The UK Treasury is reportedly considering a reduction in the funding allocated to GB Energy, a publicly-owned company established by the Labour government to spearhead the nation’s clean energy goals. According to a report by the Financial Times, this decision could be part of a broader re-evaluation of government spending during June’s spending review.
GB Energy, which was promised £8.3 billion in taxpayer funding over the five-year parliamentary term, has seen uncertainty around its financial support as ministers assess whether they can afford the full commitment. A “zero-based review” of government spending is currently underway, with officials questioning whether certain priorities remain viable, the Financial Times reported.
In October’s Budget, GB Energy was allocated £100 million to cover the initial two years of its operations. However, sources close to the matter indicated that the pressure on government finances, combined with an increasing focus on defence spending, has led to doubts about the long-term funding commitment. One option reportedly being considered is a reduction in the £3.3 billion initially earmarked for GB Energy’s low-interest loans, which are intended to support local authorities in financing projects such as rooftop solar panels and shared-ownership wind farms.
Neither the Treasury nor the Department for Energy Security and Net Zero has confirmed whether GB Energy will still receive the full £8.3 billion as initially planned.
Industry experts have expressed concerns over the role of GB Energy in the UK’s transition to low-carbon energy, particularly as offshore wind projects are already attracting substantial private sector investment. The report also highlighted the growing uncertainty regarding the company’s contribution to the nation’s clean energy rollout.
A government spokesperson emphasized its ongoing support for GB Energy, stating, “We are fully committed to GB Energy, which is at the heart of our mission to make Britain a clean energy superpower and to ensure homes are cheaper and cleaner to run.
Despite this commitment, the future of the company’s funding remains uncertain as the Treasury evaluates the nation’s financial priorities in the face of mounting pressures.
