Set against a backdrop of labour shortages, a supply crisis, soaring energy bills and the spectre of inflation, the Chancellor attempted an upbeat approach as he heralded an “economy for a new age of optimism” in his Autumn Budget and Spending Review.
The Chancellor was no doubt bolstered by the Office for Budget Responsibility’s revised growth forecasts that show faster than predicted growth, from 4% to 6.5%. Announcing a new “charter” for budget responsibility, the Chancellor outlined that underlying public sector net debt should be falling as a percentage of GDP, with the government only borrowing to invest with everyday spending paid through taxation. The Chancellor also revealed that each government department will see a real-terms increase in overall spending over the parliament, growing in real terms by 3.8% per year.
- Building Back Greener – £620 million of new investment over the next three years to support the transition to electric vehicles. £3.9 billion to decarbonise buildings, including £1.8 billion to support tens of thousands of households make the transition to net zero
- Net zero innovation – £1.5 billion in net zero innovation for more resilient energy, including £107 million offshore wind in Teesside. An additional £1.7 billion to enable a final investment decision for a large-scale nuclear project
- Decarbonising industry – £1 billion for Carbon Capture Usage and Storage and £140 million to support hydrogen producers
- Investment relief – businesses will receive investment relief to adopt green policies such as solar panels
- Housing – £11.5 billion to build 180,000 new affordable homes + £1.8billion to bring brown-field land into use to create 1 million new homes
- Skills – a total spend of £3.8 billion on skills by 2024-25, including a commitment of funding 20 Institutes of Technology, upgrades to the FE college estate across England and providing more hours of study for T-level students
- Apprenticeships – funding will increase to £2.7 billion by 2024-25
In reaction to the Chancellor’s statement, John Agnew GGF, Group Managing Director commented:
“Though the Chancellor has outlined some billions of pounds being spent on decarbonisation, we have yet to see any robust and viable scheme for tens of millions of homes that need energy efficient measures installed to properly insulate their homes. The GGF estimates that over one hundred million windows need upgraded to achieve the net zero targets by 2030 and 2050. The focus of this latest Budget and Spending Review seems to be on the energy supply side and not on the conservation of energy and saving of energy. It is disappointing that the Government hasn’t shown more ambition and offered greater support for the home improvement sector, not just on energy efficiency incentives but also on the more immediate issues such as shortages on raw materials, delivery drivers, skilled labour and specific training funding.”