Spending Review 2025: What we want to see


In the coming days, Chancellor Rachel Reeves will unveil the UK's first multi-year Spending Review since 2021, and the first ‘zero-based’ review since 2007, marking a pivotal moment for the government as it sets departmental spending budgets through to 2029.  

With public services under strain, a £22 billion budget gap, and limited fiscal headroom, Reeves faces the daunting task of balancing stability with reform, and fiscal responsibility with the need to invest over the long term for growth. Finding sufficient funds to fund the UK's planned military expansion, along with the budget required to meet each of the Government’s five missions, will come at the expense of other departmental budgets.  

Despite the tough outlook, Reeves and Prime Minister Keir Starmer are loathe to admit returning to anything resembling austerity, and both seek to develop better links with industry than their predecessors. Ahead of this crucial moment, techUK sets out its five key asks of the Government.  

1. Stability 

Like many business organisations, we want to see more certainty and stability built into the Government’s fiscal planning. Reeves approach to date has consistently left her with little-to-no room for manoeuvre, with just £9.9 billion in headroom at both the 2024 Autumn Budget and Spring Statement. This leaves the Chancellor’s fiscal planning at the whim of even a slight disruption – tariffs, anyone? - and means that intervention is required at every fiscal event to drag us back into the black.  

Setting a larger amount fiscal headroom would make the Chancellor’s plans more resilient to global or domestic shocks and give businesses more confidence that they can plan effectively without having to worry about tax rises, tweaks, or other tinkering every six months. 

2. Taxation 

In a techUK/Public First survey in February 2025, 42% of senior tech business leaders cited the high levels of business taxation as one of the largest barriers to growth, an increase of 12% on the year before.  

While business understands the difficult environment the Government is operating within, we need our tax system to support growth, not hinder it. Without economic growth to raise profits, increase tax revenues, and spur new entrants to the market, the Government will find itself limited to taxing an ever-growing proportion of an ever-shrinking whole.  

3. Tech-enabled savings  

The cuts we already know to be included in the review will have been a difficult pill for many departments and Ministers to swallow, who must now find significant savings across their estates. The tech sector has a key role to play in helping Government find these efficiency savings, whether that is through addressing outdated, expensive legacy IT or by implementing new AI tools and assistants to automate standard tasks, Government can use tech effectively to not only cut spending, but increase outcomes.  

A Social Market Foundation study found that 8.12 million hours, equivalent to 4,300 working years, could be saved simply by streamlining caseloads at DWP and HMRC alone through the use of AI and automation procedures.  

4. Energy 

High energy prices remain a drain on consumers, businesses and public spending alike. If the UK is to stand any chance at growth, the Government must act to bring down these prohibitively high barriers. Increasing the total supply will also enable new developments in technology, AI, and other energy intensive industries.  

5. Prioritisation 

The message of the Spending Review has been clear, and it is one of a Government with finite resources making difficult decisions in an uncertain global climate. Faced with this, Government cannot do everything. The forthcoming Industrial Strategy is intended to act first and foremost as a prioritisation exercise, identifying eight key sectors that have the most potential to drive growth.  

Within this however, we want to see clear signposting from Government as to which areas – whether that is specific subsectors, use cases, or others – that it sees the UK as holding a key advantage. Business stands ready to respond and deliver, but only with a clear blueprint from Government can we work together to drive forward. 


Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Tess Newton

Team Assistant, Policy and Public Affairs, techUK

Margherita Certo

Margherita Certo

Head of Press and Media, techUK

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Antony Walker

Antony Walker

Deputy CEO, techUK

Alice Campbell

Alice Campbell

Head of Public Affairs, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Regulation, techUK

Audre Verseckaite

Audre Verseckaite

Senior Policy Manager, Data & AI, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

Daniella Bennett Remington

Daniella Bennett Remington

Policy Manager - Digital Regulation, techUK

Oliver Alderson

Oliver Alderson

Junior Policy Manager, techUK

Tess Newton

Team Assistant, Policy and Public Affairs, techUK

 

 

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