Government reforms set to drive growth in BEMS sector in 2025

In less than 12 months in power, the Labour government has already suggested and implemented significant reforms and regulatory changes that are set to have a major impact on the building energy management systems (BEMS) sector. These changes underscore the importance of industry leaders working alongside Westminster officials to shape policy moving forward.

For years, decarbonisation and the journey towards net zero has been at the top of government agenda. The Labour Party has continued that trend and one of the biggest decarbonisation announcements of its Autumn Budget in October 2024 was the confirmation of the total funding envelope for the Public Sector Decarbonisation Scheme (PSDS).

This initiative is aimed at providing grants to public sector bodies to fund heat decarbonisation and energy efficiency measures.

In the Budget, the Chancellor confirmed more than £1 billion of central government funding will be available for Phase 4 of the PSDS. Additionally, a further £163 million would be given to the Industrial Energy Transformation Fund over the next three years. As the two primary policy schemes providing funding for building controls, this confirmation is encouraging news for the sector.

Similarly, the government’s commitment to the reform of planning rules to stimulate new building projects should have indirect benefits for the building controls and automation industry – thanks to the increased number of new buildings being constructed. Of course, many of these will be fitted with building controls.

While the government is still finalising its approach to commercial building decarbonisation, the Budget suggests that decarbonisation is a major priority – with more funding being committed for domestic retrofit than under the previous administration.

Supporting the future of the industry through apprenticeships

Skills and training are also high on the government’s agenda. Highlighting a low number of apprentices, Labour announced a plan in its 2024 General Election Manifesto to replace the Apprenticeship Levy with a new Growth and Skills Levy and transform Further Education colleges into specialist Technical Excellence Colleges, while also establishing Skills England to bring together businesses, training providers, and government.

While progress on these reforms has been slow, these changes should represent a positive step forward for the building controls industry.

Indeed, Skills England looks set to revitalise training initiatives, with government officials keen to coordinate with employers and training providers to ensure training programmes are closely aligned with the needs of the industry.

With that in mind, apprenticeship schemes, such as the BEMS Controls Engineer Level 4 apprenticeship, and T-Levels, will play a vital role in helping employers recruit and train young talent.

Significant sustainability reforms

2025 looks set to be a major year for sustainability, with the government’s plans to introduce the Future Homes and Buildings Standard later this year.

When the previous government consulted on plans for the Future Buildings Standard, these did not include a mandatory requirement for building controls to be installed in all new buildings. The Building Controls Industry Association (BCIA) responded to these consultations, arguing that controls installations should be mandated through the standard – as is the case in the EU through the Energy Performance of Buildings Directive.

The finalised standards have not yet been revealed, but even if they don’t require mandatory controls installations, the proposed strict energy efficiency and carbon targets are still welcome. As such, many building developers will look to install building controls to help them comply with these standards.

The regulatory framework will also see significant reforms made to Energy Performance Certificates (EPCs). With amendments long overdue, it is welcome news for the building controls and automation sector. In particular, the potential reduction of the validity period of EPCs will increase the number of trigger points for building upgrades and the opportunity for more installations of BEMS.

The Labour government has made no secret of its valuation of the clean energy sector, identifying it as a major growth market and promising to ‘Make Britain a clean energy superpower’ as one of its five missions for government. As a result, it has promised significant investment in clean energy technologies. This represents a major opportunity for the building controls and automation sector, with BEMS being an innovative, decarbonisation technology with huge export potential.

The importance of close collaboration

With policy extremely important to the non-domestic buildings sector and the majority of the market influenced by policy in one way or another, working alongside the government is critical to ensure favourable policy change for building controls. Doing so will enable BCIA members and building controls businesses to sell more into the significant policy-driven market.

As policy development within government often takes an evidence-based approach, having access to the latest available evidence can make a key difference. Working closely with the government will give the BCIA the best opportunity to highlight the importance of building controls and display the key evidence needed to advocate for favourable policy change.

Indeed, conversations with key civil servants have revealed greater evidence on the benefits of building controls is needed for them to consider favourable policy changes. With that in mind, the BCIA is developing a technical paper based on extensive data and analysis to prove the performance benefits of building controls to government.

By arming the government with the information it needs to start shaping positive policy on building controls, the BCIA hopes to achieve a significant increase in the volume of building controls installations and substantial growth within the BEMS sector.

In addition to raising awareness among building owners, property developers, and the wider construction industry on the multitude of benefits of achieving this ambition, it’s also important that a large, skilled workforce is encouraged and nurtured to support the sector’s growth.

Indeed, a proactive and collaborative approach between key industry leaders and policy makers on shared issues and challenges, such as the current skills shortage, is absolutely vital for the flourishment of the building controls and automation sector.