Budget lacks support for research and renewables

21 March 2013
By Edd Gent
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Chancellor George Osborne delivers his Budget statement to the House of Commons

Chancellor George Osborne delivers his Budget statement to the House of Commons

The fallout from yesterday’s budget has continued with lack of spending on research facilities and the green economy top of the agenda.

The Campaign for Science and Engineering (CaSE) said they were disappointed not to see more spending on research facilities promised in yesterday's Budget.

The coalition Government's last two Budgets included additional commitments to capital investment in laboratories and equipment which had reduced the research capital shortfall, which stood at nearly £1.7bn following the 2010 Spending Review, to just over £300m.

But Chancellor George Osborne left the shortfall unchanged in yesterday’s announcement.

CaSE acting director Beck Smith said: "The string of research capital announcements over the last two years since the Spending Review have almost addressed the shortfall, but just getting us back to zero isn't going to be enough if we're to remain internationally competitive and make the most of our research base.

"While the expansion of the SBRI (Small Business Research Initiative) recognises the role that Government departments can play directly in driving innovation, it's important to remember the important role they play as consumers of the research base when they fund the R&D needed for evidence-based policy.”

She added: "Cutting departmental R&D budgets must not be seen as an easy way to achieve the additional 1 per cent cuts to departmental budgets announced today."

Sir Paul Nurse, president of the Royal Society, said the Government was still not doing enough to support British research and development.

He said: "An increase in R&D tax credits is good news, but the sad reality is that the Government only spends 0.57 per cent of GDP on R&D; to keep pace with other key countries this should be closer to 0.8 per cent.

“Our businesses also lack ambition, with the combined public and private sector spend on R&D being only 1.79 per cent of GDP when countries we are competing with are spending around 4 per cent."

And while the Chancellor expressed his support for the green economy yesterday, saying "creating a low-carbon economy should be done in a way that creates jobs – not costs them", the Renewable Energy Association (REA) was disappointed at the lack of specifics.

REA chief executive Gaynor Hartnell said: “In response to Lord Heseltine’s call, the Budget referred to the Energy Bill, but our members are sceptical that the new regime will bring forward the major investments needed.

“We are working with the Department of Energy and Climate Change to resolve this, but there are no guarantees at this stage. The Chancellor missed an opportunity today to ensure us that there is consistent, strong support for our sector across Government.”

She added: “There is no meaningful dialogue between the Chancellor, who speaks solely of the growth opportunities of gas and nuclear, and those calling for investment in renewables.

“We welcome the renewed emphasis on infrastructure, as well as the Budget document’s statement that Government will consider making more use of independent experts. Local, smaller scale renewables are every bit as critical to modern energy infrastructure as the major projects.”

RenewableUK took a more positive stance on the Chancellors comments on low-carbon projects, and also his announcement of a £15bn boost to infrastructure spending over the remainder of the decade, calling on him to foccuss spending on renewable projects.

RenewableUK director of policy Dr Gordon Edge pointed to projects like the proposed Siemens offshore wind turbine factory in Hull, which could bring hundreds of jobs and hundreds of millions of pounds of investment to the area.

He said: "These low-carbon infrastructure projects will help us future-proof our economy and reduce what we have to pay to import expensive fossil fuels. Offshore wind is a proven technology which we have the opportunity to lead the world in and help us win the ‘global race’ that the Chancellor spoke about.”

But despite the boost to infrastructure being generally well received, Juergen Maier, managing director of Siemens Industry UK and Ireland said the Government could have committed more funds.

He said: "It was welcome news that borrowing appears under control, but with growth forecasts revised downwards, I was hoping for some more of the underspend to be invested in infrastructure projects.

“The Chancellor’s account of our infrastructure was seen through rose tinted spectacles and actually much more is needed to support energy and transport.”

But regardless of whether enough money has been committed to infrastructure, project management consultants the Nichols Group says converting this pledge into end-results is now the responsibility of the project management community.

Mike Nichols, group founder and chairman of the Association for Project Management, said: “The project management community can also do more to get projects underway and jobs created quickly.

“We can get a pipeline of sound projects ready; present them in ways that the financiers and  guarantors in Treasury, finance directors and wealth funds can more speedily evaluate them; get more commercial people trained so the contracts are let; and manage and assure well to ensure that each project succeeds."

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