The UK government has signaled its most ambitious commitment yet to technology-led growth, unveiling a sweeping package of funding and reforms in its 2025 Spending Review. A centerpiece of the announcement is a record £22bn annual public R&D investment target by 2029-30 and the launch of a £2bn Artificial Intelligence Action Plan, to be managed by the Department for Science, Innovation and Technology. This marks the first time the Artificial Intelligence plan has been given an explicit funding envelope, underlining the government’s urgency in scaling responsible Artificial Intelligence adoption in critical industries such as manufacturing, health, and defence.
Public sector technology is poised for transformation through a £10bn uplift in NHS digital funding, a £500m digitalisation initiative at HMRC, and expanded support for key digital infrastructure projects, including the GOV.UK App and Wallet. Notably, the British Business Bank’s capitalisation is set to rise to £25.6bn, further fueling business investment in innovation. The review also earmarks £4bn for defence autonomous systems and a £50m digital transformation fund to boost regional government capabilities. A further £100m will go towards digitising England’s planning system, with new government hubs planned in York, Manchester, and Darlington as part of an ongoing regional jobs strategy.
Industry bodies largely welcomed this pivot towards applied innovation and public sector automation but cautioned that delivery frameworks and regulatory clarity remain unresolved. ADS Group and Make UK praised the increased backing for Artificial Intelligence, ARIA, and DSIT, while urging action on energy, workforce skills, and long-term strategy. EngineeringUK highlighted the potential for job creation through £113bn in capital projects alongside new funds for training and apprenticeships, but flagged enduring gaps in STEM education and diversity access. Legal and business commentators noted the positive intent behind increased scale-up funding and government adoption, even as they voiced concerns over execution and the need for Artificial Intelligence regulations, SME automation incentives, and a replacement for the ´Made Smarter´ scheme.
The spending package reflects a clear strategic bet on science, technology, and innovation as levers for UK economic revival. However, stakeholders warn that successful impact will hinge on forthcoming industrial strategies, regulatory roadmaps, and procurement reform—particularly for high-risk and smaller sector players. Delivery, not just ambition, is set to dominate the next phase as the robotics and automation sector focuses on adoption frameworks, workforce readiness, and the translation of fiscal promises into market realities.
