Sector leaders call for more net zero innovation incentives in spring Budget | New Civil Engineer

Hunt’s Spring Statement is due on Wednesday 15 March and is predicted to focus on the government’s plans to reduce inflation and public debt.

Meanwhile, civil engineering organisations are united in their desire for more tax incentivisation to reach net zero. The current UK goal is for outright net zero by law in 2050 but many believe government support is insufficient to reach the target within the built environment sector.

WSP head of economics Jim Coleman believes tax incentives for innovation and small businesses that can help the UK reach its net zero target are vital in the upcoming budget.

He said: “To reach the UK’s net zero commitment by 2050, the UK must also rapidly grow new technologies and energy sources, especially hydrogen and CCUS [carbon capture and storage].

“Through tax-based incentivisation for innovation, research and development (R&D) and proactive support to industries critical to decarbonisation, UK government can also enable the growth of smaller businesses which are at the cutting edge of environment and energy technologies, in turn helping UK industry to take a global lead.”

Arcadis UK cities director Peter Hogg agrees with this sentiment and further believes more funding solutions and a reform of the apprenticeship levy are vital for net zero.

He said: “To really turbocharge the net zero agenda, we need to see funding solutions – such as R&D incentives – for retrofit and decarbonisation, as well as reform of the Apprenticeship Levy to ensure we have the skills to lead drive to zero carbon.”

WSP are also in agreement that a reform of the Apprenticeship Levy is important for net zero.

Coleman said: “Skills and workforce development remain critical to advancing the net zero agenda across the built environment and broader urban infrastructure. So it is vital that the budget enables greater investment in further and higher education, including the promotion of apprenticeships in key sectors through a more strategic use of the apprenticeship levy.”

Association for Consultancy and Engineering (ACE) chief executive Stephen Marcos Jones said he was pleased to see a focus on innovation and infrastructure in the Autumn Statement last year. He further welcomed the creation of a dedicated Department for Energy Security and Net Zero as part of a mini-government reorganisation earlier this month.

Jones now hopes the chancellor will press ahead and build on that momentum within this month’s budget.

He said: “A clear focus on the green economy and infrastructure is vital to the UK’s economic and social recovery, and the opportunity ACE and Energy Industries Council members have to deliver net zero solutions is immense.

“Whether that’s in designing the infrastructure for the transition to green energy, retrofitting old and existing housing stock, or embedding sustainability into new and existing communities. The construction and infrastructure sector has a vital role to play if net zero is to be successfully achieved on behalf of both this and future generations across the globe.

“With that in mind, we would like to see the government make positive budgetary decisions in two areas. First, how we turn ambitions on the green economy and green growth into reality and, second, how we deliver on the infrastructure pipeline, despite tough economic times.”

Within this, ACE has made its own submission to the budget. Within the climate section of this, it has asked the government to “provide a clear and stable policy platform, alongside funding for innovation which gives companies and industry the confidence it needs to innovate, and to prioritise resilience and climate mitigation based-solutions”.

In particular, it has requested a roadmap for developing and deploying R&D and relevant technologies.

Organisations have also been keen to highlight is Levelling Up. Hogg and Arcadis see a “less torturous process” to Levelling Up Fund bidding as a key priority of this statement.

Hogg said: “After a chaotic last year in political and economic terms, major foreign direct investors in the UK like us are looking for and expecting rational, progressive measures in the budget to restore confidence and re-establish the UK’s global credibility for attracting investment.

“There are some key priorities – a far simpler, less tortuous process to replace endless rounds of competitive bidding for Levelling Up Funds and fewer, more meaningful allocations; a rethink of the withdrawal of R&D tax credits for SMEs; reforms to tax treatment of business investment and more details of additional shortage labour categories in the points-based migration system.”

SNP Westminster leader Stephen Flynn is calling on the chancellor to invest in the The Acorn carbon capture project at the St Fergus gas terminal in the north-east of Scotland to support both net zero and to create a host of jobs for the region. The project near Peterhead was given reserve status by the government in 2021 to favour sites in England.

Flynn said: “Carbon capture technology will play a key part in Scotland’s journey to net zero and provide a just transition for oil and gas workers in the north-east.

“However, the Tories have failed to back the industry with the support it needs, while at the same time the EU is getting behind carbon capture right across the continent – we cannot afford to be left behind.”

Institution of Civil Engineers director of policy Chris Richards said: “Inflation is putting the delivery of infrastructure pipelines at risk. The cost of materials, construction, and labour are all spiralling, so reprioritising projects will likely form part of the government’s plans. Clarity is needed sooner rather than later – deciding how to move forward can’t be left for another year.

“Regardless of how pipelines are prioritised, to get the most out of investment, the government should become an ardent champion of everything the industry is doing to deliver infrastructure more effectively, like the initiatives outlined in the Construction Playbook and in Transforming Infrastructure Performance.

“These best-practice approaches will help the industry, and the country, get more from every pound of investment.”

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