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2018 Budget falls short on clean growth and payment reform pledges

Chancellor offers some revisions to funding for government’s apprenticeship strategy, but comes under fire for offering limited fresh support for UK’s low carbon building ambitions

The 2018 Budget has set out fresh commitments to transform apprenticeship training that could have implications for the future of the building services sector.

However, this year’s commitments are seen by some environmental bodies as falling short of the effort required to sufficiently address and support national ambitions to realise lower carbon buildings through news approaches to design and HVAC technologies.

Chancellor Philip Hammond also made no mention of either the Grenfell Tower Fire or the collapse of construction giant Carillion in his latest budget, which saw a commitment to introduce a new Brexit-themed commemorative 50p piece next year among pledges that garnered news headlines.

Both Grenfell and Carillion’s collapse have dominated debate around the challenges facing the HVAC and construction sectors over the last 12 months, particularly around issues of safety and staff training. However, their impact has not been directly addressed in the latest Budget document or the chancellor’s accompanying speech.

Limited additional commitments were also set out for realising the government’s Clean Growth Strategy, unveiled last year to curb carbon emissions over the next three decades through new approaches to infrastructure, buildings and key functions such as heating and cooling.

Julie Hirigoyen, chief executive of the UK Green Building Council, said that a lack of commitment to further flesh out these ambitions and support low carbon innovations by the chancellor was disappointing just three weeks after a landmark global climate change report was released.

Findings released earlier this month from the UN-established Intergovernmental Panel on Climate Change (IPCC) demanded stricter limits be set on global temperature rises to ensure they do not exceed 1.5 degrees Celsius. This commitment will be vital to avoid irreversible damage to the environment, according to the IPCC>

Ms Hirigoyen said the 2018 Budget was notable for the absence of any clean growth measures, despite the government’s recent announcement that it would be seeking feedback from organisations such as the independent Committee on Climate Change (CCC) on reviewing current commitments to curb carbon emissions.

She added, “A number of important policies have been hit, with the scrapping of Enhanced Capital Allowances, making it harder for companies to invest in energy efficiency improvements, and the chancellor signalling his intention to weaken Carbon Price Support. This is at odds with the scale of the climate challenge and the urgency with which it needs to be tackled.”

“In the absence of leadership on clean growth in [the] Budget, it is now more important than ever that businesses show real leadership in reducing emissions. The construction and property industry has a huge part to play; we urgently need to begin decarbonising our buildings on a path to net zero emissions.”

The chancellor did announce that small firms taking on apprentices would be able to half their apprenticeship levy contributions to 5 per cent from the standard rate of 10 per cent. The commitment was said to be part of an ongoing £695m investment programme to boost apprenticeship numbers in the country. Additional commitments included an ongoing freeze on fuel duty.

Peter Finegold, education policy head with the Institution of Mechanical Engineers, said the organisation welcomed a stated commitment to provide £450m that would allow groups paying the apprenticeship levy to transfer 25 per cent of their levy to companies in their supply chain.

Mr Finegold said, “We also endorse the provision of Government funding to halve contributions smaller companies pay towards apprenticeship training from 10 per cent to 5 per cent.”

“Engineering has a long tradition of high quality apprenticeships. We hope these two measures announced in the Budget will contribute to continued progress to produce a generation of highly trained and adaptable technical experts.”

Priority concerns

Training was one of several key priority areas that building services organisations BESA and the ECA had jointly hoped to see addressed by the chancellor in the budget.

Alexi Ozioro, public affairs and policy manager with BESA, said ahead of the Budget that ringfenced cash retentions and a more formalised enforcement of prompt payments were among pledges that the association hoped to see in support of SMEs working in HVAC.

The organisation had also hoped to see additional incentives to encourage investment in low or no carbon technologies to support companies in transforming their business approach.

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