
- By Sophie Crossley
- In Useful Stuff
Autumn Budget 2024: What does it mean for energy and the built environment?
Yesterday, Chancellor Rachel Reeves shared the first Labour budget in 14 years. With net zero deadlines on the near horizon and the built environment asking for more support, we want to know: Did the budget hit the mark?
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Key budget takeaways for the energy sector
Energy sector funding and investment
- Great British Energy (GBE): £125 million in funding (2025-26) for clean energy, with £100 million in capital funding. Headquartered in Aberdeen, GBE is set to drive investments via the National Wealth Fund.
- Energy (Oil and Gas) Profits Levy (EPL): The tax/levy rate increased from 35% to 38%, as a means of deterring growth in the oil sector. The 29% investment allowance removal was also extended until March 2030.
- Public Sector Decarbonisation Scheme: Over £1 billion for local energy projects across the NHS, schools, and public buildings to reduce emissions and costs.
- National Wealth Fund (NWF): Targets £70 billion private investment into UK clean energy and growth sectors.
- Climate Change Levy (CCL): Main rates to rise in line with RPI for 2026-27; LPG rate to remain frozen.
- Carbon Border Adjustment Mechanism (CBAM): Launch in 2027 to tax imported goods with high emissions.
- Advanced Fuels Fund for Aviation: Extended to support sustainable fuel development in aviation for net-zero goals.
Carbon Capture and Clean Energy Projects
- Carbon Capture, Usage, and Storage (CCUS): £3.9 billion in 2025-26 for the decarbonising industry, aiming to mobilise £8 billion in private investments.
- Sizewell C: £2.7 billion allocated through 2025-26 to progress nuclear energy; final investment decision in spring.
- Green Hydrogen: Contracts for UK-wide projects using renewable energy; significant funding for electrolysis projects in Scotland and Wales.
- Great British Nuclear’s Small Modular Reactor competition is ongoing and has entered the negotiation phase with shortlisted vendors. Final decisions will be taken in the spring.
Electric Vehicles (EVs)
- Charging Infrastructure: £200 million (2025-26) to accelerate EV charge point installations, focusing on on-street and local authority rollouts.
- EV Purchase Incentives: £120 million in grants for new electric vans and wheelchair-accessible EVs.
- Tax Incentives: Continued tax relief for EV purchases and installation of charge points.
Industrial Strategy Initiatives
- Onshore Wind and Solar: De facto ban on onshore wind reversed; approval of major solar projects totalling nearly 2GW.
- The government launched a green paper on its modern Industrial Strategy earlier this month. It set out the eight growth-driving sectors (advanced manufacturing, creative industries, clean energy industries, defence, digital and technologies, financial services, life sciences, and professional and business services) and announced that the government will produce plans for each sector as part of its commitment to help them thrive.
- To help ensure the Industrial Strategy is long term in nature, the government is establishing an Industrial Strategy Advisory Council chaired by Clare Barclay.
- The government will also provide 10-year budgets for key R&D activities, which will create an environment for productive long-term partnerships with industry. These will be set out as part of Phase 2 of the Spending Review.
- The government will extend Innovation Accelerators into 2025-26 to continue to bolster high-potential innovation clusters in the Glasgow City Region, Greater Manchester, and the West Midlands.
Key takeaways for the built environment
Extra funding for school and NHS buildings
Schools will receive an extra £550m, a total of £1.4bn, over the next year in funding to build new schools and renovate existing ones, especially those affected by RAAC. The School Rebuilding Programme, originally announced in 2021, promised 50 new schools per year, but so far just 23 schools have been completed. The programme currently covers 518 projects. For the NHS, the Government says there will be an extra £1.57bn of capital investment – spending on equipment and buildings – that will come through in the next financial year. The Chancellor said this funding would help ‘to address the backlog of repairs and upgrades across the NHS estate’.Delivering homes
A further £500m has been allocated to the Affordable Homes Programme, helping to fund the construction of 5,000 new affordable homes, and as a head start to the housing strategy due to be announced in Spring 2025. £128m will also be put towards new housing projects. This includes:
- Confirmation of a £56m investment at Liverpool Central Docks which is expected to deliver 2,000 homes in North Liverpool, along with office, retail, leisure, and hotel facilities.
- A £25m investment in a joint venture to establish a new fund with Muse Places Limited and Pension Insurance Corporation to deliver 3,000 energy-efficient new homes across the country, with a target of 100% of these being affordable.
- Confirmation of £47m to local authorities to support the delivery of up to 28,000 homes that would otherwise be stalled due to ‘nutrient neutrality’ requirements. This funding will also clean up rivers in the process.
Brownfield sites
54 councils have been awarded a slice of a £68m Brownfield Land Release Fund allocated for unlocking brownfield sites across the country. The money is for the more complicated preparatory works that many brownfield sites require. The Government said the pledge was part of its commitment to deliver of 1.5m homes over the next five years.
Debt rules
The Treasury has confirmed a change to their own debt rules to free up funds for infrastructure projects. The change will involve introducing independent checks for major building works and loosening the rule that debt must be lower after five years of borrowing. The Treasury says this will allow for more efficient borrowing for investment in infrastructure, including rail, road, and building sectors.
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