Spring Budget 2023: a blueprint for green growth?

Chancellor Jeremy Hunt recently unveiled the Spring Budget, and with it a wave of green investment and initiatives. Headlines included an unprecedented £20bn investment in carbon capture technology, along with new funding for nuclear – which is to be classified as “environmentally sustainable”. In addition to these measures, the government states further action is in the pipeline, ensuring energy security and commitment to net zero targets.

In the midst of escalating climate concerns, exacerbated by an energy and cost-of-living crisis, the Budget was an important opportunity to set out plans for long-term green growth. But are the announced measures enough?

• The Budget confirmed that up to £20bn would be invested in carbon capture over a 20-year period. The government claims that this funding will support up to 50,000 jobs, and capture between 20 to 30 million tonnes of CO2 a year by 2030.
• Energy bills for typical households are to remain capped at £2,500 until June under the Energy Price Guarantee (EPG).
• Nuclear power is to provide a quarter of the UK’s electricity demand by 2050, and will be classified as “environmentally sustainable” going forward.
• A total of 12 “Investment Zones” will each receive £80m of government funding over a five-year period, in a move to drive growth and innovation across the UK.
   

A clear commitment to carbon capture

The Budget confirmed that up to £20bn would be invested in Carbon Capture, Usage and Storage (CCUS) over a 20-year period; an unprecedented level of funding that aims to unlock private investment and job creation across the UK, with the East Coast, North West of England and North Wales being standout locations. The Chancellor claims up to 50,000 jobs will be supported through this proposal, while also helping to capture between 20 to 30 million tonnes of CO2 a year by 2030.
 

Extended energy relief support

Before the Chancellor made his budget announcements, the Treasury confirmed that the Energy Price Guarantee (EPG) would stay at £2,500 for a further three months, from April to June. While this news will please most homeowners, some industry experts argue that a stronger plan is needed to assure long-term resilience; namely the largescale green retrofitting of homes across the UK.
 

A new era for nuclear?

Receiving a place in the green taxonomy, nuclear energy will be classified as “environmentally sustainable”, meaning that it will count towards net-zero targets and potentially receive the same investment incentives as renewable energy. Under a newly launched Great British Nuclear (GBN) programme, the Chancellor claims that nuclear will provide a quarter of the UK’s electricity demands by 2050. This involves plans to develop Small Modular Reactors (SMRs), where GBN will host a competition for engineers to design the best builds.

Although these measures present new opportunities for green construction professionals, there was a notable absence of funding for wider renewables infrastructure – not least onshore windfarms and solar installations for commercial buildings.
 

Regional “Investment Zones” could support green growth

In a move to drive growth and innovation, 12 “Investment Zones” across the UK will each receive £80m of government funding over a five-year period. Described by the Chancellor as “12 potential Canary Wharfs”, these clusters will support four key sectors – including green industries – and could play a part in easing workplace disparities between London and the wider UK. However, it remains to be seen exactly which of these Investment Zones will support green industries, and how they will cater for new employment and upskilling opportunities.
 

Are these changes enough?

For many, the measures introduced by the Budget will be a welcome affirmation of the government’s commitment to reaching net-zero by 2050, building on the groundwork of existing legislation. But not everyone is content with the Budget’s proposals. Industry leaders, from businesses to NGOs, believe the announcements fall short of what is required to address climate change and a cost-of-living crisis. In particular, more urgent action has been called for the green retrofitting of homes across the UK, along with the installation of energy-efficient heat pumps.

However, delivering these sustainable improvements could necessitate an additional 350,000 workers by 2028, according to the Skidmore Review. And with our latest salary guide revealing that 97% of sustainability employers faced skills shortages last year, there’s a pressing need to upskill and reskill professionals. To build resilience in the face of an energy and climate emergency – and provide greater support for low-income households – deeper investment is needed in the people who can engender real change.

While the Budget lacked direction regarding investment in green skills, the newly introduced “Returnerships” could provide a part solution. Described as a “new offer promoting existing skills interventions to the over-50s”, this could lure back veteran professionals with invaluable experience. In an already aging construction workforce, however, more needs to be done to promote pathways into green building jobs and attract a wider range of talent.

To close, it’s worth considering a pertinent question asked in the Skidmore Review: “Does the UK wish to compete in the net zero race, with the chance to lead, or do we wish to simply observe from the sidelines?” The measures announced in the Budget alone are unlikely to put us in pole position, but through more focused investment in people and green skills, it’s still possible to achieve net-zero and a sustainable future.

If you’re looking to level up your green construction skills, enhance your career and work on exciting sustainable projects, get in touch with one of our specialist consultants today.