UKIB to partner with local authority projects

First pilots announced for new local authority advisory function

UK Infrastructure Bank to partner with local authority projects at the forefront of climate change and regional growth agenda as it starts up its advisory function.

29 September 2022

Following extensive engagement with a wide range of local authorities and industry stakeholders, the UK Infrastructure Bank will partner with Bristol, Greater Manchester, and West Yorkshire on three pilot projects as it builds a new advisory function for local authorities around the UK.

The pilots will focus on three key areas at the heart of the net zero and local growth challenge: the electrification of buses, mass transit and place-based, low-carbon energy infrastructure. The projects have been chosen as they are targeting challenges faced by many local authorities today and showcase innovative approaches to public and private strategic partnerships and financial models. They will provide important learnings for the UK Infrastructure Bank to share with other local authorities.

The local authority function is a core part of the Bank’s mandate set by the UK Government. It will scale up over the next few months, during which the Bank will continue to engage with local authorities and partners to consider where it can make the most impact. Once fully operational, the advisory function will provide commercial expertise to local authorities, supporting them to find innovative ways to meet net-zero targets through financing infrastructure. It will also provide a central resource for local authorities in all parts of the UK to share this knowledge and learn from past projects.

The function will complement other sources of advice available by offering targeted support that helps local authorities to get the best value from working with the private sector. For instance, the function may advise authorities on the best financing structures to deliver the infrastructure needs of their areas. The Bank’s LA lending team will also continue to engage actively on future lending opportunities and welcomes enquiries from local authorities seeking finance for qualifying projects under its preferential lending rates.

The pilot projects:

  • The Bank will work with Bristol City Council as they begin the delivery of their innovative City Leap partnership that will build £1bn of net zero infrastructure, including strategic heat networks, over the next 20 years. 
  • It will also work with Transport for Greater Manchester, the first transport authority outside London to take on bus franchising powers, as they look to accelerate their ambitious plans for the transition of a third of the city region’s overall bus fleet to a zero-emission fleet by 2027. 
  • The Bank will work with the West Yorkshire Combined Authority as they develop their plans for a new, transformational Mass Transit programme for the region. 

On the appointment, John Flint, CEO of the UK Infrastructure Bank, said

"The Bank was set up to tackle climate change and boost growth across the UK and local authorities are at the frontline of both these goals. We want to use our unique experience and position to help authorities build capabilities, financial expertise and reach their ambitions.

"I am grateful to the teams at Bristol, Greater Manchester and West Yorkshire for collaborating with us as we learn from the pilots and discover where the UK Infrastructure Bank can make the biggest difference. We will be working hard to get the best outcomes for these innovative and important projects."

Mayor of Bristol, Marvin Rees, said:

"This initiative is a positive step forward to ensure the right models of finance are put in place. It will unlock investment in the critical infrastructure cities need to meet the challenges we face.

Our City Leap Energy Partnership is a billion-pound programme which will power us forward to meeting our ambition of being a net-zero city by 2030. This 20-year collaboration will see us work closely with our partners in the private sector to develop clean, sustainable heat and power systems for the city and grow the green economy, creating jobs and opportunities across Bristol."

"We’re delighted to welcome the UK Infrastructure Bank’s support in capturing the success and learning opportunities to ensure that Bristol’s City Leap model is one that is replicable for other cities and regions, sharing our learning to enable city-scale decarbonisation elsewhere."

Mayor of Greater Manchester, Andy Burnham, said:

"The UK Investment Bank is an important new financial institution that will play a key role in supporting both the public and private sector in financing infrastructure projects that drive local economic growth and decarbonisation.

"Through the Bee Network we will deliver the greatest transformation of a city region’s transport network anywhere in the country, and the fact Greater Manchester is one of three areas chosen to pilot the project is a testament to that.

"The Bank has been helping Transport for Greater Manchester (TfGM) to assess the strategic options to fund, finance and procure Greater Manchester’s Zero Emission Bus (ZEB) fleet, bringing unique market insight and perspective that can most efficiently and effectively support our overall ambition for a sustainable public transport system and for the city-region to become carbon neutral by 2038."

Mayor of West Yorkshire, Tracy Brabin, said:

"We’re pleased to work with the Leeds-based UK Infrastructure Bank on their plans for this new advisory function.

"It will enable us to bolster our expertise when working on projects, such as the West Yorkshire mass transit network, so that we can deliver them as effectively as possible for the people in our region."

As the advisory function is further developed, local authorities are encouraged to reach out to the Bank on project opportunities and where the Bank may be needed to complement existing advisory services. Further details of how the advisory function will operate in the next phase beyond these first pilots, and how local authorities can access support, will be released following the conclusion of the pilot phase.

Notes to Editors

Further Information about the pilot schemes

Heat Networks – Bristol City Council – the advisory pilot will be supporting Bristol City Council in the preparations and initial operations for the Council’s client function to Bristol’s City Leap Energy Partnership, a 20-year partnership between the Council and a private sector partner for delivering green energy investment. The partnership aims to stimulate £1bn of private sector investment, including in expanding the city’s heat network.

Zero Emission Buses - Transport for Greater Manchester - the advisory pilot will support preparations for the development of TFGM’s delivery plan for transitioning a third of the overall bus fleet to ZEBs by 2027, and on the purchase of 50 new zero-emission buses for Bolton and Wigan. More than £200m has been prioritised by TfGM for zero-emission buses and associated infrastructure from their City Region Transport Settlement.

Mass Transit – West Yorkshire Combined Authority – the advisory pilot will provide commercial insights and challenge to a number of key areas as the Combined Authority develops the first business cases of the 2040 Mass Transit vision. West Yorkshire are investing £200m on development and initial delivery of what is expected to be an overall project worth more than £2bn.

Further information about the UK Infrastructure Bank

The UK Infrastructure Bank was announced as part of the Government’s National Infrastructure Strategy in 2020 and launched in June 2021. Its objectives are to help tackle climate change and to support regional and local economic growth. A core part of the Bank’s role is to lend to local and mayoral authorities for strategic and high value projects, as well as provide an advisory function as set out above.

The Bank’s local authority lending function is open for proposals. Through the function, the Bank works with local authorities across the country to provide flexible loans to support regional infrastructure development at a preferential rate. In October 2021 the Bank announced its first loan to the Tees Valley Combined Authority of £107m to transform part of the former Redcar Steelworks site along the River Tees, creating a 450-metre quay to service the offshore wind sector, providing opportunities for manufacturing, storage and mobilisation of wind technology.

In March 2022 the Bank confirmed it will partner with the West Midlands Combined Authority (WMCA) to invest £10 million in phase 1 of the new Sprint Bus Route in Birmingham along the heavily congested A45 corridor, increasing connectivity between residential and employment areas. The aim is to speed up journey times and reduce carbon emissions, supporting the WMCA to create a zero-emissions corridor by 2030.

The Bank also partners with the private sector to invest in infrastructure projects that meet its investment principles. You can read further detail on our lending offer and more detail about the Bank and its investment strategy is available in our Strategic Plan.