What the Budget means for building services

The Chancellor’s 2016 budget covered other measures besides welfare. Hywel Davies reviews the announcement for those aspects that may be of interest to building services

The full budget document is a weighty tome, running to more than 140 pages1. But tucked away in the detail are several areas of serious interest to CIBSE Journal readers.

The major one is paragraph 3.322, ‘Digital standards in construction’. It says ‘the government will develop the next digital standard for the construction sector – Building Information Modelling 3 – to save owners of built assets billions of pounds a year in unnecessary costs, and maintain the UK’s global leadership in digital construction’. The basic premise is to deliver the enabling standards set out in Digital Built Britain2, the government strategy for Level 3 Building Information Modelling (BIM), in a £15m programme of work, which is still being worked out.

We will need to pay close attention as the ‘digital strategy’ unfolds

However, the announcement of this initiative to develop Level 3 BIM should not have a significant impact on completion of the Level 2 programme, which comes into force for central government procurers as you read this.

Some of the opportunities identified in the Level 3 strategy include:

  • creating international, ‘open data’ standards to enable easy sharing
  • establishing a new contractual framework for projects procured using BIM, to ensure consistency and to encourage collaborative working
  • creating a cooperative, sharing and learning cultural environment across the market
  • training public sector clients to use BIM to support their data requirements, operational methods and contractual processes
  • driving domestic and international growth and jobs in technology and construction.

BIM Level 3 will require changes in supply-chain working patterns, and will have implications around ownership of the BIM model in various scenarios. While, long term, BIM may contribute to reducing the costs of the government estate and infrastructure assets, coordination and learning costs will accompany its introduction.

The ‘digital strategy’ is the key means by which the government intends to drive reform of the construction sector, so we will need to pay close attention as it unfolds. It would be good to see the Level 3 programme learning from the experiences of Level 2, and seeking to engage all the key players in a collaborative approach from the outset.

The budget also included the widely expected demise of the Carbon Reduction Commitment (CRC), after last year’s consultation on simplification of the business energy efficiency tax landscape. Paragraph 2.170 announces its abolition from the end of the 2018-19 compliance year, with a final surrender of allowances in October 2019. 

Upwardly mobile Liverpool: Devolved regions could allow more tall buildings to be built under plans revealed in the budget

The main rates of the Climate Change Levy (CCL) will increase from 1 April 2019, to cover the shortfall from CRC and to ‘incentivise energy efficiency in CCL-paying businesses’. In the meantime, the main rates for CCL and for CRC allowance prices will rise in line with the retail price index (RPI).

The CCL discount for sectors with Climate Change Agreements (CCAs) will be reduced to compensate for the CCL increase – from 90% to 93% for electricity, and from 65% to 78% for gas, from 1 April 2019. The eligibility criteria for CCAs will remain until at least 2023, with a target review to include the buy-out price for periods 3 and 4 starting in 2016. The main rates of CCL for different fuel types will be rebalanced to reflect recent data on the fuel mix used in electricity generation, with a long term aim ‘to reach a 1:1 ratio of gas and electricity rates by 2025’. CCL exemptions for renewable energy will end from 31 March 2018.

There is a commitment to consult later in 2016 on a simplified energy and carbon reporting framework, for introduction by April 2019. This is significant because the next round of ESOS reporting is due to be completed in December 2019.

Finally, in the section on housing and planning, paragraph 2.289 says that ‘following the consultation on building up in London and to help increase densities on brownfield land and reduce the need to ‘build out’, the government will consult with city regions on extending similar powers as part of devolution deals’. We may be looking at more high-rise developments outside of London, so may need to develop knowledge and skills to deliver tall buildings more widely.

Building higher poses specific building services challenges because of the effect of gravity and increasing pressures. CIBSE currently has limited guidance on this aspect of building; is it time we developed some more? Email your thoughts to technical@cibse.org


1 Budget 2016: documents

2 Digital Built Britain​, Level 3 Building Information Modelling – Strategic Plan.

Hywel Davies is technical director at CIBSE