UK 2025 Spending Review Marks Ambitious Shift Toward Clean Energy, Infrastructure, and Innovation
The UK government has unveiled its 2025 Spending Review, signalling a significant shift in fiscal strategy focused on long-term investment in energy, infrastructure, and technology. Chancellor Rachel Reeves announced a 2.3% annual increase in departmental spending above inflation, aiming to drive what she calls “Britain’s renewal” , a plan to deliver meaningful improvements in public services, economic resilience, and environmental sustainability.
A key highlight of the review is a strong commitment to clean energy. The government will invest £14.2 billion in Sizewell C, the UK’s first state-backed nuclear power station in over three decades. Additional funding includes £2.5 billion each for the development of Small Modular Reactors and nuclear fusion, and £9.4 billion for carbon capture, usage, and storage (CCUS). A further £2.6 billion will support the decarbonisation of transport, with £1.4 billion specifically targeting the continued rollout of electric vehicles and supporting infrastructure.
Transport infrastructure is also set for transformation, with £15.6 billion allocated through the new Transport for City Regions (TCR) fund, empowering metro mayors with long-term, flexible investment to improve regional connectivity. A forthcoming 10-Year Infrastructure Strategy, expected later this month, will outline how major projects will be delivered with greater efficiency and certainty.
The review also outlines a £1.2 billion investment in digital transformation across public services, particularly within the NHS. The goal is to modernise operations, improve cybersecurity, and enhance the efficiency of service delivery through the integration of AI and digital systems. Research and development receives substantial backing as well, with annual funding set to reach £22.6 billion by 2030 £15.2 billion of which is earmarked for science, innovation, and technology initiatives.
Industry leaders have largely welcomed the scale and ambition of the Spending Review. However, business groups such as Logistics UK have urged the government to ensure that new investments do not result in increased tax burdens for SMEs and logistics firms, which are already under financial strain. Concerns were echoed by the opposition, with Shadow Chancellor Mel Stride criticising the government’s approach as fiscally unsustainable without a clear revenue plan.
Despite the political debate, the Spending Review represents a decisive step towards a more resilient, future-facing UK economy. With large-scale commitments to clean power, infrastructure modernisation, and digital innovation, the government is positioning itself for long-term transformation though the effectiveness of these plans will ultimately depend on execution, delivery, and sustained economic stability.
