Caroline Davis
By Caroline Davis, Head of Public Sector Leasing at Triple Point
We know the green transition must involve local authorities if the UK is to meet its net zero commitments. That 78% of local authorities in England declared a climate emergency, and many local authorities have already made their own commitments on reaching net zero is reflective of the urgency and desire to push for a greener future at the local level to improve living standards, support jobs, and attract investment.
The challenge is that soaring inflation and a shortfall of £3.4 billion estimated for council budgets in 2023-4 means that local authorities are under unprecedented pressure. Money is often not available to fulfil essential council services whilst meeting commitments to transition infrastructure and services away from fossil fuels. The solution: not letting local government face this task alone.
At such a time, non-bank lenders have a vital role to play in furnishing authorities with much-needed financing. Leasing can help authorities conserve cash, and spread the cost of the assets they need, while fulfilling their essential services for communities. This can come in the guise of leasing commercial vehicles, medical equipment, modular buildings, and IT equipment to public sector organisations such as NHS trusts, as well as councils, leisure centres, ambulance trusts, and schools across the country.
Fewer funds for green assets
Take Electric Vehicles (EVs), considered the key technology to decarbonising road transport – the highest emitting sector of the UK economy today. Decarbonising the sector requires all types of vehicles to go electric, from cars and vans, through to specialist commercial vehicles such as tippers and refuse collection vehicles (RCVs). It also requires the capacity of regional bodies such as local councils to deliver on this goal.
A survey taken at the beginning of 2022 showed that, although 81% of councils have an electric vehicle strategy in place, 84% of vehicles operated by councils are still diesel-fuelled. This is clearly a problem, but it’s also unsurprising. For example, diesel RCVs boast among the worst fuel economy of all major vehicle categories. They are also significantly cheaper than their electric powered counterparts.
Leasing EVs such as electric commercial vehicles (including specialist vehicles) therefore represents a solution. Budgetary constraints can prevent local authorities from acquiring EVs outright given the high initial costs. But by spreading the cost of acquisition over several years, the transition to greener roads can become a reality.
Flexible and Tailored Leasing as a solution for councils
At Triple Point, we take a flexible approach to meet the needs of each customer we work with. Understanding that environmental technology such as EVs are in a state of constant evolution, we react quickly to these changes and offer tailored solutions and flexible leasing terms which ensure that public sector operations face minimal disruption and are in-step with the latest technological developments.
Our Public Sector Asset Finance team has financed large numbers of vehicles and assets to local bodies with a combined worth of £439m since 2007. From funding PPE making machines for NHS trusts, to providing modular buildings and equipment to schools, Triple Point’s diverse portfolio and expertise in the public sector continues to support local authorities with the financial tools needed to benefit from updated assets and technology.
Financing vehicles for local authorities already plays a significant role in Triple Point’s portfolio and supplying councils with EVs for the green transition is set to be a growing area of importance for Triple Point as the transition away from fossil fuels gathers momentum. It is clear that the path to a successful green transition in the UK will have to involve local government, and in the coming years, it will be paramount that councils have the support and expertise of non-bank lenders to ensure that the UK fulfils its ambitions to become a global leader in combating climate change.
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