Comprehensive Spending Review: SWM Summary

The latest Comprehensive Spending Review took place on Wednesday 25 November and once again there is mixed fortunes for the sustainability sector.  Here is a summary of what we know, headed under the relevant West Midlands sustainability priorities:

Energy

  • The Department for Energy and Climate Change (DECC) budget will fall by 22%;
  • Support for low-carbon electricity and renewables will more than double;
  • The government will increase funding for the Renewable Heat Incentive to £1.15 billion by 2020-21, while reforming the scheme to deliver better value for money saving £700 million;
  • Permanently exempt Energy Intensive Industries like steel and chemicals from the cost of environmental tariffs;
  • Introducing a cheaper domestic energy efficiency scheme that replaces ECO will run for 5 years, saving an average of £30/household/year for 24 million households;
  • Warm Home Discount scheme will also be extended to 2020-2021;
  • Exclude energy generation from the venture capital schemes, to ensure that they remain well targeted at higher risk companies;
  • In the West Midlands, £60m of Government funding for the Energy Research Accelerator, based in the West Midlands, supported by a further £120m investment by industry and universities.

Environment

  • DEFRA’s day to day budget falls by 15%;
  • Commitment of over £2 billion to protect 300,000 homes from flooding by 2021;
  • £2.3 billion for over 1,500 flood defence schemes across the country;
  • Support the international efforts to tackle Climate Change by  increasing support for climate finance by 50% over the next five years;
  • £3 billion investment to safeguard England’s countryside through the Common Agricultural Policy, and protection of over £350 million funding for public forests, National Parks and Areas of Outstanding Natural Beauty.

Transport

  • DfT operational budget will be cut by 27% but capital spend will increase by 50%;
  • Development and sale of Ultra Low Emission Vehicles will continue to be supported, but in light of the slower than expected introduction of more rigorous EU emissions testing, there will be a delay of the removal of the diesel supplement from company cars until 2021;
  • All new cars to be effectively zero emission by 2040;
  • The West Midlands will see support for the HS2 station at Curzon Street Enterprise Zone in Birmingham and funding for an Eastside Metro extension to Digbeth, as well as creating new Enterprise Zones in Stoke and Staffordshire;
  • £300m to be invested in cycling, with Birmingham benefitting from the construction of 115 km of new segregated cycle lanes;
  • The launch of a competition for a new West Midlands rail franchise, which will incentivise bidders to deliver better services and enhanced capacity, along with better stations and access, both in the West Midlands and on commuter routes.

Jobs

  • Providing £5 million for a ‘Midlands Engine’ Trade and Investment Plan, to market the world-leading strengths of the Midlands overseas, including through an integrated events and trade missions programme;
  • The construction of a new hospital to be built in West Birmingham within the next five years, helping to reduce pressure on health inequalities and create more jobs for local nurses.

As this shows, the West Midlands is set to benefit from some of these specific policies albeit with an overall squeeze on spending for those departments able to influence the sustainability agenda.

However it will probably be several months before the full impact is know as several of the announcements and funding had been made previously, and the detail of the new money and policies will take a while to filter out. For example the day after the review, the plans to drop the £1 billion carbon capture pilot were ‘quietly announced’.

The Spending Review publication can be found here and the summary of benefits to the West Midlands can be located on page 65.

Alan Carr, SWM

Update 4/12

Government announces scrapping of Business Growth Support including Manufacturing Advisory Service by March 2016.  As the region with the highest concentration of manufacturing in the UK this will hit our businesses hard, while commentators are calling the proposed replacement via LEP business growth hubs as ‘peanuts’.