With a new Labour government at the helm, all eyes are on the UK’s 2025 spending review to understand where public spends are due to be allocated over the next 3 years.
Just this week, Chancellor Rachel Reeves announced her plan for boosting investment in key sectors like healthcare, social housing, clean energy, defence and AI.
And after 14 years of spending under the Conservative UK government, which resulted in a “22bn fiscal black hole”, this new review promised a reallocation of public service budgets to boost “Britain’s renewal”.
But it’s not a coincidence that this review in particular has been so closely watched. After the country has seen a number of tax increases, many are wondering how Reeves plans to lighten the load on British tax payers, whilst also providing good public services.
What Has The 2025 Spending Review Announced?
In short, the spending review announced many boosts and cuts, including:
- A 3% real-term boost for the NHS each year, alongside £10bn for digital upgrades.
- £39bn for social housing.
- 500,000 more free school meals.
- £2.4bn for new school constructions.
- A rise in defence spending.
- £11.5bn increase for energy security.
- Cuts for government departments, including the Home Office, Foreign Office and Environment.
- £2bn to deliver the government’s ‘opportunities action plan’ for AI.
- £750m for a new supercomputer at Edinburgh uni.
So how are UK business leaders reading to this review? To find out, we asked them directly. Here’s what they had to say:
Our Experts
- Anna Brailsford, CEO at Code First Girls
- Scott Bridgen, General Manager, Risk and Audit at Diligent
- Greg Hanson, Group Vice President and Head of EMEA North at Informatica
- Kyle Hill, CTO at ANS
- Mike Maddison, CEO at NCC Group
- Steve Salvin, CEO and Founder at Aiimi
- Lee Edwards, VP EMEA at Amplitude
- Vivek Behl, VP Strategy at WalkMe
- Andrei Danescu, CEO and Co-Founder at Dexory
- Kate Hayward, UK Managing Director at Xero
- Anton Roe, CEO at MHR
- Akhil Tripathi, Co-Founder at Excite OSA
- Paul Christie, CEO and Co-Founder at Tachmed
- Liz Scott MBE, Executive Director at Turing Innovation Catalyst Manchester
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Anna Brailsford, CEO, Code First Girls
“This is a pivotal moment for the UK’s digital economy. The £2 billion commitment to AI shows that the government is serious about harnessing technology to drive innovation and growth – but to make it a success, we must ensure the benefits are inclusive.
“AI can only solve the ‘diverse and daunting challenges’ Rachel Reeves speaks of if the people building it reflect the diversity of the society it serves. That means investing not just in AI infrastructure, but in AI talent – from every background, at every stage of their career.
“At Code First Girls, we’ve already helped thousands of women reskill into tech and AI, but there’s more to do. We urge government to work with organisations like ours to ensure this funding unlocks opportunity for underrepresented groups, closes the digital skills gap, and puts social mobility at the heart of the UK’s AI strategy.”
Scott Bridgen, General Manager, Risk and Audit at Diligent
“The UK Government’s Spending Review marks a shift toward significant increases in capital spending over the next four years, with an £86bn investment in science and technology planned to take place by the end of this parliament. As part of the £2bn of investment in ‘home-grown’ AI, Keir Starmer has pledged an extra £1bn of funding for upscaling computational power and AI infrastructure, with the bold aim to turn the UK into an AI superpower.
“While the government’s embrace of AI will be welcomed by many businesses eager to harness its benefits, the increase in AI adoption should be met with enhanced regulatory efforts. Additional considerations must be made to further protect data privacy, combat inaccuracies, misinformation and AI hallucinations, as well as ensure human oversight of all AI output.
“Despite the enthusiasm of many businesses for AI adoption, the lack of uniformity in compliance and regulation has led to lapses in oversight that may have serious future consequences. For instance, research from McKinsey reveals only 27% of respondent businesses review all AI-produced content before it’s deployed. With this increase in spending, the government has the opportunity to not only advance its AI capabilities, but also to champion AI risk management – setting the example for ethical and responsible use across industries.”
Greg Hanson, Group Vice President and Head of EMEA North at Informatica
“The £2 billion investment in the AI Action Plan has great potential to drive growth in the UK economy, transform the public sector and propel the country to a leading position in the global AI race.
“But the real challenge lies ahead. Getting ahead in AI isn’t solely about acquiring and deploying technology. It’s about cultivating a workforce with deep AI knowledge and skills. If the UK doesn’t have the right skillset, valuable insights will be left undiscovered and productivity gains remain elusive.
“Many organisations are in the early stages of building AI readiness and preparing their data for AI. Moving too quickly, without establishing the right foundations, skills, and culture, could result in long-term setbacks rather than sustainable success.”
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Kyle Hill, CTO of ANS
“The Labour Government’s £2 billion investment into the UK’s AI Action Plan is a bold but essential step towards making Britain a global AI powerhouse. As the AI race speeds up, putting the UK on the map as an AI leader will require both financial backing and business support for adoption.
“With 27% of UK firms held back on AI adoption by a lack of expertise, we must address the AI skills gap now. Investment must go hand-in-hand with training. The Government’s TechFirst programme will lead on training in the classroom, but support for businesses to upskill their current workforces will be key to ensuring AI is adopted safely and securely.
“We must embrace AI in a sustainable, responsible, and considerable way to put the UK at the top of the AI leaderboard.”
ENDS
Mike Maddison, CEO at NCC Group
“Today’s spending review marks an important step in the UK’s digital future – and for those of us on the frontlines of cyber resilience. The renewed commitment to sovereign digital defence capabilities, underpinned by the Strategic Defence Review and investments in CyberEM Command, signals a clear recognition that national security is inseparable from digital security.
“We particularly welcome the expected reforms to how departments invest in technology – tackling legacy systems and embedding digital expertise into the heart of public service reform. This is long overdue, and essential to building a resilient, responsive state.
“Cyber resilience is the bedrock of this future. We’re pleased to see cyber security recognised as a strategic priority – but we’d like to see more targeted support for the mid-sized cyber firms that form the backbone of the UK’s cyber defence capability. These companies are agile, innovative, and deeply embedded in the fabric of our national resilience.”
Steve Salvin, CEO and Founder at Aiimi
“For tech leaders, today’s Spending Review presents a tantalising opportunity for the UK regions. Not only was £2bn announced for an AI Action Plan – a very welcome commitment from a Government that clearly sees the long-term value in making the UK a power player in this space – but there were also a range of infrastructure and training announcements that will help drive success for tech and AI adoption outside of London.
“Big spending commitments for skills, apprenticeships, and rail connections – including the much needed East-West rail line – will help regional towns and cities to boost talent, connectivity and skills. These are all vital components needed to create thriving AI and tech hubs across the nation. As an AI company proudly based in Milton Keynes, this is exactly what’s needed to drive the country towards a future where the benefits of tech adoption are widely felt.”
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Lee Edwards, VP EMEA at Amplitude
“The recent departures of Wise and now Alphawave are the latest signs that the UK urgently needs to rethink how it supports and scales its tech ecosystem. London has incredible talent and ambition, but too often lacks the depth of capital markets, investor appetite, and scale up support that founders find in other places, such as New York. Without a competitive public markets environment and the right incentives to keep innovation here, we risk becoming a stepping stone rather than a destination.
“The LSE still works well for more traditional sectors, but tech companies need a different kind of environment. It’s not just about policy, banks, pension funds, and institutional investors also have a critical role to play in backing emerging tech companies and creating a more vibrant, long term investment environment.
“The UK has a proud history of entrepreneurship and now we need the full financial system working together to ensure it has a future too.”
Vivek Behl, VP Strategy at WalkMe
“It’s great that the government is investing in developing AI skills, but our research reveals a stark disconnect between ambition and reality. The government and businesses expect Gen Z to embrace AI at work, but many of them feel overwhelmed, anxious, and unsupported. For employers, there is a risk that AI will become a source of stress, rather than a driver of productivity – and the government’s investment in AI skills will go to waste.
“To realise the benefits AI can bring, organisations need to know exactly how employees are using AI – and any problems they run into. Without this insight, leaders can’t provide the support people need to succeed. Rather than layering complexity across multiple apps, businesses should focus on delivering a seamless, unified experience. Unless businesses focus on ‘digital adoption’ of AI tools in the workplace, the government’s AI Action Plan will not deliver the long-term economic impact it is expecting.
Andrei Danescu, CEO and Co-Founder at Dexory
“The £86bn investment in science and tech is a bold headline, but if we want real results, it must be directed toward real builders. The UK needs targeted support for deep-tech companies that are scaling hardware, AI, and robotics in the real world – not just more grants for policy labs or spin-outs that never leave the prototype stage. Industrial strength comes from commercial deployment, not just R&D.
“More money alone won’t fix the system. The cost of building a deep-tech business in the UK is rising, and we need action on energy costs, regulatory delays, and talent barriers. Founders need less red tape and more room to operate.
“Finally, if we’re serious about global leadership, we need to match the ambition of other nations. That means tax breaks, loans, and subsidies that help de-risk bold bets. Right now, the UK isn’t competing on incentives, and talent and capital are following the path of least resistance. This package is a start, but delivery is everything.”
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Kate Hayward, UK Managing Director at Xero
“Small businesses will still feel like they are operating without the full picture after today’s Spending Review. They have waited a long time for more clarity on the support that could help, so many will be disappointed.
“Small businesses, who are already nervous about future tax hikes, can’t afford for more delays. It’s crucial the government gives them the stability and confidence to encourage investment and growth. The detail in the Small Business and Modern Industrial strategies can’t come soon enough.”
Greg Hanson, Group Vice President and Head of EMEA North at Informatica
“The £2 billion investment in the AI Action Plan has great potential to drive growth in the UK economy, transform the public sector and propel the country to a leading position in the global AI race.
“But the real challenge lies ahead. Getting ahead in AI isn’t solely about acquiring and deploying technology. It’s about cultivating a workforce with deep AI knowledge and skills. If the UK doesn’t have the right skillset, valuable insights will be left undiscovered and productivity gains remain elusive.
“Many organisations are in the early stages of building AI readiness and preparing their data for AI. Moving too quickly, without establishing the right foundations, skills, and culture, could result in long-term setbacks rather than sustainable success.”
Anton Roe, CEO at MHR
“Today’s £2 billion investment in AI and £1.2 billion for skills training is welcome, but the journey to boost business growth is still only just beginning. The government must now create the right environment for innovation and growth to ensure the Prime Minister’s ambition to make the UK an “AI maker and not an AI taker” becomes a reality. Business productivity, an engine of national growth, still isn’t centre stage in the government’s priorities despite businesses shouldering higher taxes to support public spending.
“With the latest ONS figures showing rising unemployment and falling job vacancies, it’s clear that uncertainty is holding back crucial business investment and hiring. Now is the moment for bold, targeted action to support businesses in adopting AI and upskilling their workforce. This isn’t just about surviving today, it’s about preparing for a future where the government has said AI will touch the day-to-day lives of 10 million workers.
“Government funding needs to be paired with policies that provide businesses with the skills and confidence to innovate. That’s how we’ll reduce the number of people not in education, employment, or training and unlock high performance across the UK economy.
“Looking ahead to the Autumn Budget, businesses will need economic strategies and tax policies that underpin, not undermine, their investment and growth ambitions to achieve this.”
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Akhil Tripathi, Co-Founder at Excite OSA
“This £86bn investment marks a pivotal moment for the UK’s science and technology sector. Targeting research in critical areas like drug development and energy storage is essential not only for long-term economic growth but also for strengthening the UK’s position as a global innovation leader. The commitment to regional funding and local decision-making is particularly encouraging—it has the potential to unlock talent and innovation beyond traditional hubs, driving more inclusive and balanced growth across the country. It will be crucial, however, to ensure that the funding mechanisms are transparent and aligned with real-world outcomes”
Paul Christie, CEO and Co-Founder at Tachmed
“Rachel Reeve’s spending review provides a welcome if modest boost on previous allocations. However, if the UK is to remain a prominent global tech hub the government must go further and provide targeted tax incentives to help cultivate a domestic venture capital sector that’s truly fit for purpose. Its current focus is too narrow, risk averse, and rarely results in developing national champions, being too focussed on university spinouts rather than cutting-edge, high risk, high reward, start-ups. A clear shift toward supporting smart, private sector-led innovation is urgently required, especially at the critical stage between R&D and market entry, where capital is hardest to secure. That’s where early-stage investment can deliver the greatest multiplier effect.”
Liz Scott MBE, Executive Director at Turing Innovation Catalyst Manchester
“The government’s £2bn backing of the UK’s AI Opportunities Action Plan, announced during the Chancellor’s Spending Review yesterday, is a significant and timely investment that recognises the transformative potential of AI to drive economic growth, tackle complex societal challenges, and deliver high-value jobs.
“Alongside our partners, we’re proud to be leading efforts to position Greater Manchester as a hub for AI excellence – supporting startups and scaleups to drive responsible innovation, and fostering strong collaborations between academia, industry, and the public sector.
“This commitment from government is what the UK’s innovation economy needs to compete on a global scale, and what regional ecosystems need to thrive. Greater Manchester has all the ingredients to lead the UK’s AI revolution – an outstanding community of innovators and entrepreneurs, world-class universities, a talent pool of over 13,500 people working in AI, and a public sector willing to back it all the way.
“With the right support, we can ensure that these strengths translate into meaningful impact – not just for the region, but for the UK as a whole. I look forward to seeing how this commitment to the AI Opportunities Action Plan develops and the benefit it brings.”
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