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News Release

London

Jones Lang LaSalle’s Reaction to Government Spending Review - Sustainability


London, 21st October 2010 – Commenting on the Government’s Spending Review, Alex Edds, Associate Director in Jones Lang LaSalle’s Energy and Sustainability (ESS) team, said: “We anticipate mixed reactions from the property industry to the announcement that the recycling payment is to be removed from the CRC Energy Efficiency Scheme. 
 
“On the one hand it simplifies an already complicated scheme, but on the other hand, it now represents a far greater financial burden for companies, and goes against the original declaration by the government that the scheme would be revenue neutral. It is anticipated that the contribution to public coffers will be in excess of £1bn by 2014, so clearly it was too tempting for the treasury to let go.”
 
Alex continued: “I would like to see the money ring-fenced for use solely on energy efficiency initiatives, maybe linked in with the newly created Green Investment Bank”.
“The change means there is now a greater incentive to invest in energy efficiency, and those companies who have been taking steps to reduce their carbon footprint will benefit as they will be less exposed to the increased costs they now face. Without the revenue recycling mechanism, the cost of the CRC now represents approximately 5-10% of total energy spend, or a minimum of £35,000 per year during the first phase.”
 
"Landlords may now find it administratively more straightforward to allocate CRC costs to tenants, which could be viewed as a benefit of the changes."
“There is now uncertainty over the purpose of the league table and Early Action Metric, and we welcome further guidance from DECC or the Environment Agency on these issues in particular.”
 
Alex concluded: "The Review also commits over £800m for the Renewable Heat Incentive with an aim to mainstream renewable heat generation systems, £200m to support Britain’s low carbon industry and a refocus of Feed in Tariffs to ensure the best return on investment.”