The UK Chancellor set out her multi-year Comprehensive Spending Review, which sets departmental budgets for day-to-day spending until 2028-29, and capital investment budgets until 2029-30, along with the block grants for devolved governments. The Chancellor stated her priorities as investing in Britain’s security, its health, and growing its economy, so working people are better off. There was a key win for our region with the announcement of £750 million for a new supercomputer at the University of Edinburgh, and a re-commitment to our Forth Green Freeport – both key asks from Edinburgh Chamber of Commerce.

With £190bn additional funding allocated to day-to-day spending over the course of Parliament, here are some of the key points in her plans for Government spending over the next few years. As always we are keen to hear from Chamber members to please get in touch with your reactions and feedback.

Defence and security

• Spending will rise to 2.6% of GDP by 2027, with significant investment including for nuclear warheads, munitions, and infrastructure
• The Government has ambitions to make Britain a defence industrial superpower, with the upcoming Defence Industrial Strategy setting out how they will maximise the untapped growth potential of defence, including capitalising on synergies between defence and other priority sectors such as advanced manufacturing and digital and technology

Energy and infrastructure

• The Government is investing in the biggest roll-out of nuclear power for 50 years, with a £30bn commitment to nuclear power, including £2.bn for small modular reactors built by Rolls Royce, and £2.5bn invested in nuclear fusion
• Carbon capture and storage will also receive additional funding, including support for the Acorn project in Aberdeenshire
• The Government is investing £300 million in GB Energy support for offshore wind over the course of the Spending Review period
• The Advanced Fuels Fund will be extended to the end of the Spending Review period to support the production of Sustainable Aviation Fuel in the UK
• £2.6 billion capital investment will go towards decarbonising transport from 2026-27 to 2029-30
• A 10-year infrastructure strategy, along with the modern industrial strategy, will be published in the coming weeks

Business and economy

• To foster innovation, the Government is increasing R&D funding to £22.6 billion per year by 2029-30. This includes:
• £500 million for the new R&D Missions Accelerator Programme, which will leverage a further £1.5 billion of private investment into innovation challenges that support the Government’s missions
• At least £1 billion over the Review period to scale up the Advanced Research and Invention Agency (ARIA), the UK’s high-risk, high-reward research agency
• The launch of a new £410 million Local Innovation Partnerships Fund, giving local leaders – including Local Authorities, researchers, and businesses – a central role in co-creating R&D programmes to support local economies
• Up to £750 million has been promised for a new supercomputer at the University of Edinburgh – this was a key ask of the Chamber’s advocacy ahead of today’s announcements
• £2bn is being allocated to support the existing AI Action Plan, along with Government-funded collaboration between businesses and universities to develop our AI talent, and a new AI Adoption Fund
• Existing local growth investment plans across the UK will be protected, including for Green Freeport’s
• Up to £600 million will be used to launch the world’s first Health Data Research Service, and up to £520 million will fund life sciences manufacturing
• Over £3 billion funding will go towards the advanced manufacturing sector, including zero emission vehicles, batteries, and ultra-low and zero-carbon emission aircraft
• -£2.25 million will be used to continue the Brand Scotland programme, to continue promoting Scotland’s investment opportunities and products around the world
• The Government is also exploring various ways to increase access to high level talent, such as expanding eligibility of the High Potential Individual visa and reviewing the Innovator Founder visa
• The British Business Bank’s total financial capacity will be increased by two thirds to support UK innovative businesses
• Up to £27.8 billion capital will be invested through the National Wealth Fund (NWF), which prioritises investment into the clean energy, digital and technologies, advanced manufacturing, and transport sectors

Other

• There were also a number of spending policies announced that will not apply in Scotland, but are likely to result in additional funding for the Scottish Government, such as: investment for training and upskilling, additional funding for employment support, investment in social housing and insulating homes, extra funding for the justice system, and new regional transport projects
• Through the Barnett Formula, the Spending Review will result in an additional £2.9 billion each year on average for the Scottish Government between 2026-27 and 2028-29
• A new Local Growth Fund will replace the Shared Prosperity Fund, whilst a new Growth Mission Fund will work to expedite local projects that are vital for growth
• The Government is providing funding directly to public sector departments to build strong digital and technology foundations, to modernise public services and improve productivity
• This will include investing up to £10 billion in English NHS technology and digital transformation by 2028-29

Read the British Chambers of Commerce briefing document on the spending review here.