Skip to main content

You are here

A disappointing budget for energy saving in buildings

A disappointing budget for energy saving in buildingsThursday, 1 November, 2018

 

Phillip Hammond budget October 2018

The silence from the Chancellor on energy and climate change was very noticeable. Only three weeks after the Intergovernmental Panel on Climate Change (IPCC) warned that we have only twelve years to take action to address disastrous global warming, the term ‘climate change’ did not feature in Philip Hammond’s speech. And – while there is some focus on the transition to clean transport in the details of the budget –  concrete actions on clean energy for home owners, in buildings, for communities and smaller businesses were absent.

The chancellor’s is silence contrasts markedly with a recent ramping up of government statements and commitments to address climate change, including in buildings. During Green Great Britain Week (October 15-19th), which coincided with the publication of the IPCC 1.5C report, the Government requested guidance on a stronger long-term carbon saving target for the UK. The publication of the Industrial Strategy earlier this year included a commitment to fund research work to halve energy use of new buildings, and the Clean Growth Strategy at the end of last year suggested new targets for long term home energy efficiency.

We hope the lack of focus in the budget on energy and climate change, and most notably the total absence of discussion of housing and energy, is because the government is planning further major announcements in this area to coincide with the Comprehensive Spending Review and a new National Infrastructure Strategy in Spring 2019.

Even if that is the case, it’s still hard not to see the budget as a missed opportunity. For example, the chancellor discussed extensively, and announced new investment in, measures to promote productivity. That could have included a focus on building Britain’s capabilities as a world leader in renewable energy and energy efficiency.

The limited content in the budget that did relate to clean energy in buildings included references to:

  • The National Infrastructure Assessment, which was carried out earlier this year and called for substantial extra investment in energy efficiency and low carbon heating in the built environment. The budget told us the government will respond with a new National Infrastructure Strategy in the spring – presumably this will link to the Comprehensive Spending Review.
  • A commitment to an Energy Efficiency Call for Evidence for businesses and a £315m fund for energy efficiency for large energy-intensive businesses.  However, this new money will be found by axing another policy which has supported energy efficiency: Enhanced Capital Allowances (ECAs) for energy and water technologies will be removed from 2020. The ECAs give tax discounts for all businesses in installing energy efficient and water saving technologies. So, worryingly, money for energy efficiency for all businesses – including SMEs - has been cut in favour of a fund to benefit only larger businesses.
  • There are new announcements of spending in the budget that could link to energy efficiency in buildings – including significant funding for regeneration of high streets and a much smaller announcement of £8m for funding for refurbishment of village halls. Both these policies could support the installation of renewable energy and energy efficiency measures, which will save carbon and reduce running costs for high street businesses and community groups.
  • One of the positive announcements in recent months has been the Grand Challenge in the Industrial Strategy. One of those challenges is to halve the energy used in new buildings, and the government announced extra funding focused on the grand challenges in the budget. But we don’t know how much.

From the perspective of energy efficiency in buildings, we’re now looking beyond the budget to two key documents.

We were told during Green Great Britain Week that an action plan on energy efficiency, primarily for owner occupiers, would be out by the end of the year. That’s an area where there are currently no policies at all, so it’s a very important next step. And, most importantly of all, we look to the National Infrastructure Strategy and the Comprehensive Spending Review in the spring to unlock new government money to make our buildings warmer, lower carbon-emitting and cheaper to run.

More on this...