SWNH Reflections: Autumn Budget 2024

Nuclear New Build

The most significant nuclear announcement in the budget was the commitment of £2.7bn to continue Sizewell C’s development through 2025-26. There is a bit of a question whether this is new funding or existing funding from the Sizewell C Development Expenditure (Devex) subsidy scheme. Nonetheless, this commitment enables the continuation of this important national programme. The budget also confirmed the equity raise will be completed in the spring and the Final Investment Decision (FID) will be taken at Phase 2 of the Spending Review, expected late Spring 2025. So while progress remains positive, it is vitally important to have a successful FID to ensure Sizewell C progresses and can support the UK’s net zero and energy security ambitions.

The budget makes short reference to other nuclear new build with the statement: “Great British Nuclear’s Small Modular Reactor [SMR] competition is ongoing and has entered the negotiation phase with shortlisted vendors. Final decisions will be taken in the spring.” The recommitment to the SMR competition on the same timelines is definitely positive, but the lack of reference to Advanced Modular Reactors (AMRs) or specific funding (as in the case for Carbon Capture, Usage and Storage, green hydrogen and solar programmes) suggests nuclear isn’t at the top of the priority list.

It should also be noted that the new Great British Energy will be headquartered in Aberdeen, the UK’s capital of oil and gas which is slowly moving towards the green energies of wind and CCUS, and has received £125m. Presumably this funding will be used for developing implementation strategies rather than directly funding projects, as will be the case of Great British Nuclear.

Existing Nuclear Programmes

The budget did not reference ongoing activities in nuclear decommissioning or geological disposal, but this can be anticipated through the Department of Energy Security and Net Zero budget, which has seen “an annual average real-term growth rate of 22.0% from 2023-24 to 2025-26”.

The budget does state there will be “significant support in 2025-26 for UK fusion energy research” without giving any specifics. Interestingly, this note comes within the Innovation section of the budget, rather than the Net Zero and Clean Energy section. The objective for this budget period suggests a move from innovation into delivery in the fusion space.

The Chancellor did include defence spending in her speech, committing £2.9bn of additional funding to the Ministry of Defence for 2025-26, in addition to the baseline £56.9bn in 2024-25. This funding increase includes funding for the nuclear deterrent and submarine programme. This increase means we can hope to expect further opportunities in skills development, innovation and investment through the supply chain.

Research and Innovation funding

Funding for research and development, and for the higher education sector specifically, was expected to experience significant reductions, but there were some positives within overall cuts. The budget states “the UK’s science base is a crucial national asset” and record levels of government R&D investment up to £20.4 bn. But it also gives the lowest levels of core research funding since the formation of UK Research and Innovation at £6.1bn (this figure doesn’t include Innovate UK funding and you can see annual comparators). While the budget reduces core funding for fundamental research, there is funding to continue association with Horizon Europe and explicit funding for University spin-outs, supporting the Chancellor’s overall narrative of investment for growth.

Notably, the budget states the government will develop 10-year budgets for “key R&D activities”. Could this include nuclear research, for example, the AMR programme? There is only £25m allocated to this plan, with anticipation of significant private sector leverage, but even modest sums of funding over longer periods can stimulate vibrant research communities.

Skills

The budget has no reference to nuclear skills or higher education and universities in the provision of skills. The Chancellor did recognise skills as a national issue and promised to set up Skills England “to ensure we have the highly-trained workforce needed to delivery economic growth” and committed to reform the Apprenticeships Levy into a more flexible Growth and Skills Levy. The outcome of these promises may have a significant impact in our sector, particularly with the increasing importance of apprenticeships in the workforce, and it will be important to engage with any future activities.

Industry strategy

With the limited promises of new support for nuclear, the industrial strategy and its implementation seems more important than ever, and it is important for the sector to represent in the consultation. Among a number of questions, the industrial strategy asks:

1. What are the most important subsectors and technologies that the UK government should focus on and why?
2. What are the UK’s strengths and capabilities in these subsectors?
3. What are the key enablers and barriers to growth in these subsectors and how could the UK government address them?

The nuclear community needs to clearly articulate the benefits of the sector for the UK, highlight our world-leading strengths and provide a clear request for what government support is needed. That way, we can deliver of the promise of the nuclear renaissance, enable 24GW of new nuclear while dealing with our legacy, and help realise net zero and energy security.

If you want to contribute to the South West Nuclear Hub’s response, please get in touch at enquiries@southwestnuclearhub.ac.uk with email subject: “Invest 2035 response”.