The UK Spending Review 2025 builds on the Autumn 2024 Budget and Spring Statement 2025, announcing significant new investments in public services by the year-old Labour government.

This review represents a substantial commitment to the future of the UK, with billions of pounds earmarked for transformative projects; a significant boost to the construction industry, a technological revolution in defence and healthcare, and a major push towards net-zero initiatives.

We break down the key commitments by market and review what the opportunities might be for public sector suppliers.

Note that some figures represent multi-year commitments, while others are annual; detailed information on individual program allocations is available in the full Spending Review 2025 policy paper.

🛡️| Defence, Borders & National Security

• A substantial £15 bn has been committed over this parliamentary term for a sovereign warhead programme. The ripple effect will be strongly felt throughout the nuclear technology sector, boosting suppliers involved in materials science, engineering, and advanced security and defence systems.
• Over £4 bn will be invested in autonomous systems, with £2 bn of this representing new investment this Parliament. Expect keen competition for contracts among companies specialising in UAV technology, AI-driven systems, and related military support services.
• As trailed in the Spring Statement, £6 bn has been earmarked for munitions throughout this Parliament, including £1.5 bn for establishing an ‘always on’ pipeline and at least six new energetics and munitions factories. This will translate into substantial opportunities for businesses involved in the production of explosives, propellants, and munitions components, along with a significant boost for construction firms building the new factories.
• At least £7 bn will be invested this Parliament in a once-in-a-generation renewal programme for military accommodation. This significant investment will create several opportunities for construction companies, architects, and suppliers of building materials and related services specialising in military housing projects.
• Almost £1 bn in new funding has been allocated this Parliament for a European laser-directed energy weapon. This will likely catapult companies involved in advanced laser technology and related defence system support services to the forefront of innovation and contract awards.
• A real terms increase of £600 m has been allocated to the budgets of the UK’s intelligence agencies throughout the Spending Review period. Expect a surge in contracts for technology companies specialising in cybersecurity, data analytics, and cutting-edge surveillance equipment.
• Up to an additional £280 m in annual RDEL will be provided in 2028-29 to the Border Security Command. This injection of funds should see a significant boost for companies supplying maritime surveillance technology, advanced border control systems, and specialist security personnel training programs.
• £200 m to accelerate the transformation of the asylum system, clearing the asylum backlog and generating in £1 billion annual savings from ending hotel accommodation for asylum seekers.

🏠 | Housing

• £39 bn has been committed to a 10-year Affordable Homes Programme. This massive investment will likely trigger significant uplift in the construction industry, benefiting construction companies, housing associations, architects, and suppliers of building materials.
• Close to an additional £10 bn will be provided in financial investments, primarily channelled through Homes England. This will act as a powerful catalyst for private sector investment in housing development, leading to substantial growth for the construction companies who secure the resulting contracts.
• As part of these investments, £4.8 bn in financial transactions will be invested from 2026-27 to 2029-30 to catalyse private investment in house building. This significant stimulus will directly benefit developers, construction companies, and their extensive supply chains.

🚧 | Transport & Infrastructure

• £25.3 bn to support the reset of HS2 and progress delivery from Birmingham Curzon Street to London Euston, tackling longstanding delivery challenges.
• A total of £15.6 bn will be invested by 2031-32 through the new Transport for City Regions (TCR) settlements. This significant investment will create a surge of activity and opportunity for construction firms, engineering companies, and suppliers of transport infrastructure across the regions.
• First mentioned in the Autumn 2024 Budget, £3.5 bn has been allocated for the Transpennine Route Upgrade. This commitment will benefit railway construction and engineering companies throughout the North of England and their suppliers of materials and equipment.
• £2.5 bn will be dedicated to the continued development of the East-West rail line. This will provide long-term opportunities for railway construction and engineering companies, and their suppliers.
• £445 m has been committed over the next ten years to upgrade railways in Wales. This will be a welcome boost for railway construction and maintenance companies operating in Wales, and their supply chains for materials and equipment.

🏥 | Healthcare

• A significant £29 bn real terms increase (£53 billion cash increase) in annual NHS day-to-day spending has been announced. This substantial increase will undoubtedly invigorate the entire healthcare supply chain, including healthcare providers, pharmaceutical companies, medical equipment suppliers, and digital health solution providers.
• The Department of Health and Social Care (DHSC) will receive a £2.3 bn real terms increase (£4 billion cash increase) in its annual capital budgets. This funding will fuel a wave of contracts for construction firms, medical technology companies, and businesses specialising in cutting-edge hospital equipment and infrastructure.
• £10 bn committed to modernise NHS technology infrastructure. This will benefit IT companies supplying digital health solutions.

🎓 | Education & Young People

• A £2 bn real terms increase in the schools budget is planned. This will translate into a significant boost for staffing, but also for suppliers of educational materials, technology companies offering educational software, and other relevant suppliers.
• The School Rebuilding Programme will receive an ongoing investment of approximately £2.4 bn annually. This sustained investment will provide a pipeline of attractive contracts for construction companies, architects, and suppliers of school building materials for years to come.
• £1.2 bn a year to support over a million young people in securing training and apprenticeships. This funding will benefit training providers and apprenticeship employers.
• Over £560 m for children’s social care transformation including overhauling the children’s homes estate. This funding will support social care providers, fostering agencies, relevant training providers and construction firms.
• £410 m  annually by 2028-29 to expand free school meals. This funding will directly support schools and foodservice suppliers.
• An additional £400 m per year  to address the aging school estate. This funding will be a boost for construction firms involved in school maintenance and repair.
• £370 m over four years for school-based nurseries. This will benefit childcare providers, construction companies building new facilities and suppliers of early years educational equipment.
• £132.5 m of dormant assets to support disadvantaged young people’s access to music, sport, and drama. This will potentially benefit various community organisations.

⚡ | Energy & Net Zero:

• A £30 bn commitment has been made to the development and implementation of a comprehensive plan for nuclear power. This commitment will be transformative for the nuclear power industry and its extensive supply chain, creating numerous opportunities and stimulating growth across the sector.
• £14.2 bn for Sizewell C nuclear power station. This will benefit nuclear engineering and construction companies, and their supply chains.
• Over £2.5 bn for Small Modular Reactors. This will stimulate the development of this emerging technology and boost related engineering and manufacturing firms, with Rolls Royce SMR announced as the government’s preferred bidder to partner with Great British Energy.
• £2.5 bn for nuclear fusion technology including the world-leading fusion plant in Nottinghamshire. This funding will be vital for research institutions and related technology suppliers.
• £13.2 bn between 2025-26 and 2029-30 for the Warm Homes Plan. This will benefit energy efficiency companies, insulation providers, and firms offering energy advice and support services.
• £9.4 bn by 2029 for Carbon Capture, Usage, and Storage. This funding will create significant opportunities for businesses involved in carbon capture technologies.

⚖️ | Justice & Policing

• A total of £7 bn will be invested to fund the creation of 14,000 new prison places. This significant undertaking will likely lead to substantial contracts for construction companies, security system providers, and businesses supplying equipment and services to prisons.
• Up to £700 m per year will be allocated to reform the probation system. This will create a wealth of opportunities for rehabilitation service providers, training organisations, and technology companies offering offender monitoring and support systems.
• More than £2 bn in increased funding to bolster police spending power. This funding will support police forces across the country.

🏛️ |  Local Government

• £3.4 bn of additional grant funding to local government in 2028-29. The positive impact of this funding will be widespread, likely benefiting, for example, social care agencies, construction firms, highways suppliers, waste collection and processing firms, and a broad range of other local service providers.

💰| Revenue collection

• £1.7 bn will be invested over four years to fund additional compliance staff for HMRC. This will translate into a significant boost for recruitment agencies and training providers specialising in compliance and debt management.
• £500 m in additional investment has been allocated to HMRC’s digital services. This modernisation drive will create new opportunities for IT companies specialising in tax and compliance software, along with those offering digital transformation services to government.
• £50 m from the Transformation Fund to increase workforce productivity across the civil service. This will benefit training providers, and educational institutions.

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