News & views

25 June 2025

The Government’s 2025 Spending Review, unveiled by Chancellor Rachel Reeves on 11 June 2025, lays the groundwork for long-term economic revival through a new industrial strategy launched at MIRA Technology Park, Leicestershire’s global centre for mobility and automotive innovation.

These twin announcements position Leicestershire, and the UK as a whole, to spearhead advanced manufacturing, green technology, digital innovation and high-value exports.

Key Headlines from the Spending Review

1. Multi-Year Budgets & Capital Spending

• Day-to-day departmental budgets will rise by 2.3% annually, while capital investment grows 3.6% per year through 2029–30 – part of a £725 billion investment plan. This creates vital stability for long-range planning in sectors such as manufacturing, transport and digital infrastructure.

2. Targeted Support for Eight High-Growth Sectors

• The newly launched industrial strategy identifies eight priority sectors – including advanced manufacturing, clean energy, digital & AI, defence, life sciences and creative industries—as economic engines. These sectors receive a £4 billion funding boost to stimulate private-sector growth.

3. Energy Cost Relief for Industry

• Energy-intensive businesses will see higher discounts – up to 90% off network charges – with a British Industrial Competitiveness Scheme launching in 2027 to further relieve electricity costs.

4. R&D, Innovation & Low-Carbon Transition

• Public R&D receives a significant uplift, paving the way for intensified partnerships with industry and academia. Funding mechanisms support clean energy projects and nuclear power developments such as Sizewell C and SMRs.

5. Housing, Infrastructure & Workforce Development

• A new National Housing Bank is set to unlock 500,000 new homes. Alongside transport and digital upgrades, this supports workforce accessibility and business development across Leicestershire.

📍 MIRA Technology Park: The Industrial Strategy Launchpad

The choice to launch the industrial strategy at MIRA Technology Park—a leading hub for automotive, autonomous systems and mobility engineering – highlights Leicestershire’s essential role in the UK’s economic transformation. The event featured high-level briefings, spotlighting plans to:

• Fast-track investment in clean automotive, battery innovation and zero-emission vehicles
• Expand R&D funding for SMEs in advanced engineering
• Develop regional industrial clusters aligned with national strategy

This strategic focus helps anchor cutting-edge investment into local talent, supply chains and facilities.

💷 British Business Bank: A Powerhouse for SME Growth

• The Spending Review significantly strengthens the British Business Bank (BBB) as a core financial tool:
• The BBB’s capacity jumps to £25.6 billion, enabling annual investments of £2.5 billion and drawing in tens of billions of private capital.
• A new £6.6 billion Industrial Strategy Growth Capital fund – part of which allocates £4 billion for the ‘IS-8’ sectors – aims to mobilise up to £16 billion in total capital for high-growth SMEs over the next four years.
• The BBB is now empowered to take equity stakes in startups (up to £60 million per company), supporting potential UK unicorns.
• Its Growth Guarantee Scheme receives an additional £500 million, improving access to loans for small businesses across the UK.
• As directed by government, the BBB’s mandate is being refocused towards the priority ‘IS-8’ sectors – mirroring national strategy aims.

These moves position the BBB as a critical partner for SMEs in Leicestershire, offering capital, growth tools and equity support aligned with key sectors.

💼 What This Means for Local Businesses in Leicestershire

✅ Strategic Advantages

• Long-term planning certainty from multi-year budgets and capital pipelines.
• Sector-specific funding via BBB for advanced manufacturing, clean energy, mobility and R&D initiatives.
• Reduced costs, especially for energy-heavy industries through network-charge discounts.
• Enhanced financing access for high-growth SMEs thanks to equity stakes and guarantees via the BBB.

⚠️ Points to Monitor

• SME reach: Not all small businesses may naturally align with the ‘IS-8’ sectors – support pathways need clarity.
• Rollout: Several initiatives, like energy schemes and BBB programmes, are phased – mixed short-term and long-term benefits.
• Regulatory and tax landscape: Important to track any tax changes and planning requirements emerging from new funding structures.

🏁 Final Take

The 2025 Spending Review, paired with the industrial strategy launch at MIRA, marks a transformative moment for Leicestershire’s business community. The twin pillars of long-term capital, focused R&D investment, clean energy support and strengthened SME finance through the BBB set the stage for sustained regional industrial growth.

But success relies on translating strategy into action. Local businesses should explore:

1. Connecting with BBB programmes – especially Growth Capital and Growth Guarantee Schemes.

2. Engaging with industrial strategy delivery hubs – including those sprouting near MIRA and local innovation partners.

3. Monitoring sector-specific funding calls tied to the ‘IS-8’ agenda.