Is Andy Burnham missing huge opportunity to invest in an energy supply company?

Today Carbon Coop and the Centre for Local Economic Strategies (CLES) are revealing new research showing that in 2018 Greater Manchester’s public sector institutions spent over £75 million on their combined gas and electricity bills.

This is over five times the amount Manchester Council has set aside to tackle homelessness in the city, one of the council’s policy priorities. The University of Manchester alone spent over £15 million of this total.

The release of this research coincides with Greater Manchester Mayor Andy Burnham’s scheduled announcement of a new environmental strategy for the region, which is expected to include the formation of a GM Energy Company. We believe that this research demonstrates a huge opportunity for Greater Manchester to redirect its energy spend back into the local economy via the newly established, publicly owned municipal company.

The Mayor’s plans – due to be unveiled at today’s Mayor’s Green Summit – to increase energy infrastructure in GM through installing renewable generation are a step in the right direction, but fall short of the ambition and scale required to meet the challenge of climate change and increasing energy demands of the city. We believe that pursuing opportunities in local energy supply would not only boost the local economy, but would provide local revenue to support the GM energy strategy. This circular economy approach is a win-win and with 12 years to go to reduce GM carbon emissions to net zero, plans must step up in ambition and scale.

CLES have been working with a number of authorities across Greater Manchester and beyond on a Community Wealth Building approach, which sees the purchasing power, land and assets, and employment practices of anchor institutions harnessed to create plural ownership of the economy and make financial power work for local places. In Manchester, this has created over 5,000 new jobs, and in Preston over £70 million has been redirected into the economy.

Grace Brown, Researcher from CLES said:

‘The new findings from CLES and the Carbon Coop along with the announcement of the GM Energy Company demonstrate a real opportunity for Community Wealth Building in the city region. Retaining the £75 million worth of anchor institutions’ energy spend locally, through a new publicly owned municipal enterprise, has the potential to transform the Greater Manchester economy and create lasting social, economic and environmental benefits.’

A vision for a GM Energy Company was launched at last year’s Green Summit off the back of a collaborative research project, headed up by Carbon Coop, which shows the potential of the company. Energy Futures presents a vision for a future Greater Manchester municipal energy company imagined over the next 5, 10 and 20 years. The vision shows how the company could act as vehicle through which energy partnerships and infrastructure projects could be initiated that would radically change the city region’s energy system. There would be a municipally owned electric vehicle charging scheme, renewable generation installations in partnership with community energy groups, a single, fair energy tariff available to all customers and a ‘comfy homes’ energy scheme investing in improving leaky, cold houses. In turn each of these opportunities would generate new jobs and lock finance returns into the local economy.

It is precisely this kind of thinking that Greater Manchester needs to be engaging with, if it is to reach the targets outlined in the Environment Strategy, also released at today’s event. The current course of action suggested in the strategy will only reduce Greater Manchester’s net carbon emissions by half of what is needed to make a fair contribution to global emissions reductions. Given the potential security that utilising the local public purse could have in supporting carbon reduction efforts, we urge the Mayor to look again at the strategy, engage public institutions in this process and make this Environmental Strategy a real community wide force for change.