are no longer required to do so following the cessation of Local Area Agreements. Ensuring that appropriate targets are in place is an important part of the process of developing SMART objectives for local carbon reduction and low carbon economy programmes. Council’s may wish to consider preparing a ‘logic model’ to assist the development of appropriate objectives, output and outcome/impact measures for low carbon economy programmes. Logic or theory of change approaches increasingly underpin the evaluation of a range of a wide economic development and other regeneration programmes. They involve the development of an explicit theory of how and why a programme or project might cause or have caused an effect and map the relationship between objectives and desired outputs, outcomes and impacts.

Developing a monitoring and evaluation plan Developing a robust, Council-wide monitoring and evaluation plan is an important step. The key stages include: preparing a clear logic model for the Council’s low carbon economy activities which maps

the relationships between objectives, outputs, outcomes and impacts identifying appropriate targets or indicators that can be used to measure progress against

SMART objectives


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developing data collection methods – these might include a range of quantitative and qualitative measures (for example a regular survey of low carbon businesses and a local procurement monitoring ‘log’ for contractors to complete) and the frequency and mode of collection

agreeing the internal and external resources and capacity required for monitoring and

evaluation activity confirming the format, audience and frequency of reporting (these may be pre-determined

where activities are supported by external funding sources) ensuring that monitoring and evaluation findings inform ongoing delivery and future policy

development considering opportunities for peer review, engaging key stakeholders or other local

authorities sharing and disseminating findings within and beyond the Council.


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APPENDIX 1 CASE STUDIES OF LOCAL ECONOMIC DEVELOPMENT OF LCEGS Case Study 1: RENEW TEES VALLEY Background Renew Tees Valley Ltd (RTV) was set up by Redcar and Cleveland Council as a not for profit arm’s length company to offer independent and expert assistance to companies and individuals to promote the renewable energy and recycling sectors. RTV focused on providing support for project development for both inward investors and indigenous SME and operated across the Tees Valley, encompassing the five local authority areas of Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton. RTV was overseen by a private sector-led Board with membership from local businesses, the North East’s main technology centres of excellence (CPI and NaREC) and the local authority. The company employed four industry specialists comprising a CEO, an energy specialist, a recycling specialist and a business development manager plus administrative support. RTV’s principal activities were: working with companies at all levels and individuals or community organisations to identify and

develop low carbon economy projects through providing or commissioning expert advice and small scale project funding (typically £5k or less)

helping inward investment by raising awareness of opportunities and offering credible expert

opinion raising awareness locally through marketing and events with a focus on encouraging young

people to develop career pathways in the low carbon economy supporting demonstration projects to raise market confidence in new technologies (e.g. large

scale waste wood fuelled power plant, an autoclaving process for waste disposal and reuse)


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advising businesses, schools and community groups on the adoption of renewable energy or recycling technologies

connecting key players to develop supply chain and feedstock opportunities. Projects Examples of RTV’s work included supporting inward investment – including identifying sites and providing financial assistance to

develop Progressive Energy’s major coal gasification project which is an integral part of the North East’s proposals for a £2bn carbon capture and storage network

developing the concept of an Eco Park on land at South Tees, centred on proposals from

Graphite Resources Ltd for a major autoclaving facility for high pressure sterilisation of waste and the potential for further separation of waste through local authority contracts

working with SMEs to develop and test low carbon business projects including IT recycling,

building material re-use, compost/sewage reprocessing, wind turbine opportunities (including Middlesbrough Football Club ), carbon credit trading, novel micro generation, biofuels and an ecological visitor attraction.

developing demonstration projects including the use of hydrogen fuel cells for road signs,

schools and other public buildings raising awareness, including the establishment of an annual Energy and Environmental Business

Ward and developing links between local schools and Groundwork North East projects Funding RTV was established in 2002/3 with a three year funding package from One NorthEast totaling just over £1.3m. The funding was used to establish the company, assemble the team and develop a portfolio of projects. During this period RTV supported the creation of 77 new jobs, 7 new businesses and leveraged £28m of private investment. One NorthEast provided a further three year funding package totaling £2.15m covering the period from 2005/2008. Approximately 50% of the funding was to cover core revenue costs with the remainder devoted to project funding. During this period an independent evaluation demonstrated


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that RTV supported the creation or safeguarding of 272 jobs, 25 new businesses and contributed to securing 11 inward investment projects. From 2008-2010, RTV was subsumed within the activities of the RDA-supported Centre for Process Innovation (CPI now forms a key part of the High Value Manufacturing ‘Catapult’ Centre). ‘Renew @CPI’ delivered projects across the North East and supported over 350 firms, supported by ERDF, although there was no separate grant or loan funding available to SMEs during this period. The project closed in 2010 as a result of RDA funding cuts although a successor organization, RenewPlus, operates as a subscription-based advisory and consultancy organisation. Success factors The key factors in the success of RTV included the creation of a small team of industrial specialists who could offer credible technical input and

gain the confidence of potential investors; arms-length status from the public sector was seen as critical in bulding RTV’s credibility

the ability to provide limited financial support to projects in a simple and speedy manner – RTV

could provide small grants (typically of up to £5k) for development work or to commission research

engaging with large scale projects/inward investors to develop opportunities for smaller spin offs

or supplier chain opportunities targeting educational and marketing activities can be helpful in engaging communities in

understanding potentially controversial projects and give confidence to young people and to local companies that there are careers and market opportunities in the sector

building up knowledge of local capability and the consequent ability to prioritise and rapidly

establish a clear perspective on the potential commercial viability of low carbon projects.


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Case study 2: Sustainability West Midlands Local Authority Low Carbon programme Background The West Midlands Local Authority Low Carbon Economy Programme aimed to help West Midlands authorities use the low carbon agenda to achieve support for climate change reduction, efficiency savings and employment and wealth creation in the private and voluntary sectors. The programme involved a mix of conferences, seminars, best practice exchange and other activities. It was delivered by Sustainability West Midlands - a not-for-profit company working with the private, public and voluntary sectors established in 2002 - on behalf of Improvement and Efficiency West Midlands (IEWM), the Regional Improvement and Efficiency Partnership. It was delivered during 2011/12. Projects The programme had a number of themes under which a range of support was provided: Leadership Summits and Corporate Champions: SWM hosted a series of half-day events for

Leaders, Chief Executives and senior decision-makers on sharing good practice and opportunities for individual and joint actions on themes including new sources of low carbon finance and how to encourage green jobs;

Green jobs: SWM provided support to local authorities and Local Enterprise Partnerships (LEPs)

to identify the opportunities for green jobs within their areas and to support green business clubs to help businesses realise these opportunities, including preparation of checklist for LEPs on developing the low carbon economy and on establishing low carbon business networks

Energy Saving: the Carbon Trust held a series of five implementation workshops and provided

additional one-to-one support to local authorities to plan and implement energy and cost-saving measures in their own buildings and premises; this included delivery of the Trust’s Carbon Management Lite Programme to five West Midlands local authorities, helping them to develop carbon management plans


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Procurement: SWM and consultants produced procurement guidance for local authorities to help incorporate low carbon clauses into contracts and embed carbon reduction, green job creation and long-term costs savings as ‘business as usual’ activity

Planning and finance: consultants were commissioned to deliver workshops and site visits for

planning and development management officers and committee members to help participants understand renewable and energy efficient technologies, strengthen planning policies and incorporate best practice into the development management process

Funding opportunities: The Energy Saving Trust and other consultants held workshops for local

authority financial directors, lawyers and other officers to improve awareness of the cost-saving, income generation and other benefits of installing energy efficiency and renewable energy measures. including a funding guide and searchable online database

Schools: the programme helped the West Midlands to secure a quarter of the Carbon Trust’s

national funding to help Local Education Authorities reduce energy and carbon through low-cost measures. In addition other resources have been secured for local authorities’ work with schools

Community engagement: Marches Energy Agency and partners provided advice, guidance and

support to over 30 community groups wishing to implement renewable energy and energy efficiency projects.

Benchmarking performance and good practice: A tool was developed for assessing how local

authorities are performing in the areas of carbon reduction, climate resilience, and supporting a low carbon economy.

Funding Improvement and Efficiency West Midlands (IEWM) allocated £500,000 from the Climate Change Skills Fund from the Department of Communities and Local Government to deliver support to local authorities through the West Midlands Local Authority Low Carbon Economy Programme. Sustainability West Midlands (SWM) co-ordinated the delivery of the Programme on behalf of IEWM, supported by partners including the Environment Agency, Energy Saving Trust and Carbon Trust.


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Impact Thirty-two of the thirty-three local authorities in the West Midlands were engaged in the Programme through at least one work strand. The Programme provided 47 capacity building events, workshops and site visits. Research into the impact of the programme suggests that local authorities have improved their performance on activities to manage carbon emissions – including providing low carbon planning advice, preparation of carbon management plans and formalising CO2 reduction targets – and in developing the low carbon economy through their own corporate plans and service delivery, and providing support for business growth and skills development. The programme has also identified significant cost savings for local authorities and community groups. The five district and borough councils that participated in the Carbon Management Lite programme set 5-year carbon reduction targets of between 25% and 30%, equating to carbon reductions of over 4,000 tonnes and cost savings of at least £1m over the next five years. For 2012/13, SWM is delivering a follow-on programme which includes: a local authority Low Carbon Leadership Group focusing on sharing good practice and

leveraging additional funding extending support for LEPs by delivering a collaborative work programme supporting planning through events and production of training materials.


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Case study 3:

Islington & Camden Local Procurement Initiative 2005-2011 (iCAM) Background iCAM was a bi-borough local procurement initiative, which originated in 2005, to maximise the procurement opportunities for local enterprises from the Arsenal Development in Islington. It was originally known as ABET (the Arsenal Business Enterprise Team). In the first year it was able to secure 65 tender invitations and £3.5 million of contracts for local companies. On the strength of this, a local procurement code was developed which became part of all planning agreements for developments over 1,000m². In 2007, the Islington team was asked to set up a similar project in Camden to maximise local opportunities from the King’s Cross Central development. This joint project was funded by the London Development Agency and worked on a wide variety of major developments and Council capital contracts such as the St Pancras and King’s Cross Station refurbishments. In June 2009, it was awarded an ERDF grant to continue the project but with a remit to work across all industry sectors and to focus on improving the environmental accreditation of its members. A major part of iCAM²’s remit was capacity building among SME’s to get them ‘Fit to Tender’ and better able to win contract opportunities in their own area. iCAM² was one of the few Council interventions which directly assisted the business growth of local SMEs by funnelling through a pipeline of contract opportunities from the many buyers it was working with. Benefits to the Local Economy and Equalities During the past 6 years, iCAM² obtained 1,042 invitations to tender for local companies from which they were awarded 229 contracts bringing £56 million into the local economy and creating/safeguarding an estimated 820 jobs. An additional benefit of getting local SMEs onto the supply chains of major contractors was that they were often subsequently invited for work on sites outside the area.


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iCAM²’s achievements have been recognised by peer organisations like CompeteFor, Supply London, the Audit Commission, the Supply Cross River Partnership, the LDA and many local authorities as an example of best practise and it is considered a pioneering project. In its last two year period, iCAM was able to support 34 BAME, 13 women and 3 disabled companies on its membership of 200 companies. This represents 20% of the total members. s106 Local Procurement brokerage and monitoring Camden & Islington both have Local procurement requirements written into their Supplementary Planning Documents and all major developments (defined loosely as over 1,000m²) carry s106 local procurement obligations with a target of 10% of project costs. This leverage on developers and their main contractors, combined with a team that goes in and implements it has reaped considerable benefits for their local economies with some £60m of contracts won by local companies over the past 6 years the majority of which they would not otherwise have been considered for.

iCAM Local Procurement Initiative Results Years 1-6

Year 05/06 06/07 07/08 08/09 09/10 10/11

Total

No. of Tender invitations

67 109 160 319 185 202 1,042

No. of Contracts awarded

12 26 54 77 48 63 229

Value of Contracts awarded

£3.0m £6.8m £11.5m £23.7m £6.03m £4.83m £55.8m

Businesses advised 326 150 168 103 110 137 994

Jobs created/protected*

50 113 192 391 15** 58** 819

* Based on a survey of a sample of local companies which had been awarded contracts; **Evidenced to date to ERDF requirements; Source: Camden & Islington Councils 2011


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OJEU Contracts In addition to the Local Procurement Code adopted by both boroughs for s106 planning agreements, iCAM has also built the local procurement code into the major contracts which the Councils’ procure. For example it embedded local procurement into the Building Schools for the Future and Decent Homes programmes in both boroughs as well as Ironmonger Baths refurbishment, the Joint Council Catering contract. A recent analysis of local procurement among Islington’s Decent Homes framework contractors in 2008/09 showed that on average they achieved a local procurement rate of 11.7% of their contract values. As with s106, these contractual commitments could not be either monitored or fulfilled without a local procurement team. Third sector development The role of the third sector in taking on contracts from both the private and public sectors is expected to grow as large private sector groups seek specialist local VCOs to service hard to reach communities and the devolvement of adult social care budgets to the beneficiaries opens up new opportunities for smaller personal care services which were originally dominated by large providers. Local VCOs will need capacity building and contract brokerage services to ensure they can participate in these opportunities. iCAM2 moved into post construction opportunities such as facilities management contracts and subcontracts for major corporates based in the area; it is increasingly assisting Third sector organisations to bid for contracts coming up with Islington or HFI and others. The iCAM² Service to developers and contractors iCAM² provides main contractors with a regularly updated directory of all construction related companies in the two boroughs which have been screened and in most cases visited, and are considered fit to tender. Regular meetings are held with main contractors to identify opportunities in their procurement schedule for local SMEs and monitor the results. iCAM puts on Meet the Buyer events where contractors which are actively procuring can have scheduled meetings with suitable local companies. This enables the buyers to refresh parts of their supply chains and also, where a good match is found, enjoy the benefits of buying locally. Main contractors that iCAM works with regularly include: Balfour Beatty, Carillion, BAM Construction, Kier Group, Kier Wallis, Sir Robert McAlpine, Higgins, Apollo, Lakehouse, Mansell, Mulalley, Galliford Try, Skanska, Laing O’Rourke and Taylor Woodrow among others. It also works with


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University College London, the British Museum and St Mungo’s and other large institutions in Camden seeking to procure more sustainably. Project Rationale The ability of local SMEs to access the supply chains of major contractors working in their area is recognised as a significant market barrier by the European Regional Development Fund and the London Development Agency which is why projects such as iCAM2 (covering Camden and Islington) have been funded together with Supply Cross River (Southwark, Westminster, City of London and Lambeth) and East London Business Partnership (Olympic and Thames Gateway boroughs). Unless the contractor or large buyer is based in the particular borough, they will rely on their existing supply chain as they will be generally unaware of the local capability. Further, many of the SMEs may lack the tendering skills and appropriate accreditation to even qualify for a tender list. A major part of iCAM 2’s remit is therefore capacity building among SME’s to get them ‘Fit to Tender’ and better able to win contract opportunities in their own area. This ensures that a greater proportion of the economic benefits of major regeneration projects and Council procurement are retained within the local economy. Islington Council has specifically highlighted the use of local procurement in its Supplementary Planning Guidance adopted in July 2009 as follows: "Developers are asked to commit to the principles within the Council’s Code of Local Procurement to ensure that the procurement of goods and services through the construction phase allows for opportunities for local businesses to tender for these. This approach is important in addressing deprivation in the borough and increasing local employment as research has shown that local businesses are more likely to employ local labour and, where local subcontractors are appointed, they spend more in the local economy. This also reduces the level of travel involved during the construction process, increasing the overall sustainability of the development."37 Whilst the Council’s business support portfolio includes advice and support as well as direct projects to develop town centres, overall there is little that can be done to support local SMEs financially. Two areas where there is scope for a significant market-based intervention is in the use of LB Islington and Camden’s considerable buying power as a tool to support local businesses, and the inclusion of local procurement clauses in s106 planning agreements using LBCs powers as a Planning Authority. 37 Pg 36, Planning Obligations (Section 106) Supplementary Planning Document Using Planning Obligations to Achieve Sustainable Development, July 2009, LB Islington


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Case Study 4: Case study: Envirolink

Background

In 1999, a group of business leaders in the LCEGS sector established an unincorporated group to lobby the former North West Development Agency about the importance of the sector to the region’s economy. Envirolink was subsequently incorporated as a company limited by guarantee in 2000, with support from the NWDA

The company delivered the Envirolink Northwest programme with support from NWDA. Its objectives were to

increase the level of innovation, knowledge and technology transfer within the sector increase the level of learning and skills for the future sector workforce promote the sector in regional, national and international markets. Focusing on four LCEGS sectors (energy efficiency, renewable energy, waste management and recycling and water/wastewater), the programme provided commercial advice and support for research on commercial/technology development, business planning and support for marketing and funding. It also played a key role in promoting the development of the LCEGS sector. Projects

The Envirolink Northwest programme was focused on five core projects:

the Low Carbon Market Development project, which aimed to increase the market for renewable energy across the region through awareness raising and projects to increase the understanding of renewable energy with businesses and community groups by providing advice and support on the selection and funding of appropriate renewable technologies, advising planning departments on facilitating the deployment of renewable energy and developing networking opportunities; the project received NWDA/ERDF support totaling £2.4m between 2009-2012


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the Low Carbon Sector Development project, which built on an earlier NWDA programme and supported the growth of the LCEGS sector by providing strategic leadership, gathering market intelligence, export and trade development activity, support for networking and collaboration and the provision of technical advice to businesses

the Recycling and Waste project which aimed to support the development of the waste sector supply chain through support for research and development, the commercialisation of new technologies and sector/market development activity to support the identification of high value markets for materials produced through recycling and the treatment of waste

the North West Biomass project, delivered in partnership with The Mersey Forest, which

provided support to de-risk biomass energy projects including support for technical assessments, grid connection specifications and other aspects as well as support to develop the local biomass supply chain; the project supported design works for larger scale biomass boilers and CHP projects receiving funding support of £1.2m from NWDA between 2008-2011

the Northern Wind Innovation Programme, which ran from 2009-2011 and supported supply

chain innovation in the offshore wind sector to address issues including cost, supply chain capacity and workforce skills; the programme was delivered by NAREC and Envirolink Northwest with funding through the Northern Way (the pan-RDA initiative supported by NWDA, One NorthEast and Yorkshire Forward).

Envirolink also delivered the Rural Carbon Challenge Fund with the Energy Saving Trust. The RRCF was a £4m fund, supported by NWDA, which supported rural communities to develop and implement renewable energy projects. The fund offered grants of between £200,000 and £500,000. Projects supported included Saddleworth Community Hydro, the UK’s first community-owned hydro-electricity initiative which involves the installation of a 50KW crossflow turbine at Dove Stone reservoir to the east of Oldham.

Impact

Between 2007 and 2012, the Envirolink Northwest programme

created over 460 new jobs in the region’s LCEGS sector


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safeguarded over 1,350 jobs leveraged over £500 million of public and private investment to support the growth of the

LCEGS sector in the North West. The Envirolink Northwest programme ended on 31 January 2012 as a result of the cessation of NWDA funding. NWDA was one of nine English Regional Development Agencies abolished in March 2012.

Succession

Envirolink now delivers commercial business support on a UK wide basis, providing consultancy, programme management, funding and investor support services. It also generates income through membership subscriptions, charging between £500-£750 per annum.

Some of Envirolink’s other projects include

delivering the INNOWATER support programme for SMEs, a trans-national, EU supported initiative facilitating the commercialisation of innovative water technologies

providing energy advice for farmers across Cumbria through the Cumbria Fells and Dales and Solway Border and Eden LEADER programmes, supported through DEFRA Rural Development Programme for England (RDPE) funding.


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APPENDIX 2 FUNDING STREAMS FOR LOW CARBON CAPITAL WORKS Warm Front The Warm Front scheme provides heating and insulation improvements to households on certain income-related benefits living in properties that are poorly insulated and/or do not have a working central heating system. Qualifying households can get improvements worth up to £3,500 (£6,000 where oil central heating and other alternative technologies are recommended). Grants are available for improvements such as:

• loft insulation • draught proofing • cavity wall insulation • hot water tank insulation • gas, electric, liquid petroleum gas or oil heating • glass-fronted fire - the Warm Front scheme can convert your solid-fuel open fire to a glass-

fronted fire

www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_10018661?CID=MTB&PLA=warmfront&CRE=lowincome Green Deal and Energy Company Obligation (ECO) An innovative financing mechanism, launching this autumn 2012, the Green Deal lets people pay for energy efficiency improvements through savings on their energy bills. Green Deal applies to both the domestic and non-domestic sector. It will replace current policies such as the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). The government has appointed a Green Deal Registration and Oversight Body. Part of their role is to register the Green Deal Advisors, Providers and Installers and also the products and systems that will be installed under the Green Deal. http://www.energysavingtrust.org.uk/england/Take-action/Grants-and-savings/Green-Deal-and-Energy-Company-Obligation-ECO

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_10018661?CID=MTB&PLA=warmfront&CRE=lowincome

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_10018661?CID=MTB&PLA=warmfront&CRE=lowincome

http://www.energysavingtrust.org.uk/england/Take-action/Grants-and-savings/Green-Deal-and-Energy-Company-Obligation-ECO

http://www.energysavingtrust.org.uk/england/Take-action/Grants-and-savings/Green-Deal-and-Energy-Company-Obligation-ECO


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Carbon Trust and Siemens Energy Efficiency Financing

• Financing options for all types of organisation trading for more than 36 months • £1000 upwards for new energy efficient equipment/upgrades • Financing payments calculated to offset against energy cost savings • Carbon saving assessment undertaken by Carbon Trust • Financing provided by Siemens Financial Services

http://finance.siemens.com/financialservices/uk/products_solutions/equipment-finance-leasing/energy-efficiency-financing/Pages/index.aspx http://www.carbontrust.com/client-services/technology/implementation Enhanced Capital Allowances Claim 100% first-year capital allowances on their spending on qualifying plant and machinery. There are three schemes for ECAs: Energy-saving plant and machinery, Low CO2 cars, Water conservation plant and machinery www.eca.gov.uk Feed In Tariff As of April 2010, individuals, local authorities, housing associations and other organisations who install low carbon electricity generating technologies are eligible to receive Feed-in-Tariffs. The introduction of Feed-in Tariffs (FITs) represents a real opportunity for public bodies to create environmental benefit, coupled with a range of economic benefits. In addition to carbon emissions reduction, the installation of renewable energy tecnologies can create local jobs, reduce fuel poverty and contribute to the local economy. Setting up Feed-in tariff schemes can help local authorities and housing associations to maximise income streams, reduce carbon emissions and tackle fuel poverty in both social housing and the private sector. The Feed-in Tariff is made up of two types of payments: Generation tariff - a set rate paid per kWh of electricity generated. The rate is dependent on the type and size of technology installed. Click here for the Table of Tariffs. Export tariff - energy suppliers will also pay 3.1p per kWh that is exported to the electricity grid (i.e. not used onsite).

http://finance.siemens.com/financialservices/uk/products_solutions/equipment-finance-leasing/energy-efficiency-financing/Pages/index.aspx

http://finance.siemens.com/financialservices/uk/products_solutions/equipment-finance-leasing/energy-efficiency-financing/Pages/index.aspx

http://www.carbontrust.com/client-services/technology/implementation

http://www.eca.gov.uk/


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In addition, householders will make savings on their energy bills by using the free electricity generated onsite. http://www.energysavingtrust.org.uk/Professional-resources/Funding-and-finance/Feed-in-tariffs London Energy Efficiency Fund (LEEF) A new £100m loan fund for Energy Efficiency Retrofit projects in public and voluntary sector buildings across London with repayments made out of energy savings. Established under the JESSICA initiative. £50m comes from the London Green Fund and £50m from Royal Bank of Scotland. Funds can be borrowed by Local authorities, ESCO/Contractor or a Joint Venture vehicle. SALIX Energy Efficiency Loans Scheme Salix is an independent social enterprise, which provides the public sector with funding for proven technologies which are cost effective in saving CO2 and will enable any further energy saving technologies to work at their best. Salix projects include insulation, lighting and heating upgrades, IT improvements, swimming pool covers, voltage reduction or better boilers. Through a mixture of loans and grants they have engaged with around 725 public sector bodies and to date have funded 8,400 projects, valued at £178m, which will save the public sector £53m annually and £700m over the projects' lifetime. Salix applicants for these schemes include local authorities, schools, hospitals, higher and further education and central government organisations. http://www.salixfinance.co.uk/loans.html Renewable Heat Incentive This will encourage the installation of renewable heat equipment such as solar thermal technologies, biomass boilers and heat pumps. The scheme is now in Phase 2. From October 2012, RHI tariffs for domestic properties will become available at the same time as the introduction of the Green Deal. The Government has confirmed that renewable heat installations installed in homes since 15 July 2009 will get the Renewable Heat Incentive once it comes in, provided they meet the eligibility criteria. They have also confirmed that this will include those who receive support under the RHPP scheme. However, the Government has not yet published its proposals for how the RHI will work in the domestic sector, so we cannot at this stage provide more information on this. In particular we cannot guarantee that those eligible for an RHPP grant will also be eligible for the RHI.

http://www.energysavingtrust.org.uk/Professional-resources/Funding-and-finance/Feed-in-tariffs

http://www.salixfinance.co.uk/loans.html


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The RHI Premium Payment From August 2011 up to 25,000 installations will be supported by a 'RHI Premium Payment' to help cover the purchase price. Eligibility criteria for the payments will include:

• a fair spread of technologies across all regions of Great Britain. • a well-insulated home based on its Energy Performance Certificate. • a focus on properties off the gas grid, where heating fuels such as heating oil are more

expensive and have a higher carbon content. • agreement from the householder to monitor the performance of installations.

The levels of support for RHI premium payments are Solar thermal £300, Air source heat pumps £850, Biomass boilers £950, Ground source heat pumps £1250. The Energy Saving Trust is administering the Renewable Heat Premium Payment of behalf of the Department for Energy and Climate Change. www.energysavingtrust.org.uk/Professional-resources/Funding-and-finance/Renewable-Heat-Incentive Plug in Car Grant Motorists purchasing a qualifying ultra-low emission car can receive a grant of 25 per cent towards the cost of the vehicle, up to a maximum of £5,000. www.dft.gov.uk/topics/sustainable/olev/plug-in-car-grant Plug-in Van Grant Motorists purchasing a qualifying ultra-low emission van can receive a grant of 20 per cent towards the cost of the vehicle, up to a maximum of £8,000. www.dft.gov.uk/topics/sustainable/olev/plug-in-van-grant Waste Prevention Loan Fund (England) WRAP has announced the re-launch of its Waste Prevention Loan Fund. Loans of between £100,000 and £1 million are available. The aim of the Fund is to increase waste prevention and the capacity for re-use and repair in England. Examples include:

• Changing from product sales to service delivery (e.g. leasing) • Creating customer incentives to return products for re-manufacture • Re-use or recycling.

http://www.energysavingtrust.org.uk/Professional-resources/Funding-and-finance/Renewable-Heat-Incentive

http://www.energysavingtrust.org.uk/Professional-resources/Funding-and-finance/Renewable-Heat-Incentive

http://www.dft.gov.uk/topics/sustainable/olev/plug-in-car-grant

http://www.dft.gov.uk/topics/sustainable/olev/plug-in-van-grant


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In addition to the loan fund, WRAP may be able to help identify new finance partners who are better placed to understand and finance new business opportunities. Priority will be given to waste prevention for textiles, electricals and furniture. However WRAP will consider applications of other materials that also demonstrate significant environmental benefits. The fund is open to businesses, the public as well as third sector. The closing date for applications is the 14th September 2012. www.wrap.org.uk/content/wplf Eco-innovative Programme Opens for Applications (UK) The European Commission has announced that its Eco-innovative programme is open for applications. Through the programme € 34.8 Million of grants are available for green projects. This call is open to all legal persons that are based in eligible countries but the priority will be given to Small- and Medium-sized Enterprises (SMEs). Clusters of applicants and projects which demonstrate a European added value and have a high potential for market replication are strongly encouraged. Calls support Eco-innovative projects in different sectors which aim at the prevention or reduction of environmental impacts or which contribute to the optimal use of resources. In particular the European Commission is looking to support projects in the areas of:

• Materials Recycling • Sustainable Building Products • Food and Drink Sector; Water; and Greening businesses.

Under this call for proposals the European Commission will fund up to 50% of eligible project costs. The closing date for applications is the 6th September 2012. http://ec.europa.eu/environment/eco-innovation/getting-funds/application-packs/index_en.htm Funding Available for Environmental Projects (UK) The European Commission has announced that that the 6th call for proposals under the Life + Programme is now open for applications. The Life + programme is the EU’s main fund for supporting environmental projects. Under this call for proposals, the Commission will be supporting projects under the following headings:

• Nature and biodiversity • Environment policy and governance • Information and communication

A total of €276.71 Million is available for this call and the total available to the UK is in excess of €21 million. Previously supported projects include:

http://www.wrap.org.uk/content/wplf

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• English Nature, which received a grant of €628,065 for a project to demonstrate the restoration of the River Avon Site of Community Interest (SCI) to favourable conservation status, and to integrate the management of the SCI with the adjacent Avon Valley Special Protection Area (SPA). Specific objectives of the project were to restore the watercourse habitat and conditions for associated species in the River Avon SCI and to demonstrate a range of innovative river restoration techniques appropriate to chalk rivers, for local, national and European audiences.

• Scottish Natural Heritage, which received a grant of £2,347,908 to conserve the

abundance and diversity of salmon in Scotland through a significant improvement of freshwater habitats, the development of management guidelines, and the promotion and demonstration of best practice in the removal of key threats through joint effort and partnership.

Project proposals should be sent to the relevant national authority no later than 26th September 2012. Thereafter, national authorities will send project proposals on to the European Commission by the 2nd October 2012. http://ec.europa.eu/environment/life/funding/lifeplus2012/call/index.htm WRAP: The Anaerobic Digestion Loan Fund (ADLF) A £10m fund designed to support the development of new AD capacity in England. The fund aims to support 300,000 tonnes of annual capacity to divert food waste from landfill by 2015. The ADLF offers direct financial support to organisations building new AD capacity in England. The ADLF aims to ensure that food waste is diverted from landfill or from other, less environmentally sustainable operations, up the waste hierarchy. The purpose of the loan fund is to leverage or top up private sector funding (not to replace it) or to materially accelerate the projects. If you have a project to develop AD processing capacity and are finding it difficult to obtain asset finance from the usual commercial sources, WRAP may be able to help. Investment Objectives The fund can provide secured loans for capital expenditure. The typical maximum loan is £1m, requests for loans above this will be considered only at the discretion of the Investment Committee. The maximum term of the loan is five years though WRAP seeks to recycle capital as quickly as possible so early repayment or shorter terms are regarded favourably. http://www.wrap.org.uk/content/ad-loan-fund

http://ec.europa.eu/environment/life/funding/lifeplus2012/call/index.htm

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APPENDIX 3 LIST OF SIC CODES COVERING LOW CARBON and ENVIRONMENTAL GOODS & SERVICES SECTORS 19.2 Manufacture of refined petroleum products

20.11 Manufacture of industrial gases

22.11 Manufacture of rubber tyres and tubes; retreading and rebuilding of rubber tyres

25.30 Manufacture of steam generators, except central heating hot water boilers

25.21 Manufacture of central heating radiators and boilers

26.51/1 Manufacture of electronic instruments and appliances for measuring, testing, and navigation, except industrial process control equipment

26.51/2 Manufacture of electronic industrial process control equipment

27.11 Manufacture of electric motors, generators and transformers

27.12 Manufacture of electricity distribution and control apparatus

27200 Manufacture of batteries and accumulators 27400 Manufacture of electric lighting equipment 27.51 Manufacture of electric domestic appliances 27900 Manufacture of other electrical equipment 28110 Manufacture of engines and turbines, except aircraft, vehicle and cycle

engines 28120 Manufacture of fluid power equipment 28131 Manufacture of pumps 28.25 Manufacture of non-domestic cooling and ventilation equipment

29.1 Manufacture of motor vehicles 30.92 Manufacture of bicycles and invalid carriages 30.99 . Manufacture of other transport equipment n.e.c 33200 Installation of industrial machinery and equipment 35110 Production of electricity 35120 Transmission of electricity


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35130 Distribution of electricity 35140 Trade of electricity 35300 Steam and air conditioning supply 36000 Water collection, treatment and supply 38110 Collection of non-hazardous waste 38120 Collection of hazardous waste 38210 Treatment and disposal of non-hazardous waste 38220 Treatment and disposal of hazardous waste 38310 Dismantling of wrecks 38320 Recovery of sorted materials 39000 Remediation activities and other waste management services

41.1 Development of building projects 41.2 Construction of residential and non-residential buildings 42210 Construction of utility projects for fluids 42220 Construction of utility projects for electricity and telecommunications

42910 Construction of water projects 43130 Test drilling and boring 43210 Electrical installation 43.22 Plumbing, heat and air-conditioning installation 43.29 Other construction installation 43390 Other building completion and finishing 43999 Other specialised construction activities n.e.c. 45190 Sale of other motor vehicles 46.12 Agents involved in the sale of fuels, ores, metals and industrial chemicals 46719 Wholesale of other fuels and related products 46770 Wholesale of waste and scrap 49.5 Transport via pipeline 71111 Architectural activities 71112 Urban planning and landscape architectural activities 71121 Engineering design activities for industrial process and production

71122 Engineering related scientific and technical consulting activities

71129 Other engineering activities 71200 Technical testing and analysis


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72190 Other research and experimental development on natural sciences and engineering

72.11 Research and experimental development on biotechnology

74901 Environmental consulting activities 74909 Other professional, scientific and technical activities n.e.c.

81300 Landscape service activities 95.22 Repair of household appliances and home and garden equipment


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APPENDIX 4 LIST OF LOW CARBON TRADE ASSOCIATIONS AND PROFESSIONAL BODIES ENERGY The Anaerobic Digestion and Biogas Association Established to represent all businesses involved in the anaerobic digestion and biogas industries, to help remove the barriers they face and to support its members to grow their businesses. Its principal aim is to enable and facilitate the development of a mature anaerobic digestion industry in the UK within 10 years. www.adbiogas.co.uk Carbon Capture Association The CCSA promotes the business of capture and geological storage of carbon dioxide (known as Carbon Capture and Storage, or CCS) as a means of abating atmospheric emissions of carbon dioxide and tackling climate change. From its base in London the CCSA brings together specialist companies in manufacturing & processing, power generation, engineering & contracting, oil, gas & minerals as well as a wide range of support services to the energy sector. www.ccsassociation.org The Energy Retail Association Represents the major electricity and gas suppliers in the domestic market in Great Britain. The Energy Retail Association recognises that fuel poverty is a serious and complicated issue. The industry has committed to spending £700 million over the next three years to help tackle fuel poverty and will continue to work with government and other responsible parties on this issue. www.energy-uk.org.uk Ground Source Heat Pump Association Promoting the efficient and sustainable use of ground source heat pumps. www.gshp.org.uk Microgeneration Certification Scheme Not a Trade Association but they do maintain a list of MCS-approved installers. www.microgenerationcertification.org/mcs-consumer/installer-search.php

http://www.adbiogas.co.uk/

http://www.ccsassociation.org/

http://www.energy-retail.org.uk/fuelpoverty.html

http://www.energy-uk.org.uk/

http://www.gshp.org.uk/

http://www.gshp.org.uk/

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The Micropower Council Promoting home-based or small-scale energy generation. www.micropower.co.uk REA Biogas REA Biogas is the trade association for the biogas industry in the UK. www.biogas.org.uk Renewable Energy Association Our membership is active across the whole spectrum of technologies and renewable energy applications electric power, heat, CHP, transport biofuels and biomethane to grid (“green gas”). They comprise generators, project developers, fuel producers and distributors, equipment manufacturers and distributors and service providers. Members range in size from major multi-nationals to sole traders. The Solar Trade Association is affiliated to the REA, and together the two have a combined membership of over 960 members. www.r-e-a.net RenewableUK RenewableUK is the trade and professional body for the UK wind and marine renewables industries. www.bwea.com/index.html Solar Trade Association Membership across the solar power and solar heating industry. www.solar-trade.org.uk WASTE MANAGEMENT British Metals Recycling Association The BMRA is the trade association representing the £5.6 billion UK metal recycling sector BMRA’s 300 members trade and process steel, aluminium, copper and most other ferrous and non ferrous metals, and recycle a wide range of related products, such as end of life vehicles, packaging, batteries, domestic appliances, building materials and electronic goods. www.recyclemetals.org

http://www.micropower.co.uk/

http://www.micropower.co.uk/

http://www.biogas.org.uk/

http://www.r-e-a.net/

http://www.bwea.com/index.html

http://www.solar-trade.org.uk/

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Environmental Services Association The ESA Member companies span the full range of waste management and related environmental services. This includes collection, treatment, disposal, re-use, recycling and recovery of waste. They also supply specialist equipment and provide environmental consultancy services. www.esauk.org Independent Waste Paper Processors Association The IWPPA is the trade association for independent waste paper processors and their equipment suppliers. www.iwppa.co.uk Oil Recycling Association The ORA has served as the UK trade body connecting between mineral oil producers, the users that produce oily waste, legislators, regulators and the collection and processing companies www.oilrecyclingassociation.co.uk Recycling Association Initially established for the paper industry, the RA is now open to other businesses in the waste management and recycling industries. www.therecyclingassociation.com Resource Association he Resource Association is a new professional advocacy body for the reprocessing and recycling industries. www.resourceassociation.com Textile Recycling Association The UK's trade association for used clothing and textile collectors, sorters and reprocessors. www.textile-recycling.org.uk Wood Recycling Association The WRA represent the wood recycling industry and its interests to Government and other regulatory bodies. Members include wood re-processors, panel board mills, renewable energy suppliers, technology manufacturers, consultancies and specialist insurance and health & safety companies. www.woodrecyclers.org

http://www.esauk.org/

http://www.iwppa.co.uk/

http://www.oilrecyclingassociation.co.uk/

http://www.therecyclingassociation.com/

http://www.resourceassociation.com/

http://www.textile-recycling.org.uk/

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PROFESSIONAL BODIES Chartered Institute of Waste Management The leading professional body for waste management with over 5,000 professional members. www.ciwm.co.uk Energy Institute The Energy Institute (EI) is the professional body for the energy industry, delivering good practice and professionalism across the depth and breadth of the sector.The purpose of the EI is to develop and disseminate knowledge, skills and good practice towards a safer, more secure and sustainable energy system. In fulfilling this purpose the EI addresses the depth and breadth of energy and the energy system, from upstream and downstream hydrocarbons and other primary fuels and renewables, to power generation, transmission and distribution to sustainable development, demand side management and energy efficiency. www.energyinst.org Institute of Environmental Management & Assessment IEMA is the largest professional membership body for the environment with over 15,000 members working across all industry sectors. www.iema.net Royal Institute of Chartered Surveyors RICS is the world's leading professional body for qualifications and standards in land, property and construction. www.rics.org Royal Institute of Architects RIBA champions better buildings, communities and the environment through architecture. They provide the standards, training, support and recognition for members and with government, they work to improve the design quality of public buildings, new homes and new communities. www.architecture.com Chartered Institute of Building With over 48,000 members, the Chartered Institute of Building is the international voice of the building professional, representing an unequalled body of knowledge concerning the management of

http://www.ciwm.co.uk/

http://www.energyinst.org/access-expertise?preview=true&draftsection=pages_draft

http://www.energyinst.org/access-expertise?preview=true&draftsection=pages_draft

http://www.energyinst.org/develop-your-career?preview=true&draftsection=pages_draft

http://www.energyinst.org/

http://www.iema.net/

http://www.rics.org/

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the total building process. CIOB members are skilled managers and professionals with a common commitment to achieving and maintaining the highest possible standards. www.ciob.org.uk OTHER Association of Noise Consultants The ANC was established represent the interests of noise consultants in the UK. www.association-of-noise-consultants.co.uk British Water As well as actively promoting best practice, British Water represents the interests of the UK water and wastewater industry on UK and European regulations and legislation, terms and conditions of contract and procurement practice, and in the creation of European and International Standards. www.britishwater.co.uk CONSTRUCTION Federation of Master Builders The FMB is the UK's largest trade association in the building sector with 10,000 members, 1,600 of which are based in London. They have been a delivery partner in the FLASH programme and have run workshops on Green Deal awareness, Feed-in-Tariffs, marketing and other technical low carbon topics. They are planning to introduce Green Deal accreditation for installers. www.fmb.org.uk FENSA FENSA stands for the Fenestration Self-Assessment Scheme. It has been set up by the Glass and Glazing Federation (GGF) and other industry bodies with Government encouragement in response to the current Building Regulations for England and Wales. www.fensa.co.uk Glass and Glazing Federation The GGF represents companies who make, supply or fit, glass and glazing products in the UK and internationally. Being the industry authority, the GGF promotes best practice and sets the highest technical and health & safety standards. The Federation is also the voice of the industry in local and national politics helping shape and influence policy and legislation. As well as offering an array

http://www.ciob.org.uk/

http://www.association-of-noise-consultants.co.uk/

http://www.britishwater.co.uk/

http://www.fmb.org.uk/

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of benefits to its members, the GGF guides and protects homeowners when buying glass or glazing products and services. www.ggf.org.uk National Federation of Builders The NFB represents over 3,000 medium sized contractors and smaller builders throughout England and Wales. www.builders.org.uk National Insulation Association The NIA represents the insulation industry in the UK and members include manufacturers and installers of a number of insulation solutions for home or business. www.nationalinsulationassociation.org.uk

http://www.ggf.org.uk/

http://www.builders.org.uk/

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APPENDIX 5 - LIST OF GREEN AND OTHER BUSINESS SUPPORT PROGRAMMES IN LONDON DFound Priority Name of Lead Organisation

Name of Project

Geographical Coverage

Project Description Project Ends

Project Contact Name

Contact Email

Thames Gateway Institute for Sustainability

FLASH (Facilitation Learning & Sharing)

Pan London

The FLASH (Facilitation, Learning And SHaring) project supports the Thames Gateway Institute for Sustainability in delivering economic development in the London Thames Gateway over the next three years. FLASH will identify and develop new opportunities for SME’s to innovate and collaborate with the knowledge base and large corporate organisations in the field of sustainability; in addition FLASH will share with SME’s innovations and best practices, resulting in a significant and lasting impact on their business and environmental performance.

Autumn 2012

Susan Keeping

[email protected]

Wandsworth Borough Council

Greening SMEs

Wandsworth, Southwark, Kensington &

Greening SMEs will improve the environmental performance of 250 SMEs through a one to one support service for

2014 Nick Smales

[email protected]


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Chelsea, Barking & Dagenham, Richmond and Merton Bidding

businesses delivered by a team of specialist advisers. The project will undertake ‘green’ diagnostics with each business, develop an environmental improvement action plan and support businesses to implement these.

London Borough of Islington Round

Green Light North London Round

Pan London with a focus on Islington, Enfield, Waltham Forest, Haringey, Hackney, Camden, Barnet

The project has will target two hard to reach sectors: shared/serviced tenanted SMEs and light industrial process SMEs. GLNL aims to help North London SMEs reduce their carbon output and improve their resource efficiency, profitability and reputation. Through handholding and tailored business support, GLNL will enable businesses to quantify their environmental impact then implement practical changes to their business practices with the multiple benefits of reducing carbon emissions and saving energy, resources and cash.

2013 Victoria Howse

[email protected]

British Library Innovating for Growth

Pan London

The British Library’s Business & IP Centre’s ‘Innovating for Growth’ project

2014 Isabel Oswell

[email protected]

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will provide high quality business and intellectual property advice and support services to help ambitious SMEs to innovate, to grow and to create new jobs in the knowledge economy in London. Between 2011 and 2014 the project will support 150 growth SMEs from across London with end-to-end relationship management. Services will be provided by the British Library’s expert staff and carefully selected delivery partners in the nationally renowned and highly accessible Business & IP Centre.

Centre for Engineering and Manufacturing Excellence (CEME)

CEME Gateway to Investment

Havering, Barking & Dagenham, Newham, Redbridge, Tower Hamlets, Greenwich, Bexley, Lewisham

The Gateway to Investment project will provide bespoke innovation support and advice to enable technology sector SMEs to access investment finance from a variety of public and private sector sources. It will provide specialist advisors to work with SMEs, deliver a range of investment events and workshops and provide support to enable SMEs to pitch

2013 Michelle Manning

[email protected]


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to sources of investment. Success will be measured in terms of numbers of SMEs supported, jobs created and the number actually receiving investment finance.

London Development Agency (Now managed by European Programmes Management Unit/Greater London Authority)

Solutions for Business - Investment Readiness

Pan London

Providing investment readiness support to London SMEs (over three years), the project will work with the finance market and partners to address barriers faced by SMEs in accessing private sector equity and growth finance. The aim: reduce risk for private sector and improve success rate of companies seeking investment by subsidising preparation of investment proposals and improving knowledge to meet investor requirements. SMEs will progress from an 'introduction to investment' workshop to specialist support and 1-1 coaching as appropriate. High growth, Intellectual Property-rich, and early stage SMEs are targeted. Outreach and tailored support for BAME,

2013 David Hare

[email protected]


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women, and disabled-led companies will be provided.

London Development Agency (Now managed by European Programmes Management Unit/Greater London Authority)

Solutions for Business - Finance Readiness

Pan London The project will provide specialist finance readiness support to London SMEs as part of the BSSP 'Solutions for Business - Understanding Finance for Business' product. It will address barriers faced in accessing debt and other finance.

2013 David Hare

[email protected]

Greater London Enterprise Ltd

Global London

Pan London

The aim of the GLOBAL London project is to promote social and economic cohesion by enhancing high-level sustainable growth, competitiveness and productivity of new and established businesses in London, strengthening existing entrepreneurs and creating more and better jobs through international trade opportunities.

2013 Juergen Bauer

[email protected]


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European Investment Bank

JESSICA Pan London

The aim of the JESSICA scheme is to establish a £100m investment vehicle - JESSICA Holding Funding - that will provide repayable investments for environmentally sustainable infrastructure. The JESSICA Holding fund, which is managed by the EIB, will make contributions to two smaller funds, called urban development funds (UDFs), one focusing on decentralised energy systems/district heating and the other on waste infrastructure. The UDFs will, in turn, provide funding for infrastructure projects in the form equity, loan or guarantee.

2015 Frank Lee [email protected]

North London Chamber of Commerce

Argall BID - Eco-Efficient

London Borough of Waltham Forest

This business led project will improve and enhance the industrial Environment, attract inward investment and create sustainable economic growth. The project will carry out a free energy survey of businesses within the Argall Business Improvement District (BID) in Waltham Forest. The

2012 Janine Higgins

[email protected]


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project will encourage recycling and energy efficiency. It will also identify other innovation and environmental opportunities and signpost the businesses to specialist providers. Direct benefits will be helping make local SMEs in sectors vital to London more efficient through innovation, and more eco-efficient through increased environmental awareness and action.


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APPENDIX 6 - List of Useful Contacts BREEAM Code for Sustainable Homes Tel: 01923 664462 www.breeam.org Carbon Trust The Carbon Trust helps businesses, governments and the public sector to accelerate the move to a low carbon economy through carbon reduction, energy-saving strategies and commercialising low carbon technologies. Tel: 020 170 7000 www.carbontrust.co.uk Construction Industry Research and Information Association A member-based organization that deliver a programme of business improvement services and research activities for members and those engaged with the delivery and operation of the built environment. www.ciria.org.uk Energy Saving Trust Offer a range of support services and tools for local authorities and housing associations to help drive forward sustainable energy initiatives. We are expertly placed to offer independent advice on how to tackle climate change in the domestic sector and in your communities. Tel: 0300 123 1234 [email protected] www.energysavingtrust.org.uk Environment Agency Public Body responsible to the Secretary of State for Environment, Food and Rural Affairs for the enforcement of environmental affairs in England and Wales. Principal aims are to protect and improve the environment, and to promote sustainable development. www.environment-agency.gov.uk

http://www.breeam.org/

http://www.carbontrust.co.uk/

http://www.ciria.org.uk/

mailto:[email protected]

http://www.energysavingtrust.org.uk/

http://www.environment-agency.gov.uk/


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Green Book Live Free online database designed to help specifiers and end users identify products and services that can help to reduce their impact on the environment. www.greenbooklive.com Green Chain Online directory of businesses supplying ‘green’ technologies and services in the South East. Whether you are a company director or an employee, the listed businesses are able to help you save money on your bills whilst reducing the environmental impact of your buildings, vehicles and outdoor spaces. Heat pumps, insulation, solar panels, biomass, rain water harvesting, voltage optimisation, green advice, low energy lighting and more… Technologies are supported with Buyers’ Guides which clearly explain each technology and what you need to know so you can feel confident about what could work best for you. www.greenchain.org.uk Green Procurement Code The combined purchasing power of London based companies has huge potential to positively tackle the capital's waste problem, reduce carbon emissions and contribute to the Mayor of London’s target of cutting the capital’s carbon emissions by 60% by 2025. London's businesses, as major consumers of products and producers of waste, can sign up to the Mayor of London’s Green Procurement Code to commit to reducing the effects of their activities on the environment. Note: This is a chargeable service - London Boroughs and the GLA group: £1,675 Other large organisations: £1,890, SMEs: £475 Tel: 020 7324 6360 www.greenprocurementcode.co.uk Institute for Sustainability The IfS was started up some 4 years ago to significantly accelerate the delivery of economically, environmentally and socially sustainable cities and communities. They do this by driving innovative demonstration projects and developing programmes to actively capture and share learning and best practice. The IfS currently runs over 20 different programmes including the FLASH business support programme for London low carbon SMEs, the RE:START project helping SMEs to access local renewable wind, waste and solar projects across the South East (not London). www.instituteforsustainability.co.uk

http://www.greenbooklive.com/

http://www.greenchain.org.uk/

http://www.greenprocurementcode.co.uk/

http://www.instituteforsustainability.co.uk/


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Letsrecycle News and information service for the recycling and waste management industry. www.letsrecycle.com London Community Resource Network London Community Resource Network (LCRN) is a social enterprise charity supporting organisations and communities working to manage resources sustainably, especially through waste prevention, reuse and recycling. We have a strong track record of local, regional and national delivery influencing policy, building capacity, delivering sound business support, advising local authorities, housing associations, SMEs and the public. We connect community groups, charities and businesses all working towards responsible resource management and provide them with best practice, training, environmental audits, publicity and other services Tel: 020 7324 4690 www.lcrn.org.uk London Waste and Recycling Board LWARB brings together all of London's waste stakeholders to transform the management of waste in the capital. Tel: 020 7960 3680 www.lwarb.gov.uk National Building Specification NBS specification products cover building construction, engineering services and landscape design. The specification and information solutions are designed for construction industry professionals. NBS are part of RIBA Enterprises Ltd, which is wholly owned by the Royal Institute of British Architects. www.thenbs.com National Energy Foundation NEF empowers individuals and organisations to take action to reduce their carbon emissions through energy efficiency and use of sustainable energy sources to counter climate change. Tel: 01908 665555 www.nef.org.uk

http://www.letsrecycle.com/

http://www.lcrn.org.uk/

http://www.lwarb.gov.uk/

http://www.ribaenterprises.com/

http://www.thenbs.com/


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Ofgem - Sustainability In 2004, the Energy Act added a duty for Ofgem to contribute to sustainable development. Ofgem has an important role to play shaping the future of gas and electricity industries which play a major part in the economic, social and environmental fabric of the UK. www.ofgem.gov.uk/Sustainability/Pages/Sustain.aspx WRAP WRAP’s work helps people recycle more and waste less, both at home and at work, and offers economic as well as environmental benefits. They work with a wide range of partners, from major UK businesses, trade bodies and local authorities through to individuals looking for practical advice. WRAP are funded by all four governments across the UK. Tel: 0808 100 2040 www.wrap.org.uk

http://www.ofgem.gov.uk/Sustainability/Pages/Sustain.aspx

http://www.wrap.org.uk/