Councils calls for £7bn government war-chest for green projects

The government should create a "single pot of money" for green housing schemes across the UK to help fast-track improvements to existing housing stock and slash red-tape around low carbon developments, according to the Local Government Association (LGA).

In a report released yesterday to coincide the publication of the government's Climate Change white paper, the LGA said that rather than the myriad different green housing schemes that currently exist, there should be a central source of funding for green projects to increase the speed they can be rolled out.

The report recommends there should be "a single Community Energy Action Fund of £7bn into which councils and local partners, including Energy Saving Trust Advice Centres, can bid to undertake systematic area-based programmes to cut household fuel bills by £300 per household each year and carbon footprints by 20 per cent".

Commenting on the plan, Paul Bettison, chairman of the Local Government Association Environment Board, said: "It's time the government cut the red tape around its green schemes and created a single pot of money so councils can get on with the job in hand."

Other measures included in the report, entitled From Kyoto to Kettering, Copenhagen to Croydon - local government’s manifesto for building low-carbon communities, include a proposal to compensate residents in areas where new wind turbines are built. Residents in these areas would receive discounts to their energy bills to make up for any inconvenience caused by having the facilities located in their area.

"Renewable energy generation in their area will provide significant financial benefits for the generator but none for the local community, often leading to local opposition for developments such as wind farms," the report states. "A community tariff should be established for local residents to benefit from local wind energy generation."

But while the LGA might have a clear idea of how government could offset some of the inconvenience associated with wind turbines, a wider row is brewing on how the construction of wind facilities and other renewable energy projects will be managed in the run-up to the next election.

The government has created a controversial quango known as the Infrastructure Planning Commission (IPC) which will manage and approve many green energy and other major construction projects – including nuclear plants and airport runway extensions.

However, the Conservatives remain opposed to most quangos and have committed to dissolve the IPC if they come to power. "We are going to dismantle, brick by brick, the city of quangos that have grown up over 11 years of Labour," said Conservative party chairman Eric Pickles in a speech last year.

He suggested that the IPC would be one of the agencies to face the axe, adding that it would take power away from the people and put it in the hands of unelected officials.

"The new Infrastructure Planning Commission, which will take complete control of planning permissions for large developments like airports, power stations, motorways, sewage plants and hazardous landfill sites: the types of development which rightly concern local people so much," he said.

But in an interview with the Guardian this week, the chairman of the IPC, Sir Michael Pitt, appeared to be non-plussed by the Conservatives' threat.

"I am well aware of what members of the Conservative party are saying," he told the newspaper. "My priority is implementing the 2008 Act and ensuring that the IPC is up and running in accordance with a demanding timetable, and that we can get as much good work under our belts as possible to demonstrate the value of having a commission."

Energy and Climate Change Secretary also hit out at the Conservative's proposals yesterday, arguing they represented a "retrograde step" that would delay the roll out of renewable energy projects.