“Invest, invest, invest” – that was the rallying cry of Rachel Reeves’ Autumn budget today. The first budget of the new Labour government, and the first budget delivered by a woman as Chancellor of the Exchequer in British history.
With so much announced across the hour-long speech, we’ve summarised the headlines across some key sectors – and gotten the reaction of some sector experts on what the announcements mean:
Education
- VAT on private school fees from Jan 2025. And remove business rate relief from April 2025.
- Tripling investment in breakfast clubs.
- Increasing core schools budget by 2.3bn to hire teachers. (This equates to £72,000 per school)
- 300m allocated for further education.
- 1bn uplift in funding for Special Educational Needs – representing a 6% increase.
- 6.7bn capital in investment in the Department of Education – representing a 9% increase – inc. 1.4bn to rebuild schools.
- 2.1bn to improve school maintenance. 300m increase on this year.
Expert reaction – Education
It certainly looks like a good day for the education sector, but there will need to be some good planning and allocation of the funding announced to ensure it has the biggest possible impact.
The Chancellor’s decision to increase the budget for schools by £2.3 billion and allocate £1 billion specifically to SEND funding were big wins, and very welcome for education in the UK. However, it is important that this additional funding is used to directly improve educational outcomes, and not absorbed by the announced increase in employer National Insurance contributions.
Equally, I agree with the government that SEND needs an overhaul – so hopefully the money that has been announced will be used wisely and not used to prop up something that’s not working.
Post-16 education is an area that is in desperate need of funding, so the smaller £300m committed to further education is a slight concern. Hopefully, some of the broader allocated schools budget funding will find its way here.
So much of successful learning is about the environment in which we learn, so the decision to triple funding for breakfast clubs is a welcome investment in supporting our young learners. As any educator knows, hungry children cannot learn effectively. And the government’s commitment to contributing over £1.4bn to rebuilding 500 schools “in greatest need” is major and long-awaited. Prioritising the most urgent infrastructure needs will be essential, as sadly too many schools still struggle with issues like RAAC. Students and staff deserve a safe and conducive learning environments.
Built Environment
- A £500 million boost to the Affordable Homes Programme for 2025/26 – to build up to 5,000 additional affordable homes.
- £1 billion to extend the Household Support Fund and Discretionary Housing Payments in 2025-26.
- £3 billion of additional support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, to support the private housing market.
- £46 million of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities.
- £50 million of new spending to expedite the planning process, including for Nationally Significant Infrastructure Projects.
Expert reaction – Built Environment
This was a budget where I think Labour got more right than wrong. There were some clever political narrative wins in the un-freezing of tax thresholds, and clear wins in the change to Right to Buy, which will reduce the discounts that are given and allow providers and Local Authorities to keep 100% of receipts. Government also made very clear that it has a focus on housing delivery being about affordable housing, and it is this that they think needs delivering first and foremost.
Elsewhere was more of a mixed bag. While there are some gains narratively in the un-freezing of tax thresholds for Labour’s core base, the rise in employers National Insurance will impact everyone. I also feel there was a big failure to refocus Local Authority financing on multi-year settlements, especially when they’re thinking this way elsewhere – for example, social housing providers getting clarity about affordable rent rises across this parliament.
The announcement of more money in key sectors will be welcomed. But how that money will be used differently matters, too, and sometimes detail on that was scarce. Throwing more money at failing approaches won’t necessarily solve things: what’s needed now is what government will change about how it is used so it makes more difference.
Energy
- The government is increasing the rate of the Energy Profits Levy (EPL) from 35% to 38% – seeing oil and gas companies contribute more to energy transition.
- Establishing Great British Energy with £125 million in 2025‑26.
- Providing £3.9 billion of funding in 2025‑26 for Carbon Capture, Usage and Storage Track-1 projects to decarbonise industry and support flexible power generation.
- £2.7 billion of funding to continue Sizewell C’s development through 2025-26.
- The government will provide support for the first round of electrolytic hydrogen production contracts, harnessing renewable energy to decarbonise industry across the length and breadth of the UK.
- 11 new green hydrogen projects across England, Scotland and Wales. These will be the first of commercial scale in the world.
- Delivering hundreds of local energy schemes to help decarbonise the public estate through the Public Sector Decarbonisation Scheme, with over £1 billion of funding over three years.
- Committing an initial £3.4 billion towards heat decarbonisation and household energy efficiency over the next three years, as part of the Warm Homes Plan.
Expert reaction – Energy
Overall, the Chancellor has announced a good spread of money across a range of low and zero carbon initiatives. It’s really good to see the Warm Homes Plan get off the ground – this is something that many think has been lacking in the UK for years, noting the poor performance of our homes compared to our European friends.
The other winners are Carbon Capture, Usage and Storage (CCUS) and hydrogen, with 11 new commercial scale green hydrogen projects announced. The confidence in these industries is welcomed as part of the Net Zero jigsaw, and it seems the Chancellor is setting out her stall not only for the UK to take a leading role in these industries, but to create jobs in areas in need of more employment. But, with an nascent market and lack of commercial scale projects (at least in the UK) this is a significant announcement and could prove a gamble. Let’s hope the backing pays off in the long-term and significantly helps us reach our climate change goals.
Another vital aspect of developing the next generation of low carbon industry is ensuring our ports are ready to help the deployment of offshore wind and floating offshore wind turbines. The commitment of £134million to assist ports in developing their infrastructure is welcomed to help get these enormous structures deployed and ultimately on-line.
Finally, it will be interesting to see what the £125million allotted to Great British Energy will be used for and how this new organisation will develop to, in the government’s own words, “drive the UK’s clean energy transition”. The scale and costs of offshore wind development are significant, with CAPEX costs per project in the many billions.
The money allotted is small compared to the continued investment in Sizewell C announced of £2.7 billion for 2025/26. Hopefully, this money for GB Energy will be increased in future years but there seems to be some tight fiscal control initially. Let’s hope for some early and well thought out strategic successes for GB Energy with more money available in future years.”
Looking to capitalise on the Budget announcements? See how our team can help your comms, marketing or content efforts on our Education, Built Environment and Energy & Sustainability pages.