Budget 2025 is an opportunity to provide clarity and build momentum behind delivery, but it will be difficult with fiscal headroom tight, manifesto commitments limiting the scope for tax rises, departmental budgets now fixed, and with a volatile international context. Immediate Government priorities will be in bridging the shortfall in government finances, which may further delay the much needed clarity to facilitate sustained investment. The tension between short term fiscal priorities and long term investment has become increasingly clear and must now be resolved through prioritisation, coordination, and a clear-eyed view of what can be achieved.
This means the Budget should be judged not by headline announcements of new policy, but by its capacity to enable delivery, including:
- strengthening local capability
- ligning resources with outcomes
- and translating the government’s clear strategic direction into the detailed plans and practical steps needed to deliver commitments
The government has a limited window to show meaningful progress before the next election, and to make the most of it, Budget 2025 will need to enable tangible progress across key areas.
Using industrial strategy to support business-led growth
The Budget is likely to build on the Spending Review’s emphasis on targeted investment and reform to unlock regional growth. The Industrial Strategy has selected eight growth-driving sectors, and the Budget gives an opportunity to take the actions to support for these sectors to the next level.
A key element will be a policy approach that encourages increased private sector investment. The UK already has a wide range of leading firms -- both SMEs and larger businesses – in each of these sectors. What they need now is stability and clear vision for future growth to support unlock further investment.
Practical programmes such as the Defence Supplier Capability Development Programme and The Crown Estate’s Supply Chain Accelerator exemplify this approach, using bespoke support to strengthen industrial capability and improve supply chain resilience. Autumn Budget 2025 may also set out how the £9.6 billion of additional loans and equity investment announced at the Spending Review will be deployed, including via the British Business Bank and Great British Energy.
The ‘opportunity’ mission is one of five key focus areas for the Government, with skills policy a crucial enabler of economic growth. In 2025, changes to the Growth and Skills Levy have been introduced alongside significant funding to support 1.3 million 16–19-year-olds in accessing high-quality training. Yet uncertainty remains, particularly around potential new levies on international students. Employers will be eager to understand how they can make use of the promised flexibility over apprenticeships in 2026.
Unlocking investment for place-based delivery
We expect the Budget to confirm how government will deploy several multi-year funding settlements that were reserved but not allocated at the Spending Review, to support local delivery.
The £39 billion Affordable Homes Programme is likely to be a headline item, with questions remaining about tenure mix, regional allocations, and whether it will support regeneration alongside new build. If the Government is serious about place-making, this programme must go beyond volume targets to support integrated housing, transport, and infrastructure delivery. Clarity is also needed on how the New Towns programme will be incorporated into this wider strategy.
Transport investment will be central. The Spending Review confirmed £15.6 billion in Transport for City Regions funding for mayoral authorities, and we expect to see progress on plans for these funds being highlighted at Budget. Using them effectively will depend heavily on the capacity and capability of the mayoral authorities, and may require additional support, such as deployment of the National Wealth Fund, the role of NISTA, or use of advisors.
Specific plans for the £616 million allocated to Active Travel England could be set out in a third Cycling and Walking Investment Strategy. Sport England’s expanded Place Partnerships programme illustrates how national investment can be aligned with local need and delivery capability. Following the announcement of 53 new partnerships in February, a further 27 are expected to be confirmed later this year.
In all of these areas, the roles and responsibilities of Mayors and devolved administrations will need to be absolutely clear, given their critical role in place-based delivery.
Strengthening local delivery capacity
Budget 2025 must address the growing tension between national ambitions and the capacity of local authorities to deliver, particularly in areas like housing, transport, skills, and net zero, where rising demand and workforce pressures are straining already limited resources.
This challenge is particularly acute in areas undergoing reorganisation or pursuing devolution deals, where councils implementing structural change simultaneously need to scale up delivery. Without support, reform efforts may stall, not through lack of ambition but because the delivery mechanism is overstretched.
While the Spending Review’s commitment to maintain core funding levels was a necessary first step, Budget 2025 should go further. We need clarity on transitional funding, workforce support, how authorities’ growing SEND debt will be addressed, and the role of regional institutions in coordinating delivery. Responses to the recent Fair Funding consultation should provide a robust evidence base for government decisions.
At the national level, the government must demonstrate its ability to deliver in a coordinated and integrated way across policy areas. The forthcoming Government Digital and AI Roadmap offers an opportunity to modernise service delivery and reduce duplication, but only if it is backed by implementation support at the local level, and clarity about the implications for people.
Similarly, the new planning and performance framework must be designed to enable collaboration across departments and tiers of government, not just to monitor progress.
Time to deliver
The ambitions are well established and the challenges are understood. The time has come for the Chancellor to set out a credible path to renewal. Only by providing clear direction, practical detail, and a realistic plan for delivery can the Government bridge the gap between policy and progress, and demonstrate that meaningful change is truly within reach.
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