What does the Autumn 2021 Budget and Spending Review mean for Net Zero Buildings | Deloitte UK has been saved
In light of the UK Government’s recent ‘Net Zero Strategy: Build Back Greener’ documenting how it anticipates achieving net zero by 2050 and the Chancellor’s recent measures announced at the Autumn Budget and Spending Review, businesses must start planning how they will achieve such an ambitious target. The carbon footprint of their physical estate is a key part of this.
In our own recent survey of CFOs, financial leaders rated climate change as among the top risks facing their businesses. They also see the climate transition as fundamentally reshaping the business environment. More than two-thirds expect significant or wholesale changes in their own business model and operations over the next 10 years as a result of the move to net zero emissions.
Although meeting the UK’s net zero targets by 2050 will be costly, the UK has demonstrated that economic growth is possible whilst reducing carbon emissions: between 1990 and 2019, the UK reduced greenhouse gas emissions by 44% while GDP simultaneously grew by 78%.
With the built environment contributing nearly 40% of the UK’s carbon emissions (approximately half of this is from energy used in buildings and infrastructure), it is crucial that landlords, occupiers and developers have sustainability and net zero at the forefront of their decision making. With 80% of the UK’s buildings that will be standing in 2050 having already been built, it will be important that current stock is appropriately addressed, as well as ensuring new construction projects reduce carbon emissions.
How is the UK addressing the issue?
The Net Zero Strategy confirmed £26bn of public capital investment and the Budget and Spending Review has since confirmed that from March 2021, £30bn of public investment has been committed to the green industrial revolution in the UK from 2021-2025 (Figure 1).
This expenditure has been allocated across a series of initiatives including:
In addition to fiscal injections, business rates relief has been implemented to help encourage investment in property improvements. As a result, those businesses that make qualifying improvements to the property they occupy or operate will not face an increase in business rate bills for 12 months after. This scheme should help enable businesses to adapt to the rising demand to make improvements to their premises that support net zero targets.
The government will be distributing funds to address the climate crisis and become net-zero through methods such as fund investments (e.g. Net Zero Hydrogen Fund), grants (e.g. innovation grants and home upgrade grants), relief (e.g. business rates relief) and loans (e.g. for manufacturing wind turbine blades).
Sophie is an Assistant Manager within the Occupiers and Capital Projects team. Sophie joined Deloitte in 2018 and is an RICS Chartered Surveyor. Sophie has experience with private and public sector clients, helping them with workplace strategy, asset performance management and technology solution implementation programme.