Yesterday’s Spending Review might not have delivered many surprises, but for the UK’s tech and innovation ecosystem – and our community here in the South West – it confirmed some important priorities: sustained investment in innovation, digital infrastructure, and future-facing skills.
A Signal to Founders – But Outcomes Depend on Delivery
The Chancellor emphasised the importance of giving founders “the chance to innovate, access to finance, and a deep pool of talent” – and that’s exactly what startups in Bristol, Bath and beyond are striving to do every day. While budgets remain tight, significant resources have been ringfenced for tech, AI, and skills. What matters now is whether this reaches communities like ours in a meaningful way.
British Business Bank: A Bigger Role to Play
The expansion of the British Business Bank’s investment capacity to £25.6bn is a notable commitment – and could be transformational if deployed well.
We already work closely with the British Business Bank, and we’re keen to explore how this new funding can go further to support founders and emerging fund managers here in the South West. From deep tech to diverse founder backing, we’ll be pushing to ensure the investment reach and strategic priorities of BBB align with the opportunities in our ecosystem.
With the Industrial Strategy expected later this month, we’ll be looking for clarity on how this growth in scope will be implemented – and how it can benefit local innovation clusters.
R&D Held at “Record High”, But Flat in Real Terms
The £86bn commitment to R&D over the review period is a positive signal, though it represents a freeze in real terms. Still, continued support for ambitious, high-risk R&D through ARIA remains encouraging – and we’ll be urging more South West innovators to tap into these national funding streams.
£2bn for AI – But Let’s Link It Up with Isambard-AI
One of the headline announcements is £2bn to support the AI Action Plan, including a new £750m supercomputer to be built in Edinburgh. That’s welcome, but here in the South West we’re already home to Isambard-AI, based at the National Composites Centre – one of the UK’s most advanced AI-focused compute facilities.
We want to see proper alignment between national infrastructure investments and regional capability. That includes integrating Isambard-AI into the UK’s broader compute strategy, and ensuring it plays a central role in the soon-to-be-announced AI Growth Zones – which we expect will support high-potential AI clusters beyond the capital.
This is a chance to consolidate the South West’s position as a national leader in AI – not just in infrastructure, but in research, commercialisation and adoption.
£10bn for HealthTech and NHS Digitisation
The Department for Health and Social Care has been allocated £10bn for R&D and digitisation, including upgrading the NHS App and digitising patient records. This is the largest R&D investment outside DSIT – and represents a real opportunity for HealthTech companies here to scale, collaborate and help transform the future of healthcare.
£1.2bn for Talent and Skills – A Chance to Build on CyberFirst
The Spending Review confirmed £1.2bn in funding for skills and talent development, including in AI. This includes new scholarships, visa reforms and funding via the Immigration Skills Charge.
Here in the South West, we’ve seen the power of targeted talent programmes through CyberFirst, which we help deliver locally. CyberFirst has successfully introduced hundreds of young people to digital and cyber careers – and with TechFirst set to replace and expand on that model, this is a real opportunity to build on proven success.
We’ll be pushing to ensure TechFirst reflects the needs of our communities – supporting diverse pathways into tech careers and linking up with local employers, training providers and innovators.
ClimateTech: Still Waiting on the Details
The £14bn commitment to nuclear (including Sizewell C and Rolls Royce’s SMR project) dominated the energy section, but broader ClimateTech support remains unclear. With significant innovation around food systems, clean energy and carbon capture taking place across the West of England, we’re keen to see more detail in the forthcoming Industrial Strategy – especially around the £3.5bn DESNZ R&D envelope.
Public Sector Digital Transformation: Opportunity for GovTech
The £3.25bn Transformation Fund, aimed at modernising the public sector’s digital services, could unlock new opportunities for GovTech and CivicTech startups. From improving HMRC’s R&D tax credit processes to smarter cross-government platforms, there’s real scope for regional innovators to engage – if procurement and contracting barriers are addressed.
What Happens Next?
The real test of yesterday’s announcements lies ahead. The Industrial Strategy and AI Growth Zones detail – both expected by the end of June – will shape how these ambitions get translated into action.
Here at TechSPARK, we’ll continue:
- Working with the British Business Bank and others to ensure regional equity in funding
- Advocating for Isambard-AI and our regional AI capacity to be fully integrated into the national compute strategy
- Ensuring the South West plays a leading role in the roll-out of AI Growth Zones, with a focus on skills, infrastructure and commercial opportunity
- Championing the TechFirst rollout as a way to scale up the proven success of our CyberFirst programmes locally
If you’re working in AI, HealthTech, deep tech or digital public services, now is the time to get connected. Let’s make sure our region is not just on the map – but at the heart of the UK’s tech future.
