The climate on climate change has changed. The scientific warnings are quite clear. The economic warnings are alarming. We can no longer afford to fiddle while our world warms. With these warnings come huge implications for local government and other public bodies across England and Wales. From investments in local infrastructure to enable it to adapt to increased flood risk, to changing the way councils view their use of energy, fuel, water and raw materials, to reducing green house gas emissions and increasing biodiversity in local areas. The time for action is now. Most councils will be aware of the Comprehensive Area Assessment (CAA) consultation last week, but many have yet to realise it includes a new emphasis on sustainability and climate change. In recognition of the immensity of the challenges, the Audit Commission has proposed a significant change in the way we assess councils and other public bodies by incorporating into our assessment programme a look at their management of natural, as well as financial resources in delivering value for money. Our proposals are out for consultation until February 2008, but we envisage a focus on environmental sustainability being embedded in the different building blocks of the new CAA regime. Under proposals for the scored ‘use of resources' judgment, local public service bodies will be assessed on their strategies for reducing their impact on the environment, and the related outcomes. Different services will have different aims, whether for a large police force, a small district council, an urban fire authority or a rural county council, the particular issues will vary. Nevertheless, what they have in common is that they must all demonstrate how their organisation is using its natural as well as financial resources to achieve value for money in a sustainable way. Organisations will show how they are planning for the risks thrown up by a changing climate, as well as reducing their greenhouse gas emissions. For a council to be scored as ‘performing well' in its use of natural resources, it must show that it has ‘embedded arrangements to reduce its environmental impact and is working effectively with its partners to develop, implement and monitor its environmental impact'. It is worth highlighting that the changes we are proposing are not designed to place onerous demands on public bodies. More than 200 English councils have now voluntarily signed up to the Nottingham Declaration, which commits them to the delivery of the UK Climate Change Programme, the Kyoto Protocol and targets for carbon dioxide reduction, so they will already be assessing these factors. Strategies are being developed at authorities across England, and our assessments are expected to support those already significantly engaged with the issue. Just as important as reducing public bodies' own use of natural resources is their leadership on environmental sustainability in local communities. The public service inspectorates will, therefore, be assessing the prospects for more sustainable local communities as part of the area risk assessment. Local authorities, in particular, will be expected to use their community leadership role to facilitate the necessary changes in behaviour if the UK is to achieve its demanding targets for reducing carbon emissions. This encompasses a wide range of activities, such as planning sustainable housing developments, improving the energy efficiency of existing housing, transport planning, encouraging waste reduction and recycling. Environmental sustainability is jostling for priority, in many parts of the country, with the need for greater prosperity and better life chances for local people, and our assessments will take account of local circumstances. But, it is also clear that economic development must now go hand in hand with sustainability, if it is to bring long-lasting benefit. If local public bodies are successful in persuading businesses and local people to participate in these changes, our communities could look and feel very different in a few years' time. Done well, we could find that reducing our carbon emissions goes together with a healthier lifestyle, and makes our streets feel safer. The best examples of sustainable thinking at home and abroad show that these are not hopelessly-idealistic ambitions, but highly-achievable ones. Our proposals outline a bold step in this direction. A direction which is no longer a choice, but a necessity. Michael O'Higgins is chairman of the Audit Commission