Budgeting for a Green Recovery

In the most challenging of times, tackling COVID-19, poverty and the climate emergency calls for a bold city budget for a Green Recovery, says Gavin Corbett

What a year it has been. The council last set a budget on 20 February 2020. Back then, during several hours of debate, there was not a single mention of Coronavirus or COVID-19. How that changed, within a matter of weeks, to become the only topic of conversation. A year later it is the dominant backdrop for budget 2021, which is set this week (18 February).

There is no getting away from the immediate impact of COVID-19. It’s blown an £80m hole in the council budget this current year. Although around half of that has been made up by funding from central government, it has been an almighty effort to get the budget this year to come in balanced. And, of course, COVID-19 is far from over. In 2021-22, and well beyond, there will continue to be, on top of the human costs, massive financial consequences, not least on arms-length operations like Lothian Buses and Edinburgh Leisure.

It might be hard to believe right now, but the pandemic will pass. It will leave a legacy that Edinburgh needs to reflect on: how care is provided to our oldest people, for example, or how the most disadvantaged children prosper at school. We have seen how much of an asset our local parks and greenspaces are for exercise and wellbeing and we have seen how communities have supported each other over the last year. So when Green councillors have been developing our budget proposals for next year, we have been determined to build on that legacy.

However, in other ways, familiar challenges remain. Before COVID-19 had even been heard of the climate emergency was, and remains, the biggest threat facing the world today. It is why Edinburgh has set an ambitious target to reduce carbon emissions to zero by 2030.

That hasn’t changed. The clock is ticking and, if anything, the urgency of action has become more obvious over the last year. So the task is to make sure the path out of the pandemic is also a route towards a world that can live within its natural means. That led to Green councillors publishing Green Recovery proposals back in the summer, followed by Edinburgh Climate Commission, at greater length a few weeks later. But, as the Climate Commission said, the litmus test of commitment does not lie in targets and ideas, worthy though they may be. It lies in deliverable action plans and budgets.

That is why the Green Budget proposal for 2021-22 is a Green Recovery Budget. That means extra investment of £10m in:

  • Delivering on the city’s emerging sustainability plan, which will be published later in 2021.
  • Transforming the council’s own vehicle use away from fossil fuels
  • Big investment in parks, greenspaces and wildlife in the city, recognising what a lifeline they have been in the last year, for exercise and wellbeing; coupled with support for greater outdoor learning
  • Energy transition in public buildings
  • Building on the last year of additional space for walking, wheeling and cycling.

£10m is a drop in the ocean. The price tag for achieving a zero carbon capital is measured in billions, not millions. The council, like all public bodies, needs to dramatically up its game on delivery. There are big returns in reduced costs but that means marshalling some of the big funding opportunities like City Region Deal, the 2030 City Plan and Lothian Pension Fund as well as new financial instruments.

If Edinburgh gets it right, a zero carbon city is a fairer city, tackling food and fuel poverty, shifting the balance away from private cars to public transport, and improving the rich heritage of green and open space that is free for all to use.

However, in 2020 Edinburgh’s Poverty Commission rightly identified the immediate needs of people left furthest behind. The gulf between rich and poor has yawned ever wider during the pandemic. So our budget allocates £2m next year to take forward some of the actions highlighted by the Poverty Delivery Plan: investing more in preventing homelessness, protecting services which seek to maximise income of the least-well-off; enhanced crisis support; and supporting access to work and training as Edinburgh’s economy re-emerges in its new form. That’s on top of new funding for digital access in schools, tackling food poverty and supporting young people who are looked after. And we also propose a rent freeze next year for council house tenants, recognising that council rents are already 30% above the Scottish average.

How do we pay for all of this? In part, we think we can use money better: reducing costs or raising more in areas like energy, paper and prints costs, civic hospitality and private car parking. A tiny example of that is our choice to reject a £30,000 increase in the Lord Provost’s civic hospitality budget and instead use that to support the new End Poverty Edinburgh Citizen Group.

However, we have also broken ranks with other parties on the council and said that a planned rise in council tax should go ahead. Only days before the council budget went to Finance Committee for sign-off, the Scottish Government, with one eye on a Holyrood election in 10 weeks, decided to withhold £9.6m worth of funding unless the council opted to freeze council tax. Since agreeing to that would reduce money for services by £14.8m we believe that the council should reject that proposal and allocate the difference – ie £5.2m – to the Green Recovery priorities highlighted above.

However, we also firmly believe that the Scottish Government should stop playing election politics with council funding and should hand that £9.6m over to Edinburgh for much needed services and we challenge ministers to do just that. It is Edinburgh’s money and the Scottish Government has no right to withhold it.

That is only the start. Over the next three years the council will use flexibility over loan principal repayments to allocate £34m to the task of COVID-recovery. An equivalent sum could be freed up by re-calibrating payments on private finance (PPP) contracts. However, the powers to do so are currently stuck in a battle between central and local government.

That won’t do at all. The funding is needed now, to learn from the pandemic, to tackle poverty, and to support a Green Recovery which points the way to a sustainable future for Edinburgh.

Cllr Gavin Corbett is Finance Spokesperson for Edinburgh’s Green Councillors.