New measures will require businesses to commit to net zero by 2050 and publish clear and credible carbon reduction plans before they can bid for major government contracts.

The rules will support the government’s plan to build back greener by ensuring that potential government suppliers publish plans to reduce carbon emissions across their operations in order to bid for major government contracts.

The measures announced on World Environment Day, make the UK government the first in the world to put this requirement in place, underlining the UK’s global leadership in tackling climate change.

Under the new measures, by September, prospective suppliers bidding for contracts above £5million a year will need to have committed to the government’s target of net zero by 2050 and have published a carbon reduction plan. Firms which fail to do so will be excluded from bidding for the contract.

Minister for Efficiency and Transformation, Lord Agnew, said:

The government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to net-zero.

Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world leading approach.

These measures will help green our economy, while not overly burdening businesses, particularly SMEs.

A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place. Some large companies already self-report parts of their carbon emissions, known as Scope 1 (direct) and Scope 2 (indirect owned) emissions.

The new rules will go further, requiring the reporting of some Scope 3 emissions, including business travel, employee commuting, transportation, distribution and waste. Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint.

The new rules drive forward the government’s green agenda, while also striking a balance to not overly burden and potentially exclude small and medium sized enterprises (SMEs) from bidding for government work.

Tom Thackray, Director of Infrastructure and Energy, at the CBI said:

As the world looks towards the UK and COP26 for leadership on decarbonisation, business is already playing a vital role in driving progress towards a greener future.

The CBI has long supported using procurement policy to ensure government spending supports the UK’s environmental objectives and these changes will encourage more firms across the country to demonstrate their own commitment to net zero when bidding for government contracts.

Partnership between the public and private sectors can make the UK a global role-model, not only in delivering vital public services but working together to tackle climate change.

A spokesperson from the Business Services Association added:

Achieving Net Zero means everyone – government, businesses, the VCSE sector and the public as a whole – working together as one.

Harnessing the power of public procurement is one important tool at the government’s disposal. That’s why the BSA welcomes this move. We and our members contributed to the process of drawing it up. It is another important step on the road to Net Zero.

The approach is similar to the successful prompt payment measure introduced in 2019, which allowed a supplier’s performance in paying their subcontractors promptly to be taken into account when bidding for government work. As a result of this measure, we have seen improvements in payment performance across the UK economy.

All companies bidding for major government contracts will need to comply with the measure, not just those who are successful in winning contracts. This further widens the impact of the measure, as more and more suppliers commit to achieving Net Zero.

The measures will apply to all central government departments and arms length bodies.

The government and Mayor of London have agreed a third extraordinary Transport for London (TfL) funding deal of £1.08 billion for the period up until 11 December 2021. The deal will replace the agreement signed in October 2020, which, following extensions agreed in March 2021 and in May 2021, expired on 28 May 2021.

The funding settlement is further proof of our commitment to supporting the capital and the transport network on which it depends, while ensuring that our support is fair to the national taxpayer. The government will continue to review passenger demand in line with the Prime Minister’s roadmap and will continue to support the fare revenues lost as a result of the COVID-19 pandemic.

The funding settlement sets out further measures to sustainably support London’s transport network. Within the next deal period, the Mayor has agreed to:

• deliver £300 million of savings or new income sources in 2021 to 2022
• deliver £0.5 billion to £1 billion of new or increased income sources each year by 2023
• prepare a revised medium-term capital investment programme
• carry out a review of TfL’s pension scheme
• set aside at least £100 million to continue the delivery of active travel programmes
• review options for long-term funding reform in partnership with the government

To help TfL achieve financial sustainability, the Mayor has agreed to prepare a plan to accelerate TfL’s existing modernisation programme of £730 million by April 2023. The Mayor has agreed to work collaboratively with DfT on a joint programme for implementing higher levels of automatic train operation on the London Underground, as is the case on many metro systems worldwide.

Over the course of this funding period, the Mayor and TfL will make progress towards the conversion of at least one London Underground line to full automation but with an onboard attendant. This technology has the potential to offer a more punctual, reliable, customer-responsive and safer service that is less susceptible to human error.

TfL will also lead market engagement into technology for protecting passengers at station platforms. The London Underground is the world’s oldest underground railway and the government is committed to supporting the capital’s transport network, ensuring that it meets the needs of Londoners as we recover from the pandemic and that it is modernised for the 21st century.

TfL and the London Boroughs are responsible for local road maintenance, including bridge repairs. London Borough of Hammersmith and Fulham is responsible for the safety and maintenance of Hammersmith Bridge. However, given the extraordinary circumstances of the pandemic, during the period of this agreement, we expect to draw up a memorandum of understanding between Her Majesty’s government (HMG), TfL and the London Borough of Hammersmith and Fulham to fund the reopening of Hammersmith Bridge – initially to pedestrians, cyclists and river traffic and, depending on cost, to motorists.

Funding will be conditional on the following:

• all parties must scrutinise and agree the cost of the project
• each party agrees to pay a share of the cost. Repair costs are to be led by the London Borough of Hammersmith and Fulham and TfL; HMG will not directly contribute more than one-third of the costs
• that the independent board responsible for the Case for Continued Safe Operation, reporting to London Borough of Hammersmith and Fulham, will conduct a new assessment for controlled and limited reopening of Hammersmith Bridge to pedestrians, cyclists and river traffic once further investigations and report validations are completed at the end of June. London Borough of Hammersmith and Fulham shares the assessment with the government and TfL

The government has repeatedly shown that it is committed to supporting the running of essential services across the capital while we recover from this pandemic, while ensuring fairness and value for money for the taxpayer. The government continues to work with TfL and the Mayor, so TfL can be financially sustainable as soon as possible.

This deal takes government support to TfL since March 2020 to over £4 billion, while continuing to spend money on vital infrastructure projects to level up the national transport network outside of London.