All the green details from the government's new Spending Review and National Infrastructure Strategy
Chancellor Rishi Sunak unveiled his first Spending Review to Parliament this afternoon, outlining a raft of public spending plans geared at resuscitating the UK economy as the nation battles through the ongoing health and economic crises.
With UK GDP expected to contract by a 11.3 per cent this year - the largest fall in national economic output in three centuries - and the health emergency far from over, Sunak warned that the "economic emergency has only just begun" as he confirmed controversial plans to cut the UK's aid budget and freeze the majority of public sector pay, outside of the NHS.
While emphasising that investments that abate the ongoing health crisis were the government's top priority, Sunak outlined plans to "deliver a once-in-a-generation investment in infrastructure" that creates jobs, grows the economy, and bolsters local communities. The new measures include a National Infrastructure Bank, geared at derisking private investment in major infrastructure projects, a 'levelling up fund' designed to support projects in the UK's regions, and an R&D investment blitz.
Here, BusinessGreen rounds up all the main green policies, commitments, and investment pledges in the Spending Review:
An infrastructure bank 2.0
A new UK National Infrastructure Bank will be established to galvanize private investment in infrastructure projects that can deliver on the government's twin net zero and levelling up agendas, Sunak said. Headquartered somewhere in the north of England, it will operate UK-wide and allow the government and private sector to share the financial cost of key infrastructure projects.
The bank - set to launch less than four years after the government sold its dedicated green investment bank to Macquarie Group - will provide loans and offer financial advice to local and mayoral authorities developing key infrastructure projects.
Cuts to the UK's overseas aid budget
The UK's aid budget will be slashed from 0.7 per cent of GDP to 0.5 per cent, a reduction that could have a major impact on the UK's ability to demonstrate leadership on global climate adaptation and resilience at the COP26 Climate Summit it will host next year. Under the terms of the Paris Agreement, industrialised nations have pledged to provide $100bn in climate finance for developed nations.
Sunak emphasised the UK would return to the 0.7 per cent rate once the "fiscal situation allowed" and argued the UK overseas development agency budget would remain the second largest of all OECD nations, even after the cut. But green groups, opposition politicians, and some of the government's own MPs this afternoon aimed fierce criticism at the move.
Elsewhere, the Spending Review confirms the government is committed to the Prime Minister's 2019 promise to double its international climate finance (ICF) spend to at least £11.6bn between 2021 and 2025.
EV charging hubs at every service station
Ahead of the newly-announced 2030 ban on sales of petrol cars and vans, the Spending Review provides a more detailed break down of the government's EV and zero emission bus investment plans, which were announced in its 10 Point Plan for a Green Industrial Revolution.
The new funding settlement includes £950m to roll out EV charging hubs at every service station on England's motorways and A-roads; £275m for charge point infrastructure in workplaces, homes and on-street locations; and a new £90m pot for larger on-street charging schemes and rapid charging hubs. The Review also confirms the plug-in grant for zero and ultra-low emission cars, vans, taxis and motorcycles is to be extended to the 2022-2023 fiscal year.
And the government has reiterated its 10 Point Plan pledge to invest £120m into zero emission buses in 2021-2022, a sum it predicts will cover the cost of more than 800 green buses.
But lots of road building too
The government has remained steadfast in its controversial Spring Budget commitment to spend £27bn on roads, a pledge many have pointed out seems to be at odds with its 10 Point Plan pledge to encourage active travel and deliver a low carbon transport revolution. Over the next fiscal year, £1.7bn will be spent on maintenance and upgrades of local roads out of a total £19bn allocated for transport upgrades.
Investment in local infrastructure
The government has unveiled a new £4bn 'levelling up fund' that will invest in local projects deemed to be 'high value'. The list of projects singled out by the government as suitable for up to £20m from the pot suggests it will support developments that incentivise active and low carbon travel - such as railway station upgrades and bus lanes - but also projects that encourage driving and increase traffic, such as local road improvements. £600m will be made available in the fund's inaugural year, with bids from regions that have received less government investment to be prioritised.
Modest wins for the natural environment
The Treasury said £90m will be unlocked from the Nature for Climate Fund, the £640m fund announced in this year's March budget geared at increasing tree planting and peatland restoration in England. Meanwhile, the government has promised to double its funding for the hugely oversubscribed Green Recovery Challenge Fund, announcing a total of £40m for natural capital projects next year.
It has also increased the budget for National Parks and Areas of Outstanding Natural Beauty by £20m to £75, and allocated £7m on improve public access to green space by taking forward the Coast to Coast National Trail and England Coast Path.
However, wildlife groups argued the government's provisions for nature were disappointing and had failed to acknowledge the scale of investment required to address the rapid decline of nature in the UK, noting that the plan did not have any provisions for tackling invasive species and ignored proposals for the creation of a 'national nature service' that could upskill young people to carry out essential nature projects the country.
Deposit Return Scheme returns
The government confirmed its intention to introduce a national deposit return scheme and implement consistent collection of waste, including food waste, across every local authority in England by the end of the current Parlimentary term. But there were few further details on the government's wider circular economy plans.
An uptick in departmental budgets
Department spending is set to rise by 3.8 per cent in the 2020-2021 fiscal year, an increase Sunak said represented the fastest growth rate in 15 years.
The Department for Environment, Food and Rural Affairs is set to receive a £400m cash increase over the next fiscal year, while the Department for Transport will receive £700m more. Meanwhile, the department for Business, Energy and Industrial Strategy has been granted £2.4bn more in resource spending and £15.6bn in capital spending.
While a welcome boost, critics will note Whitehall budgets are still struggling to recovery from the austerity measures of the last decade and now face a bulging in-tray as a result of the coronavirus crisis and the looming end to the Brexit transition.
A boost in funding for innovation
Sunak announced that £15bn has been allocated to fund research and development (R&D) that can address global challenges, "from Covid-19 to climate change", as part of plans to establish the UK as a "scientific superpower". Of that number, £280m - or roughly 1.9 per cent of the total - will go towards "net zero R&D", of which £81m will be channeled into multi-year commitment for hydrogen heating trials.
Investment in net zero homes
The Spending Review reiterates the government's plan to extend the Green Homes Grant voucher scheme by a year past its original March deadline, and suggests Ministers are considering further measures to support building decarbonisation in the Spring. "The government is committed to spending £3bn on building decarbonisation, and will review this allocation in the spring, together with how it can best deliver this agenda over the course of this parliament," the Review notes.
The Spending Review also allocates £475m to make public buildings greener, £150m to help the UK's poorest homes become more energy efficient and low carbon, and a further £60m to retrofit social housing. Meanwhile, £122m is to be spent over the next fiscal year on the development of clean heat networks.
Net zero guidance for Treasury decisions
Updated guidance on the Treasury's Green Book, which governs how publicly-funded project proposals and policies are assessed, stresses that new projects should be judged on their contribution to the UK's net zero target or whether they are a "relevant constraint" on the target.
Possible 'net zero duty' for regulators
In a new National Infrastructure Strategy published today, the government said it was considering the introduction of a 'net zero duty' for regulators to ensure that regulators' activities and decisions are aligned with the the UK's decarbonisation agenda. "The government will continue to review the most appropriate measures, including a net zero duty, to ensure that regulators make the necessary contributions to achieve these targets," it said.
National Infrastructure Commission
The National Infrastructure Strategy also sets out new priorities for National Infrastructure Commission, which will include a major new study exploring the role of greenhouse gas removal technologies. But overall the strategy largely restated existing plans and highlighted the intention to deliver a pipeline of crucial infrastructure policy documents in the coming months, such as the Energy White Paper, Transport Decarbonisation Plan, and Hydrogen Strategy.
Scant mention of the climate emergency
Despite repeatedly stressing that the government's funding priorities were aligned with those of the British people, there was no mention of the climate or nature emergencies anywhere in Sunak's address to the House of Commons this afternoon. Polls reveal the British public is broadly united in its concern over climate change, yet the issue was notably absent from the Chancellor's catalogue of public priorities, which he said were stronger public services, new hospitals, better schools, and safer streets.