Procuring local net zero investment: A UK case study

TL;DR

This paper explores how UK local authorities are using public procurement to secure long-term net zero investments, using Bristol City Leap as a case study.

Contribution

The study provides insights into the risks and opportunities of using public-private partnerships for decarbonization under constrained resources.

Findings

Public procurement can significantly increase net zero investment but involves higher risk and transaction costs.

Successful delivery requires strong procurement capabilities and institutional oversight.

Independent measurement and verification are crucial for equitable outcomes.

Abstract

Following over a decade and a half of austerity measures, and with costs of delivering statutory duties soaring, UK local authorities’ resources and capabilities to deliver net zero are diminishing. Decarbonisation funding provided by central government, meanwhile, is awarded competitively. To secure long-term, place-based net zero investments under these unfavourable circumstances, UK local authorities are increasingly turning to public procurement. A prominent example is Bristol City Leap, a Joint Venture Company procured by Bristol City Council between 2018 and 2022 to deliver around £1bn of investment in energy infrastructure and service delivery over 20 years through a concession agreement. Drawing on workshops and interviews with key stakeholders and experts, this paper examines the risks and opportunities of procurement and early-stage delivery of this public–private-partnership model. Using insights from transaction cost economics, it finds that this agreement has significantly increased net zero investment in return for increased risk and transaction costs. To ensure successful, just, and equitable delivery of promised place-based net zero investments, significant procurement capabilities, careful due diligence procedures, continuing institutional oversight, and independent measurement and verification are required.