The 2025 Government Spending Review

12th June 2025

This week’s Chancellor’s Spending Review has the potential for significant investment in many of Reading’s key sectors. The announcements made in relation to resource allocation in key sectors and functions - specifically defence & security agencies, AI, science and technology research and innovation, as well as research and development all should have a direct benefit to Reading and the companies based in the region. REDA's CEO, Nigel Horton-Baker, reflects on the Spending Review and its impact.

At REDA, we are looking forward to the publication of the Invest 2035 Industrial Strategy in the next few weeks, which will set out the focus of these key sectors and the goals to which Reading can work in order to deliver for UKPLC.

Listening to Rachel Reeves this week I couldn’t help thinking that many of her spending proposals really hit the spot. What better place to invest some of those financial packages than in the Greater Reading area? Investing in R+D and our growing defence and AI sectors will ensure we are a world-leader and makes economic sense. Investing based on experience will give the Chancellor a bigger bang for the buck and a larger tax return though business growth to the exchequer. 

It's great to see investment in the Oxford to Cambridge Arc. This will extend the UK’s first ‘Silicon Valley’ along the M4 from Reading into London in a north-eastern arc connecting the Reading city region to the two world-class universities and centres of research in Oxford and Cambridge. Add to this a repeat commitment to the expansion of Heathrow and research intensity in London and this creates a Golden Technology Triangle capable of competing globally.

This year, REDA has joined the Reading Tech Cluster and the Thames Valley AI Hub partnerships which are needed to make the case to government to help our local tech business startups and scaleups win a share of the multi-billion pound budgets being ring-fenced for AI, climate tech and carbon capture and storage technology, as well as the Department of Science, Innovation and Technology’s ten-year research budget and lending by the British Business Bank.

Turning to investment in public services, there are packages for health. It would be nice to see some of it targeted at the crippled Royal Berkshire Hospital (RBH) but sadly RBH has already been relegated to the bottom of a long list and the hospital transition project team at RBH disbanded this month. Arguably, today’s announcement of funds for technological and digital transformation in health would be wasted on a hospital at the end of its shelf life.

The police service can expect more money but police chiefs are arguing it will only cover under-investment and inflation rises. Fortunately, Reading received agreement to a doubling of police officers covering the town centre earlier this year. Being safe and secure, we know, is a top priority for town centre businesses and their employees, so I am confident that Thames Valley Police with REDA’s three town centre business wardens can get on top of shoplifting, violence against women and girls and antisocial behaviour, and especially aggressive begging. Unfortunately, I see nothing in the spending review to support the excellent work of the voluntary sector that supports those that are homeless and sleeping rough.

Reading remains statistically one of the most unequal parts of the country and the affordability of housing remains a barrier to local residents, young people and those in lower income sectors and jobs. This, in turn, creates a shortage of labour for local businesses. The spending review has a £10bn package for affordable housing targeted at social landlords and housing associations. Reducing inequality and creating more social and affordable housing is a priority locally and my hope is that Reading Borough Council will be able to negotiate a favourable package for Homes England to build directly and via social landlords.  

Finally, returning to my opening comment, calling on Government to invest in success to get a bigger return, the Spending Review was full of financial packages for major capital investments, all of which were outside our region and predominantly in the North of England and Wales and while the Oxford to Cambridge Arc was a winner, there was no mention of the much needed Western Rail Link from Slough into Heathrow. 

I am optimistic though that the current plans being set out for local government reorganisation, which will create a strategic authority of around 1.5 million population for our region with an elected mayor, will put Reading on a more equal footing with northern cities. It will allow us to be heard and to receive devolved authority major budgets to spend directly on the issues and challenges we face. If that new strategic authority was to combine Berkshire and Oxfordshire, then being on the same team may make planning an East of Reading River Thames Crossing a reality! This would fulfil the 80-year vision to continue the truncated A3290 beyond Thames Valley Park over the Thames through Oxfordshire joining to the M40, irradicating immediately the traffic congestion issues that is one of Reading’s impediments to economic growth.