EiB’s Business Development Director, James Trotter, joined the House of Commons gallery on Wednesday 28th October as the Chancellor delivered the Budget, providing additional perspective to the headlines.
Energy investment opens a wider supply-chain opportunity
The Gwyndod SMR project signals the scale and supply-chain focus of the UK’s nuclear ambitions. Great British Energy – Nuclear has already awarded almost £900 million in supply-chain contracts, with more than 70% going to UK-registered companies. The Government also committed to Sizewell C, alongside carbon capture and hydrogen projects in Teesside, Merseyside and North Wales. This is supported by a further £2 billion for the National Wealth Fund’s Energy Wealth Fund, targeted at renewable and low carbon energy infrastructure. The opportunities are broader than energy generation itself, with projects requiring engineering, grid connections, and enabling work.
The AI ambition
The Budget provides an additional £80 million for Sovereign AI’s R&D Procurement Scheme, designed to give AI companies opportunities to develop solutions for the NHS and Civil Service. The Chancellor acknowledged AI growth will create physical infrastructure requirements. A new British Data Centre Covenant was announced and will link government support for strategically important data centres with expectations around local investment, employment and the protection of water resources.
Housing is another clear investment priority
The Government announced an additional £1.5 billion to deliver around 10,000 social and affordable homes in England. This takes planned investment through the Social and Affordable Homes Programme to more than £40 billion over 10 years. The Budget also extends preferential Public Works Loan Board borrowing for local authorities building council homes and introduces VAT relief on land sold to registered social housing providers. Together, the announcements point to a substantial pipeline of housing development, with councils and social housing providers playing a central role in delivery.
Defence: greater ambition, but uncertainty remains
Defence entered the Budget as an area where industry was looking for greater certainty. The Government confirmed funding for the Defence Investment Plan, but stopped short of setting out the longer-term spending path. The route towards the UK’s 3.5% NATO commitment by 2035 will be determined through the next Spending Review. The Budget also confirms that the National Wealth Fund and British Business Bank can deploy up to £5 billion over four years into defence, dual-use technologies and other sectors supporting national security and sovereign capability.
For the defence supply chain, the picture remains mixed. Existing programmes have greater funding certainty, but the scale and timing of the next phase of defence investment remain unclear. Suppliers therefore have greater visibility of current priorities but will need to wait for the Spending Review for a clearer view of the longer-term pipeline and potential opportunities.
Devolution puts investment decisions closer to place
The government’s Fiscal Devolution Roadmap gives regional and local leaders greater control over investment, backed by £285 million and plans for a £1.5 billion borrowing facility for Mayoral Strategic Authorities.
The Budget accounts for tangible projects across the country. These include £10 million for Bristol Temple Quarter, future financing options for the West London Orbital and Bakerloo Line Extension. In Wales, £30 million will progress Cardiff Parkway railway station, alongside £11 million for the Port Talbot Aberavon Bridge. A new station at Bradford Interchange and a further £200 million for Leeds Station has also been allocated.
As more funding and decision-making moves towards mayors, Combined Authorities and local government, businesses will need to follow regional pipelines and understand local priorities around transport, housing, regeneration, skills and growth. The ability of authorities to combine devolved funding with private investment could also become increasingly important to how regional infrastructure programmes progress.
Procurement as a policy mechanism
Public procurement will increasingly favour UK businesses and strategic sectors including shipbuilding, AI and energy infrastructure. A new definition of a ‘UK supplier’ was announced as part of a ‘buy British’ initiative. Large government infrastructure and construction projects will also target at least 3% apprenticeships, demonstrating how procurement is being used to connect infrastructure investment with employment and skills outcomes.
Government is also using procurement to stimulate innovation, including £80 million for Sovereign AI’s R&D Procurement Scheme and a £138 million Procurement Catalyst covering quantum sensing and positioning, navigation and timing.