UK Chancellor Rachel Reeves has pledged a programme of investment aimed at restoring Britain’s public services, driving innovation and reviving economic growth, as part of a wide-ranging Spending Review.

During her speech, Reeves set out £29 billion for the NHS, £22 billion for science and technology research and development, £2 billion for “home-grown AI” and billions more for infrastructure, skills and defence.

“This is about long-term economic security,” Reeves said, outlining real-terms increases in departmental spending through to 2028-29. “There’s no strong economy without strong public services.”

The NHS will receive a 3% annual real-terms rise in funding, including money for digital transformation and urgent appointments. Reeves also announced £1.2 billion a year for skills training and apprenticeships, and reaffirmed a multi-year commitment to defence, housing and clean energy.

But in an era of constrained public finances, business leaders and sector experts say long-term success will depend on how funds are allocated – and whether foundational reforms are enacted in parallel.

Data and AI to ease NHS pressure

 

Among the most urgent challenges is reducing record NHS waiting times. Reeves’ plan includes funding to improve digital infrastructure and boost GP training, with up to £10 billion earmarked for technology.

Tom Whicher, CEO and co-founder of digital health company DrDoctor, called the NHS package “a welcome step towards improving the NHS for the long haul”.

But he warned that, “for the government to effectively change the public’s relationship with the NHS, it’s critical that some of this investment is allocated to improving interoperability within the system… it’s about ensuring that all platforms managing patient data speak to core functions — like the NHS App — for scaled, consistent access to care across the country.”

Ram Rajaraman, healthcare & life Sciences industry lead at Quantexa, agreed that better data management could unlock value: “Improving data sharing between departments and trusts would save the NHS 140,000 hours of staff time every year… A single patient record will also enable wider innovation that will help improve outcomes and reduce waiting lists.”

Skills and productivity

 

Education and workforce development received a £1.2 billion annual boost to support apprenticeships and tech training — seen as a key plank in the government’s plan to boost productivity.

Daniel Pell, VP & Country Manager for UKI at Workday, said the package was a pragmatic step: “Given the challenging fiscal climate, the Government has had to make tough choices. Improving the productivity of both government and businesses is essential in alleviating the financial pressures facing our public services and ensuring they remain affordable.”

Pell welcomed the focus on AI: “We particularly welcome the new investment in training and apprenticeships, and in the development of AI skills through measures such as the ‘TechFirst’ initiative… which will bring digital skills and AI learning into classrooms and communities.”

Ashleigh Ainsley, co-founder of diversity in tech organisation Colorintech, said investment in skills was vital to supporting underrepresented groups and widening access to high-growth careers: “Building a future-proof workforce means providing people from all walks of life — regardless of gender, ethnicity or background — with the tools, training and opportunity to thrive in a digital economy… The government’s ambition will only succeed if it puts equity at the heart of skills delivery.”

Innovation, IP and regional growth

 

The Spending Review also saw the government commit £22.5 billion over the period to science, technology and innovation, including funding for AI, drug development and battery research. Regional authorities will each receive £500 million to attract and co-fund emerging industries, though legal experts warn that readiness will vary.

“£86bn is coming for science, tech, and innovation. If you’re in healthtech, climate, or deep tech, it’s game on!” said Natalie Knight-Wickens, partner at law firm Spencer West LLP.

“But success hinges on accessible intellectual property protections, adaptive regulatory pathways, and clear public-private co-investment terms… Startups need to know how to protect what they’re building, from ownership of code and data to navigating funding agreements with regional authorities.”

She added: “The opportunity is real, but it’ll favour those who are legally ready… Innovation doesn’t just need funding, it needs foundations.”

Jonny Williams, chief digital adviser for UK public sector at Red Hat, echoed that the promise of technology investment would only materialise with the right underpinnings. “Lasting impact will depend on delivery, and that means building the digital infrastructure, (open) standards and human skills to multiply the impact of local breakthroughs into national success… Open source can be a force multiplier for public R&D investment.”

Energy and electrification

 

Clean energy and transport electrification featured prominently, with £1.4 billion for EV supply chains, £400 million for charging infrastructure, and £14.2 billion for the recently announced nuclear power project, Sizewell C.

Richard Earl, R&D director at EO Charging, welcomed the focus but cautioned that the details matter: “What we need to understand is, how will this investment be distributed? How much will be assigned to the electrification of transport, and how much will be assigned to the upgrade of the national grid?”

“The current network remains insufficient and unevenly distributed, presenting a major barrier to fleet electrification efforts,” he said. “Our customers across the country are committed to transitioning to clean energy… but they can only do this if the UK has the infrastructure that enables them to do so.”

A global innovation role

 

The Spending Review also aims to bolster the UK’s role in clinical research, with funding to enhance domestic R&D in life sciences.

David Harris, CEO and Founder of Cambridge Healthcare Innovations, said the investment “will elevate the UK’s global status in clinical trials and R&D”, and create new opportunities across underexplored treatment areas.

“Bringing together the charity, public and private sectors in this initiative can be a turning point for greater levels of domestic innovation,” he said.

Reeves’s review, the first under the new administration, marks a shift away from austerity-era rhetoric towards investment-led growth. Yet economists warn the real challenge lies in implementation, particularly in how departments coordinate spending, tackle regional disparities and deliver measurable improvements to services.

As Williams of Red Hat put it: “The UK has world-class expertise and research. What’s needed are the national foundations, human and technical, to turn that potential into visible, meaningful outcomes.”

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