Following our initial budget review last week, we’ve investigated the details and spending commitments and set out below the key opportunities.
The Winners
The Budget reflects strong commitments to investment in the energy, local transport, and education sectors, with these areas receiving a significant and much-needed boost in funding.
Energy and Environment
- £6 billion earmarked for expanding offshore wind capacity
- £3.9bn for carbon capture, usage, and storage (CCUS) and green hydrogen projects.
- £3.4 billion for Warm Homes Plan to deliver energy efficiency upgrades for 350,000 homes
- £2.7bn to continue the development of the Sizewell C nuclear power station in 2025/26
- £2.4 billion over two years to build new flood defences and maintain existing assets
- £200 million for rollout of electric vehicle charge points
Local Transport
- Additional funds to fix potholes – £500 million in 2024-25 investment for road maintenance, up to £1.6 billion.
- City Transport Settlements – £1.3bn for urban transport schemes including Sheffield Supertram renewal; building the West Yorkshire Mass transit, and the new Liverpool Baltic railway station
- Active Travel – £100 million for cycling and walking infrastructure in 2025-26
Schools
- £6.7 billion of capital funding in 2025-26 for England, a real terms increase of 19% includes:
- £1.4 billion for the school rebuilding programme, an increase of £550 million on this year. Plans for 100 projects to begin delivery across England next year
- £2 billion into maintenance for schools
- £950 million for skills capital
Netural
The industry widely welcomed the commitment to these three strategic rail rail programs (TransPennine Route Upgrade, High Speed 2 link between Old Oak Common and Euston Station, and the East-West Rail link from Oxford to Cambridge. Many unresolved issues remain, such as the lack of funding for Northern Powerhouse Rail projects and uncertainty over whether funds from the HS2 Phase 2 cancellation will be redirected to projects identified within the previous government’s Network North plans. So this budget could be seen as scaling back of ambition—or perhaps an injection of realism. Further details are anticipated in Phase 2 of the Spending Review, scheduled for Spring 2025.
In addition, only £1 billion has been allocated to capital spending on health so far, but this is part of a larger £22.6 billion injection into the NHS, there could be additional funding to come in Phase 2.
The Rest
Digital
- £500 million in 2025-26 to deliver Project Gigabit and Shared Rural Network to drive the rollout of digital infrastructure
Housing
- £500 million for Affordable Homes Programme to increase social and affordable housebuilding
- £56 million to unlock over 2,000 new homes at Liverpool Central Docks, along with
- £25 million investment in a new joint venture to deliver 3,000 energy-efficient new homes across the country, 100% of these being affordable
Prisons
- £2.3 billion of investment in prison expansion over 2024-25 and 2025-26
- £220 million investment in prison and probation service maintenance in 2024-25
- £300 million in 2025-26 to keep prisons safe and secure
The 10-year infrastructure strategy published with the spending review in spring 2025 will set a bigger picture for the level of investment in infrastructure moving forward and the new National Infrastructure and Service Transformation Authority will be operational spring 2025.
Finally, the creation of the new Office for Value for Money (OVfM) brings focus on ‘rooting out waste and inefficiency’ and scrutinising investment proposals to ensure they offer value for money. We expect to see this further reflected in procurement moving forward.
What’s Next?
Over the coming weeks, we’ll be sharing hints and tips to help you make the most of the budget-created opportunities through bidding.
Stay tuned and if you have any questions in the meantime, feel free to book a call with me.
