Take part in our new Family Business Survey and have your say! Click here
Decarbonisation is a huge challenge and it will take a significant effort in the coming years to hit government and EU targets. The case for nuclear is strong and has a great deal of cross party support and public support. Cumbria and the North West can claim to be of international, not just national, importance due to its nuclear history and expertise and it seems that our region is set to flourish as a result.
UK Government’s recent decision to give the go ahead on the Hinkley Point C development in Somerset was welcome news to those in favour of Nuclear. Locally, the most significant project in the pipeline is of course the Moorside project, where the aim is to build a new nuclear power station, to the north and west of the Sellafield site in West Cumbria. The company behind the project is NuGen, a joint venture between Toshiba and ENGIE (formerly GDF Suez) and the plan is to construct, operate and decommission a new nuclear power plant of up to 3.8 GW gross capacity.
NuGen plan to submit a Development Consent Order (DCO) for the proposed build in 2017 and have been carrying out a two stage consultation. A final consultation report will be submitted as part of the DCO application. The consultation will not consider the need for a new plant (covered through the national policy statements) but will be about the site layout, proposals for infrastructure works needed to support the build, environment information and any other issues people may have. We should know the final decision on the application by Q3 2018 and it’s expected that the first of the three new reactors will come on stream by 2025.
Whilst Nuclear presents many opportunities for the region, we need to consider how to maximise those opportunities to make sure the benefits and legacy are felt locally for many years to come. NuGen expects that its approach to localisation will lead to up to 60% of the project being supplied by UK companies. Thinking even more local, Cumbria will need to make sure it’s ready. As part of the drive to raise awareness of the opportunities and challenges, Carlisle will host a Cumbria Nuclear Conference over the 21st – 22nd September 2016, including a dinner at Halston Aparthotel on the 21st and the main event at Carlisle Racecourse the next day. The focus will be on local supply chain, professional services and skills.
Many local people and businesses will have been involved with the consultation by NuGen and The National Grid over recent months, voicing their opinions and concerns, but whatever it throws up, it’s clear there is a real desire to demonstrate the nuclear excellence that already exists in Cumbria. A great example of this being the establishment of a Centre of Nuclear Excellence (or CoNE). It will seek to demonstrate the nuclear excellence that already exists in Cumbria and strengthen its position so that we can attract the brightest and the best, provide people with the right education and skills to serve the sector and provide conditions needed for long term exploration of nuclear technologies by UK companies.
In my own experience, local businesses are well aware of the opportunities and are already gearing up to make the most of them. Some have established businesses and contracts which will see them through to make the most of those new opportunities. Unfortunately, there will also be some in the supply chain who are currently struggling and for whom the new opportunities may come too late. However, the likes of CoNE and the now well established Britain’s Energy Coast Business Cluster (BECBC) are useful drivers in helping our SMEs to make the most of what we have, create more and can also help foster collaboration between local SMEs so they can access contracts they may not otherwise be able to deliver on their own. There are also lots of opportunities provided by local organisations to help businesses better understand and prepare for tendering processes, to help maximise their chances of winning new work.
Of course it goes without saying that high on the agenda for companies in the nuclear industry is innovation. Financing innovation is critical and as well as the usual funding paths two additional routes may be available. Grant funding is often available for all sorts of R&D and in particular the nuclear sector. One example is Innovus, an organisation established to assist Cumbrian businesses in developing new technologies and innovations. Innovus aims to bridge the gap between research and marketable technology by offering access to specialist development facilities, funding and technical and business expertise.
Secondly, the UK tax system offers a very generous tax relief for companies involved in R&D and this can often create such significant savings, or cashback, that it becomes a funding stream in itself. There are a few misconceptions surrounding this tax relief which leads to opportunities being missed. Companies in receipt of grants for R&D can have additional tax relief too, albeit not quite as generous as the SME relief it would have had without the grant funding. Seeking advancement in the nuclear sector and solving uncertainties are more than likely going to qualify for the relief and with good advice on how to make a claim the R&D tax relief system could be a great source of Innovation funding for companies.
Diversification, funding growth, maximising tax reliefs and even compliance work needs careful consideration and planning. Our entrepreneurs are the people who make the difference when it comes to creating jobs and wealth, but it’s also really important to engage with our professional advisors and consultants to make sure we draw out all we can from our plans and ideas. We all have a part to play in making the most of the opportunities and challenges we face and it will be extremely interesting to see where Cumbria finds itself in a few years time.
At Armstrong Watson we work with many Cumbrian businesses at different stages in their business life cycle that are engaged, or plan to engage in the nuclear supply chain. Helping to develop business plans and strategy in order to make the most of opportunities is crucial.
If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW