This month, the UK Government delivered their 2025 Spending Review, outlining a cautious but forward-looking economic plan with targeted investments and tight fiscal discipline. With departmental budgets set to rise by just over 2% annually, the Chancellor has targeted to save between £12 and £14 billion to be used for a renewed focus on efficiency, productivity, and long-term sustainability.
Green Economy and Net Zero: Big Investment, Big Opportunity
The Department for Energy Security and Net Zero emerges as a clear winner, receiving the largest proportional funding boost. Over £12.6 billion is being channelled into green innovation, including nuclear power (e.g. Sizewell C), carbon capture and storage (CCUS), and energy efficiency schemes for homes (£13.2 billion).
This creates significant opportunities for BLCC members active in engineering, cleantech, insulation, and sustainable construction. The push toward net zero and the broader green transition may open new partnerships, contracts, and innovation pipelines for EU-UK collaboration.
R&D and Innovation: A Commitment to Future Industries
The government’s £20 billion annual commitment to R&D remains intact, with a new emphasis on cutting-edge sectors like AI, biotech, clean energy, and quantum technology. With cross-border collaboration in science and tech remaining a policy priority, this area holds strong potential for Belgian and Luxembourgish firms looking to partner with UK research institutions or access innovation funding.
Trade and Export Support: Quiet Progress on Post-Brexit Friction
It has been confirmed that the UK will continue to support digitalising trade infrastructure and easing customs processes, critical for small and medium-sized exporters. SME-focused export support schemes will persist, offering practical help for members navigating the UK-EU trade and compliance landscapes.
Infrastructure and Regional Growth: Procurement on the Rise
Over £700 billion is committed to long-term capital spending, including £39 billion for housing delivery, major upgrades to broadband, transport, and flood defences. The “levelling up” strategy also continues, focusing on regional investment beyond London. This could generate procurement and partnership opportunities in construction, urban planning, and professional services.
Skills and Workforce: Education Backed by Industry Needs
There’s a strong focus on technical education and digital skills, particularly in green and high-tech sectors. Funding for apprenticeships, STEM pathways, and training aligned with future industry needs will benefit all sectors involved in education, recruitment, or talent development.
In Summary
The 2025 Spending Review presents notable opportunities for EU-linked businesses, especially in green technology, infrastructure, and innovation. Belgian and Luxembourg companies active in or exporting to the UK stand to benefit from increased demand and funding in these priority areas. However, the outlook isn’t without challenges. Real-terms cuts in departments like Foreign Affairs, Culture, and the Environment, along with ongoing pressure on local government budgets, could impact broader delivery. Ambitious growth projections and complex infrastructure rollouts may also introduce delays or constraints.
You can read the full Spending Review announcement on the UK Government’s website here.