Department for Business, Energy & Industrial Strategy: Business recovery questions

Department for Business, Energy & Industrial Strategy: Business recovery questions

Article· By the Confederations of Timber Industries 

The Confederation of Timber Industries comprises the leading trade associations of Timber Trade Federation (TTF), Structural Timber Association (STA) and British Woodworking Federation (BWF), which between them account for the majority of timber businesses within the UK’s manufacturing and construction sectors, supporting over 200,000 UK jobs.

The timber industries are a key stakeholder in clean growth and low carbon construction, representing the only sustainable supply chain on the planet that can sequester and build with carbon.

Innovation

  1. What are the systematic barriers to business innovation? (e.g. regulatory systems, procurement or the network of contacts and exchanges that promote the sharing of ideas).

 

The following barriers hinder and/or disincentivise innovation in the construction industry:

  • Low demand for innovative construction methods due to the lack of a long-term pipeline of work.
  • Lack of certainty over future funding streams limits incentives for industry to innovate.
  • No compulsory specification of sustainable/low-carbon materials and methods in procurement policy.
  • Minimal safeguards which limit the risks for businesses to commit to research and innovation in low-carbon methods and materials.
  • Risk of policy clashes limiting the use of innovative materials.

 

  1. What specific actions would enhance the adoption and diffusion of innovation across the full breadth of UK businesses, including those far from the frontier? (e.g., are there policies that government should stop / start / continue, what role do big firms have in pulling innovation through the supply chain etc)

 

Certainty is required to encourage industry to adopt innovation on a greater scale. The government should:

  • Step in with a consistent pipeline of work, and underwrite it for a 24/36-month period, giving industry the certainty to invest and innovate.
  • With regard to housebuilding, a long-term spending commitment is needed, which reflects the intention to support the building of sustainable homes.
  • Incorporate ‘social goals’ requirements into procurement policy to ensure the most innovative materials and methods are prioritised e.g. incorporate a preference for using the lowest embodied carbon materials into every planning policy framework.
  • Provide industry with clear stipulations to operate within, which will deliver sustainable and efficient construction projects.
  • Develop a mechanism to ensure that these stipulations are properly enforced.

 

  1. What are other countries doing better than the UK in encouraging and promoting innovation?

 

Governments around the world are promoting of the use sustainable materials in construction, which is giving industry the confidence to invest in innovative low-carbon materials and methods.

United States

The US is investing in its natural resource base which is developing a market for the end product. This is encouraging both the planting of more trees and R+D for timber products.

France

The French Government will require all new public buildings to be made at least 50% from wood or other sustainable materials from 2022.

Sweden

The Swedish Government recognises that ensuring low carbon emissions from buildings is important, and from 2021 will require every new building to have its carbon footprint calculated, which it expects will drive increased use of timber.

Estonia

Estonia is the leading exporter of timber housing in Europe. Within the country itself, around 50% of new housing is built from timber, which tends to be a more cost-effective building material compared to alternatives in the country.

Belgium

The proportion of new homes built from timber is increasing rapidly in Belgium and now sits at 11%, up from 6.5% in 2011. There is a government drive towards supporting the use of sustainable materials such as timber and a focus on using natural rather than manmade materials.

Investment

  1. What aspects of the UK “offer” should we focus on enhancing? (e.g., specific regulatory burdens, skills gaps that disproportionately hurt investment).

 

The elements of the UK ‘offer’ which are restricting  the UK’s inward investment prospects currently are:

  • Regulatory uncertainty around Brexit – investors need clarity.
  • Skills gaps – there is currently a shortfall in the necessary skilled labour available domestically, and there is uncertainty on the ability to attract skilled labour from abroad in the future.

 

Government should work with the construction industry to coordinate, consolidate and communicate the opportunities and advantages of working in construction to students. Greater access to funding for Further and Higher Education is needed to develop resources to deliver the new apprenticeship frameworks – which in turn will increase the talent pool as we move forward.

  1. Are there any particular types of investor, project or investment that business and HMG should prioritise for investment in the UK? (e.g., specific sectors or projects critical to the UK’s future e.g. net zero, particular skills or technologies, or to locate in particular UK regions.)

 

The overriding priority for government should be the commitment to net zero in the form of encouraging the long-term delivery of low-carbon, sustainable and affordable housing.

A government-backed sustainable housebuilding programme will:

  • Fuel a low-carbon economic recovery across the UK by encouraging investment by industry in innovative methods and materials, skills and jobs in every region.
  • Help meet the government’s stated commitment to offsite construction.
  • Dramatically increase access to affordable, safe and sustainable homes.

 

The timber industry’s supply chain has the capacity to rapidly ramp up production of houses. E.g. structural timber methods are quicker, cheaper, quieter and more environmentally friendly than traditional onsite methods, having the potential to take the occupier out of fuel poverty.

  1. What specific approaches would help “land” more investment deals for the UK? (e.g., different types of senior engagement, flexibilities in local planning and transport, faster/different approaches to investor queries, better marketing of the UK “offer” – including strengths in innovation).

 

Investors are looking for a reliable market of proven methods and technologies to invest in, the following approaches would help encourage inward investment:

  • Demonstrate that the UK is committed to adopting methods that are well-developed and proven in other countries (refer to Innovation section – Q5).
  • Show greater collaboration with European partners currently leading the way in promoting the use of sustainable materials and constructions methods.

 

The government can encourage investment by:

  • De-risking the investment in innovative technology and long-term projects for the private sector. For example there is currently a lack of clarity over the sustainability of funding, which has meant that developers are cautious about investing in factories, despite the fact that this would be the best way to produce large numbers of low-carbon homes at scale. One challenge the timber industry as a whole has expressed concerns about is the reliability of the government’s pledge to build more homes. In the current political and economic context, the industry has been hesitant to commit to significant expansion without safeguards being put in place to limit the likely risks.
  • Ensure industry is meeting the requirements of the growing number of sustainable and ethical (ESG) investment funds to encourage inward investment in the UK’s low-carbon recovery.

 

Levelling up

  1. What are the key barriers to private sector investment in the regions? Considering how business and government can work to address these.

 

A long-term low-carbon housebuilding programme will fuel a low-carbon economic recovery across the UK by encouraging investment by industry in innovative methods and materials, skills and jobs in every region.

  • The government should step in with consistent pipeline of work in every region, and underwrite it for a 24/36 month period, giving industry the certainty to invest and innovate.
  • Identify clusters of excellence in every region, and expand them throughout the region by focusing on procurement models which prioritise local and sustainable supply-chains. This will also encourage boosting of skills requirements in every region.

 

  1. How can government and businesses work together to identify meaningful opportunities to invest across the Midlands, the North and the Devolved Nations?

 

Answer same as above.

  1. How can government work with business to strengthen local business networks and ecosystems?

 

Commit to a greater collaboration with trade associations and regional business development networks.

  1. What could be the single most meaningful priority for business and government to work towards in order to level up? (e.g. skills, transport, science & innovation, net zero etc).

 

The overriding priority for government should be the commitment to net zero in the form of encouraging the long-term delivery of low-carbon, sustainable and affordable housing.

A government-backed sustainable housebuilding programme will:

  • Fuel a low-carbon economic recovery across the UK by encouraging investment by industry in innovative methods and materials, skills and jobs in every region.
  • Help meet the government’s stated commitment to offsite construction.

 

Local government should incorporate a requirement to employ a minimum number of apprentices and provide a minimum level of training into local planning policy frameworks, ensuring the Further and Higher Education sector has the capacity to service the skills needs.

The timber industry’s supply chain has the capacity to rapidly ramp up production of houses. E.g. structural Timber methods are quicker, cheaper, quieter and more environmentally friendly than traditional onsite methods, having the potential to take the occupier out of fuel poverty.

  1. How can government strengthen the support provided by publicly-funded economic development institutions? (e.g. the role of Mayor led Combined Authorities) Allow organisations to stimulate relationships regionally, giving them greater power to enact their own policies and more autonomy with devolved finance.

 

Green Recovery and Net Zero

  1. Which areas of infrastructure investment should we prioritise for early action to drive economic recovery and support delivery of net zero? (e.g. building energy efficiency and heat, low carbon power, energy systems, electric vehicle infrastructure).

 

The overriding priority for government should be the commitment to net zero in the form of encouraging the long-term delivery of low-carbon, sustainable and affordable housing.

A government-backed sustainable housebuilding programme will:

  • Fuel a low-carbon economic recovery across the UK by encouraging investment by industry in innovative methods and materials, skills and jobs in every region.
  • It will help meet the government’s stated commitment to offsite construction.
  • A focus on net-zero housing delivery will organically stimulate and incentivise investment and improvement in energy and efficiency.

 

The timber industry’s supply chain has the capacity to rapidly ramp up production of houses. E.g. structural timber methods are quicker, cheaper, quieter and more environmentally friendly than traditional onsite methods, having the potential to take the occupier out of fuel poverty.

  1. What action should we take to align investment in the UK and globally with net zero? (e.g. incentives for investment in net zero aligned infrastructure to reduce exposure to unsustainable investments and sectors).

 

  • Incentivise investment in net-zero aligned infrastructure and housing by de-risking the investment in innovative technology and long-term projects for the private sector by committing to long-term pipelines of low-carbon construction projects.
  • Disincentivise unsustainable / high carbon manufacturing via taxes.

 

  1. What are the key regulatory barriers weakening incentives to invest in net zero, and how do we address them?

 

The following barriers hinder and/or disincentivise innovation in the construction industry:

  • Low demand for innovative construction methods due to a lack of a long-term pipeline of work.
  • Lack of certainty over future funding streams for the private sector limits incentives to innovate.
  • No specification of sustainable/low-carbon materials and methods in procurement policy.
  • Lack of safeguards to limit the risk of business committing to research and innovation.
  • Poor availability of skilled labour and training.
  • Risk of policy clashes limiting the use of innovative materials.

 

  1. How can we more effectively support businesses across the economy in acting to access growing low carbon markets and support delivery of net zero? (e.g. innovation support, advice, regulatory barriers).

 

Incorporate ‘social goals’ requirements into procurement policy to ensure the most innovate materials and methods are prioritised e.g. incorporate a preference for using the lowest embodied carbon materials into every planning policy framework.

  1. How do we most effectively enable the UK’s carbon intensive sectors to transition to low/zero emissions while maintaining competitiveness? (e.g. CCUS/hydrogen).

–         Encourage investment in alternative energy infrastructure.

–         Put in place legally binding targets to speed up investment decisions.

–         Place responsibility on government to make sure industry is accountable to targets.

  1. What actions should we take to embed net zero in local and regional economies?

 

  • Implement ‘low-carbon’ preferences in local/regional plans requirements for procurement policy to ensure the most innovate materials and methods are prioritised e.g. incorporating a preference for using the lowest embodied carbon materials into every planning policy framework.
  • Commitments to sustainable construction in planning local policy – for example, the London Borough of Hackney and Powys County Council in Wales both have a ‘timber first’ approach to their planning policies.