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Darling’s green targets offer ‘challenge and opportunity’

The construction industry is facing new targets to cut the carbon footprint of the nation’s building stock following the delivery of Alastair Darling’s first budget as Chancellor.

Mr Darling said all new non-domestic buildings would have to be carbon neutral from 2019. This is in addition to an existing goal that all new-build homes become carbon neutral by 2016.

The British Property Federation said the new aim offered a great opportunity for the commercial property sector to make “a long-standing and real contribution” to the green agenda.

But experts admitted the policy - which Mr Darling said would cut emissions by 75 million tonnes over the next 30 years - will be a challenging target to meet.

Jon Lovell, the head of sustainability at property consultancy firm Driver Jonas, said: “There needs to be a robust approach throughout the industry. A fundamental overhaul of the way energy is generated, supplied and used is also needed, ensuring that developers are enabled to properly achieve the new targets.”

Arguing the budget’s sustainability measures did not go far enough, the British Council of Shopping Centres president Martyn Chase said he would have liked to have seen energy-saving incentives for existing commercial buildings.

Another key announcement was the dedication of £60 million over the next three years to improve skills, tackle shortages of skilled workers and increase the number of apprenticeships.

Chair of the Recruitment and Employment Confederation’s construction sector Trevor Rees said it was encouraging to see the commitment but admitted: “The real test will be in how the Chancellor uses it.”

Analysis: Figures show cut in short-term spend

By Allan Wilen

Alistair Darling’s first budget reiterated promises to invest more in health, education and social housing.

He emphasised long-term commitments and analysis of the figures reveals why. Some £4.1 billion, or 2.4 per cent, less will be available over the next three years to fund construction and other capital projects than announced in last autumn’s Comprehensive Spending Review. Also, specific Budget measures will add to the cost of delivering projects.

In addition to the rise in fuel and energy costs, the ‘inflation’ increase in the Climate Change levy will add to the cost of manufacturing energy intensive materials such as steel and cement.

An increase in the Aggregates Levy will raise a further £50 million from the industry.

The decision to phase out the land fill tax exemption for contaminated land presents brownfield site developers with a potential £40 per tonne additional cost to clean up their site from next year.

While the Olympic site should avoid the charge, developers and contractors will need to look at ways to prepare contaminated sites. In uncertain economic times, there is a risk the rise will make some sites uneconomic.

Allan Wilen is economics director at information provider Glenigan