IET commentary: Spending Review 2025

The Chancellor’s announcements in the Comprehensive Spending Review provide support and investment in key areas for growth and security. We welcome the additional funding to deliver the AI Action Plan, and the confirmation that the Digital and AI roadmap will be published in the Autumn.

This plan and the funding behind it must strategically deliver investment into AI to ensure it is used safely and securely, whilst supporting innovation so that we can begin to maximise the benefits. The £22.5bn-a-year commitment in research and development (R&D) can support the required advancements in AI, sustainable energy technologies and life sciences. This funding is a positive step and government must ensure that this is holistically implemented across the innovation ecosystem.

The Treasury’s commitment of £39bn for social housing is a positive step to boost jobs in the construction sector and drive growth. However, with 80% of existing buildings still set to be in use in 2050, this funding must also be directed to retrofitting the existing housing stock to improve the energy efficiency of existing homes to the required standard. This is critical to reducing the UK’s energy bills and reaching net zero.

Commenting on the investment announced in the Comprehensive Spending Review, Stephanie Baxter, Head of Policy at the Institution of Engineering and Technology, said:

“Today’s announcements must be backed by a long-term workforce strategy to deliver skilled job opportunities across the country. £1.2bn-a-year in training and upskilling funding supports this, but it must be spent smartly to match local skill needs now and in the future.

“The IET Skills Survey 2025 found that the skill engineering employers think will be most crucial to growth over the next five years is innovative thinking, closely followed by technical engineering and specialist digital skills.

“Developing these crucial skills throughout the workforce – in the education system and through reskilling and upskilling existing workers – will be pivotal to delivering on the potential of existing and emerging technologies, whilst ensuring homegrown capability to deliver strength and resilience to meet our 2030 and 2050 sustainability goals.

“We look forward to working closely with the Government on the upcoming 10 year infrastructure strategy and the Industrial strategy later this month.”

ENDS

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