Local council budgets are under extreme financial pressure. Although the UK narrowly avoided a recession, the cost of living crisis continues to bite. In such a bleak economic context, it’s not uncommon for local authorities to have deficits running to hundreds of millions of pounds. In London alone, councils are collectively looking at a funding gap of £400m this year and £700m next.

In the midst of continued economic uncertainty, initiatives to tackle the climate crisis might not seem a priority – with the budgetary focus instead being on essential services. But what if green measures were both a good way to save money for such services and help local businesses?

Moving to a low carbon circular economy isn’t an idealistic optional extra, but an effective and practical way to help towns and cities tackle their current raft of socio-economic problems. Far from creating additional expenses, going green lowers costs and builds resilience against future financial shocks.

A circular economy is the opposite of our current throwaway society. Fundamentally, it means making much better use of our natural resources, by reusing and repurposing them. It’s about viewing resources like energy, wood, metals and food as precious – and treating them accordingly. In many ways, it’s about going back to old values of ‘waste not, want not’, but with a modern twist.

When it comes to waste, the potential benefits are huge. Introducing circular practices could cut a town or city’s waste by up to 60%. Rather than simply burning used items or sending them to landfill, a new use could be found for them.

Embracing the circular economy paves the way for exciting new business models. Rather than encouraging people to always buy new, trailblazing businesses are extending (and sharing) the life of items through rental models that allow people to borrow things that are only needed for a short period of time.

Digital innovations are bringing communities together. Sharing apps, for example, help people to reduce food waste by sharing any surplus foods (or other items) with their neighbours. Working with local authorities, the reach and amplification can be amazing.

Refill and repair services are also a key part of the approach, so that packaging is cut to a minimum and items last as long as possible.

Through the establishment of these pioneering business models, going circular also means the creation of green jobs. Our recent research ‘The circular economy at work’ found it could create over a quarter of a million new jobs in London alone by 2030. These well-paid, accessible new jobs would be driven by the waste sector collaborating with businesses and local authorities to recirculate over a million tonnes of materials. They’d help the workforce acquire skills for the future, as the global economy shifts to circularity in the face of the interlinked climate and cost of living crises.

Towns and cities are the engine room of the circular economy. With around 55% of the world’s population living in urban areas – and this is projected to grow to nearly 70% by 2050 – these are where all the key actors are concentrated. Governments, businesses and citizens co-exist in urban areas like nowhere else. That’s why they can lead the way when it comes to saving money, protecting the environment and reducing emissions with the introduction of reduce, reuse, repair, rent, share and recycle models of working.

Transforming the way our whole economy works might understandably feel like a daunting undertaking. In practice, we’ve found that starting local and making it hands-on is key. In many cases, circular alternatives are often better, cheaper and more efficient than new options, particularly if sourced locally. Community-based initiatives are essential in encouraging people to form new habits while helping councils and businesses to create thriving neighbourhoods – delivering both environmental and economic positive outcomes.

Improving waste and resource management makes just as much economic as environmental sense. The move away from a linear ‘take, make, dispose’ society towards one that minimises its environmental impact not only helps struggling individuals make more of the stuff they already own – but also bolsters councils and businesses against spiralling costs. The time has come to revolutionise our relationship with stuff, so we can work and prosper within our planetary limits.

Wayne Hubbard is CEO of ReLondon.