2025 Spending Review: Key Takeaways for Manufacturers
11.06.2025
Chancellor Rachel Reeves has unveiled the UK's first multi-year spending review since 2021.
It sets out Government departments' day-to-day budgets over the next three years, used to pay staff and deliver public services.
It also outlines their investment budgets until the end of the decade to pay for new infrastructure. Below are the key announcements for manufacturers to pay attention to.
The Chancellor announced £15bn for infrastructure projects in England, set to be spent on tram, train and bus projects in mayoral authorities across the Midlands, North and West Country. While £445m has been pledged for rail projects in Wales.
£2.5bn will also be set aside to deliver East-West Rail to support the Oxford-Cambridge Arc area. While £3.5bn will go towards upgrading the Trans-Pennine route, along with funding to progress Northern Powerhouse Rail and the Midlands Rail Hub.
Investment in bus services will help improve businesses’ access to skills, enabling rurally-based younger people, in particular, to reach manufacturing businesses more easily.
Long-term rail projects which create more east-west connections, along with metro expansions in the North and West Midlands, will also help to generate a more equitable share of opportunities.
The Government will increase spending on training and upskilling to £1.2bn per year to support 1.3 million 16-19 year olds into training apprenticeships.
1500 apprenticeships will also be created through the investment in the Sizewell C project.
The British Business Bank’s (BBB) total financial capacity will increase to £25.6bn, supporting a two-thirds increase in support for UK innovative businesses compared to 2025-26.
This expansion will take BBB investments to around £2.5bn each year, enabling funding to continue for programmes like Start-Up Loans and the Nations and Regions Investments Fund.
While £27.8bn capital is set to be invested through the National Wealth Fund, including in advanced manufacturing, clean energy and digital and technologies.
R&D funding will increase to over £22bn per year by the end of the three-year Spending Review period. While £2bn has been pledged for the government's AI Opportunities Action Plan.
Advanced manufacturing is also set to receive more than £3bn R&D and capital funding over the next four years – full details will be revealed in the Industrial Strategy Sector Plan.
Defence spending will rise from 2.3% of GDP to 2.6% by 2027 - an £11bn uplift.
Within that there'll be £4.5bn of investment in munitions made in Glasgow and more than £6bn to upgrade to nuclear submarine production. Businesses operating within the defence industry and related supply chains stand to benefit.
The Chancellor set out a £30bn commitment to nuclear power: with £14.2bn for Sizewell C; £2.5bn for a small modular reactor programme; £2.5bn for fusion; along with funding for specific projects and Great British Energy.
During the Comprehensive Spending Review, it was also confirmed that the Industrial Strategy will publish later this month and that its priorities are “hardwired” into today’s announcements.
Make UK will be using the coming days to continue to engage with Government at the highest levels to make sure the Industrial Strategy and Advanced Manufacturing Sector Plan deliver for members.
Industry will view this statement through the prism of a delicate balancing act the Chancellor is having to perform in the light of tight public finances, a difficult economic environment and, the need to maintain fiscal credibility.
"Within that framework there is a welcome boost for defence, science and technology and, investment in local transport outside London and the South East which is vital if we are to boost growth in the regions where manufacturers are such a crucial part of the economy.
"However, all eyes will now turn to the forthcoming industrial strategy where there is great need and expectation. Industry needs a funded and joined up long term vision as a matter of urgency for stability and investment.
"Critically this must include bold measures to address the UK’s eye watering industrial energy costs and the skills crisis. If the Government delivers on these two issues it would be genuinely game changing for the competitiveness of, and growth prospects for, manufacturers and the economy.
