The Chancellor’s first budget of 2023 may have been called a “Back to Work” budget but it included some key measures focused on infrastructure and development, and the government’s commitment to achieve net zero by 2050.
Here is a summary of the key points for the construction industry:
Infrastructure and development reforms
The Nationally Significant Infrastructure Projects (NSIP) action plan to reform the planning process has been published, with £15 million of associated funding in 2023-24. As well as speeding up and streamlining this process, the reforms require the environment and benefits to local communities to be considered and prioritised. The five reforms to the NSIP regime are:
- setting a clear strategic direction for infrastructure planning;
- operational reform to support a faster consenting process;
- realising better outcomes for the natural environment;
- recognising the role of local communities and strengthening engagement; and
- system capability- building a more diverse and resilient resourcing model.
The UK Infrastructure Bank (UKIB) Bill is also in its final stages in Parliament. The UKIB Bill, if passed, will give the UKIB the power to “accelerate investment into ambitious infrastructure projects which tackle climate change and support levelling up”. This supports the commitments to levelling up and regeneration announced in the budget.
The budget also committed further support to achieving nutrient neutrality, or ensuring that wastewater from new developments does not increase the levels of phosphates and nitrates in waterways. Where nutrient pollution levels are high, measures need to be taken to mitigate the impact. This has been “stalling housing delivery across 74 Local Planning Authorities, reflecting a major barrier to the government’s ambition of delivering 300,000 homes per year”. There will also be a call for evidence from local authorities on nutrient neutrality credit schemes.
Nuclear power viewed as a key part of achieving net zero
The budget reaffirmed the government’s commitment to investing £700 million in the Sizewell C nuclear power station. The Great British Nuclear (GBN) programme and the intention to reclassify nuclear energy as “environmentally sustainable” were also announced, and are “essential for the transition to net zero and confirms the government’s support for the growth of these critical green industries in the UK”. The GBN will support nuclear development, focussing primarily on Small Modular Reactors in the initial stages, with the government co-funding viable projects. The inclusion of nuclear energy in the green taxonomy with renewables is intended to stimulate higher levels of private investment.
Investment in Carbon, Capture, Usage and Storage (CCUS)
Up to £20 billion has been committed to funding Carbon Capture, Usage and Storage (CCUS), ahead of the announcement of projects shortlisted for the first phase of CCUS developments. There are also likely to be incentives to re-purpose oil and gas assets for CCUS when legislation on the tax treatment of payments into decommissioning funds by oil and gas companies is introduced in a future Finance Bill.
Climate Change Agreement extended
The Climate Change Agreement (which offers lower Climate Change Levy rates to organisations meeting energy efficiency targets) will be extended for a further 2 years and is open to new participants.
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