Response to the Chancellor’s Spending Review

The Chancellor’s statement yesterday was well trailed beforehand so there were few surprises. It seems that the “greenest government ever” is in fact true blue in tooth and claw with a continuing policy of reducing leadership in central government (by decreasing funding of staff) and increasing the expectation of self-reliance by industry.

Buried in the lengthy statement that dwelt very largely on the “back to work” theme was the commissioning of HST1, the prospect of a new North South Crossrail and additional funds for flood defences. All good news for the concrete farmers.

As far as greenness was concerned, there was little said but it is clear that the message concerning the long term availability of secure energy is now well embedded. A number of key issues were put forward:

• Firstly there was the promise of a strike price for electricity that may bring the construction of new nuclear a little nearer. Without this underpinning of future revenues the private sector is always going to be shy of the massive investments needed with very long term recovery periods.
• Secondly there was the promise of additional investment incentive for shale gas exploration. Shale gas has the potential to fill a difficult hole in energy supply whilst the nuclear builds take place. Hardly green but a pragmatic response badly needed.

One of the difficult issues our industry is going to face is the additional loss of leadership/sponsorship and infrastructure that civil servants have given us through departments such as DCLG, BIS and DECC. As their resources have been pared to the bone, it is unsurprising that delays associated with regulation, planning reform, energy reduction programmes (Green Deal for example) are becoming ever more visible. The question is do we have the energy will and resource to fill that void? The Chancellor specifically identified other industries as the future – “synthetic biology to grapheme” but did not repeat his earlier commitment to a zero carbon built environment.

In a nutshell my take-away from this statement is one of the need for self-reliance and the need to build better “regulation” from within our community rather than expect government to lead. Either that or don a cowboy hat.