The Review signals a shift in how the government intends to deliver on its priorities, with a stronger emphasis on capital investment, accelerated digital transformation, and renewed focus on public sector efficiency and productivity. While largely concentrated on public service delivery, the Review also carries important implications for employers. The government’s ambitions around technology, skills, regional growth, and workforce reform are set to shape the wider labour market, informing regulatory efforts, and shifting expectations around the role of employers in navigating change. Below we consider five areas for employers to assess in the context of developing future-focussed workforce strategies.

Digital capacity as a core competence

The Review allocates over £1.9bn to the Department for Science, Innovation and Technology to advance digital priorities and a further £2bn for AI adoption in the public sector and the NHS. Alongside this, it projects one in ten civil servants to be in digital roles by 2030.

These efforts reflect changing expectations beyond the public sector around how work is structured and decisions are made in a digital environment: digital fluency is no longer seen as a feature of technical roles alone, but is becoming, and must generally become, a baseline expectation across the wider workforce, including among managers and senior leaders. At the same time, this move signals a growing focus on developing systems, services and processes that prioritise accessibility and are tailored to the real-world needs of both employees and end users.

The Review therefore raises the standard for digital capability across all sectors. Employers should anticipate growing pressure to invest more in tech-enabled ways of working.

Yet, these shifts won’t be purely operational. They demand new, data-informed leadership and management styles. As public services become more tech-driven and automated, the bar will rise for private organisations to demonstrate not only technical competence, but also accountability, transparency, and any human impact in the use of technology. In practice, this will mean reviewing digital skill strategies across all levels of the organisation, anticipating future regulatory initiatives on responsible AI and data governance, and ensuring that digital transformation is positioned as a people-centred, cross-functional effort that engages HR, legal, and employees from the outset.

The skills equation: a shared mandate

As workplace transformation gathers pace, the strategic challenge is not merely limited to systems and leadership, but includes equipping the wider workforce with the skills to match.

The Review responds to this by committing £1.2bn annually by 2029 for apprenticeships and training, coupled with the introduction of a strategic workforce plan for the civil service. These efforts stem from a core assumption: as the way we work continues to evolve, the future will require a continuously learning workforce.

However, the government will not be the sole stakeholder in fuelling this transformation. Employers will be increasingly expected to co-invest in skills development as a shared obligation in a changing labour market. In this context, the Chancellor’s pivot away from funding short-term interventions and towards longer-term workforce strategies clearly signals a clear rebalancing of responsibilities: public funding may still provide the foundations, but businesses will be expected to follow suit, aligning their training and upskilling programmes with future workforce needs, and engaging more proactively in shaping the skills ecosystem. This also means preparing for a policy environment in which public funding is increasingly tied to demonstrable outcomes. Employers should anticipate more targeted incentives, including support linked to specific skill priorities and measurable progression.

The Review signals a clear political will for the government to lead the charge in treating workforce investment as a strategic asset. Civil service reform is being designed around self-sufficiency, resilience, and long-term capability-building, including efforts to reduce the use of external consultants and expand internal learning provision. For large organisations facing similar challenges, this approach may well become a valuable point of reference.

Net-zero readiness and workforce strategy

One of the salient features of the Review is its emphasis on sustainability and net-zero targets, with over £14bn committed to clean energy infrastructure, £13.2bn to domestic energy efficiency, and £2.6bn to decarbonisation projects. Yet, while the government’s ambitions and investment signals are strong, the Review offers scant detail on how these commitments will be matched by coordinated workforce planning and transformation.

For employers, this creates both a strategic opportunity and a pressure point. In sectors directly impacted, such as construction, energy, manufacturing, and logistics, the demand for green skills is set to rise sharply. Meeting the need of roles in green engineering, clean tech deployment, and environmental compliance will require accelerated recruitment and reskilling strategies.

At the same time, the Review’s implications extend beyond the green economy. Legal, HR, and strategy functions will be expected to adapt to emerging climate-linked obligations. As net-zero policies move to the centre of both regulatory debates and reputational landscapes, employers will need to embed green transition thinking into both workforce and operational strategies. Those that prepare early will be better positioned to meet these changing expectations, secure greater public sector opportunities, and attract climate-conscious talent.

Devolution and workforce strategy

Location-based investment is one of the driving forces of the Review, with £240m allocated to a new Growth Mission Fund, £15.6bn committed to city-region transport settlements, and long-term devolved funding confirmed for mayors and combined authorities.

For employers, the government’s strategy sends two clear signals. First, it demonstrates that labour markets are becoming more localised, and increasingly shaped by specific regional industrial strategies, demographic patterns, and infrastructure contexts. Second, it shows that debates about workforce strategy are inseparable from the social infrastructures that shape it, highlighting a political will to treat community empowerment not as mere aftereffect of investment, but as a critical precondition for inclusive growth and long-term workforce resilience.

However, these dynamics will play out unevenly across the UK, placing pressures on employers operating across multiple locations to anticipate divergences in local workforce policy, regulation, and expectations. Meanwhile, for those with stronger local roots, this shift opens up new opportunities to collaborate with public agencies in fostering workforce innovation and inclusion. As devolved authorities are expected to take on a more active role in regional planning, they are likely to look to employers as strategic partners in devising labour market interventions and building employment landscapes that respond to community needs.

Managing risks: inclusion and readiness

While it sets out an ambitious programme of investment and reform, the Review also leaves several questions unanswered, particularly around workforce readiness and inclusion. For example, while it positions digital transformation as a central policy priority, it offers little indication of how digital exclusion might be mitigated. Similarly, it promises significant efficiency gains via the widespread adoption of AI-powered systems, but the nature and scope of the support made available to those whose roles might be displaced are still largely nebulous. And even with significant investment at both central and regional levels, the capacity of local training systems and labour infrastructures to deliver at pace is far from guaranteed.

For employers, it reinforces the need for ongoing and long-term investment in people, culture, and organisational readiness to better support structural and technological transformations, while ensuring their long-term sustainability.

This is because, as transformation efforts gather speed, the risk is not just uneven implementation, but uneven impact. Without purposeful, people-centred strategies, organisations may find themselves accelerating change while leaving parts of their workforce behind. Those that place inclusion, wellbeing, and workforce sustainability at the heart of their approach will ultimately be better placed to build long-term resilience, retain trust, and drive meaningful change.

Conclusion

Beyond headline spending, the Review sets out a blueprint for how the government envisions the future of public services, economic renewal, and workforce transformation.

Nowhere is this shift better illustrated than in the reform agenda it outlines for the civil service. Championing self-sufficiency, innovative efficiency targets, streamlined workforce planning, as well as stronger digital and leadership capability, the government is unambiguously treating public sector modernisation not as a cost-cutting exercise, but as a model for long-term betterment and agility.

Many of the challenges underpinning the proposed civil service overhaul, such as outdated systems, talent pressures, digital transition, and the balance of productivity and wellbeing, are long-standing concerns for employers across the economy. From this perspective, the Review is a sign of convergence, with the public sector increasingly addressing the lessons that its private counterpart has been wrestling with for years.

What is changing, however, is the public visibility and the policy codification of these reforms. As the government reshapes its own workforce, it inevitably contributes to redefining societal expectations around inclusion, skills, growth, and, overall, around what ‘good work’ should look like. For employers, particularly those competing for public contracts, reputation-sensitive clients, or shared employee pools, this will create pressure to align with novel, future-facing, standards.

Ultimately, the 2025 Spending Review should serve not just as a framework for policy analysis or a signal of what’s to come, but as a concrete prompt for employers to reflect, reimagine, and recommit to workforce strategies that can thrive in the coming years.

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