Defence and healthcare were big winners in yesterday’s overarching fiscal announcement, but what about the climate crisis?
UK Chancellor Rachel Reeves delivered her 2025 spending review on Wednesday afternoon. The speech promised big things, like an additional £11billion and £600million for security and intelligence services respectively, and an extra £29billion for the NHS.
Both figures are dwarfed by the promise of £113billion set to be spent on infrastructure projects in general, including transport and energy. But this is where things start to get a bit more vague. Both analysts and experts have asked for reassurances climate mitigation and environmental protection will be guaranteed within all new blueprints.
‘The spending plans announced today represent a significant opportunity to deliver differently and ensure climate resilience is built into everything we do. This approach will maximise the benefits for society but achieving that will require a more strategic, systems thinking approach than ever before,’ says Tim Hill,Water & Environment Managing Director for UK & Europe at security and defence specialist, Mott MacDonald.
‘An an example of the change needed, we must move away from projects like sustainable drainage being planned on a site-by-site basis, to a more regional, catchment-level scale to create the biggest benefit in terms of resilience. Investment must be driven by greatest whole life value to society and not just at lowest capital cost,’ they continue.
The Federation of Small Businesses, already on poor terms with the Labour government following National Insurance tax and business rate rises in spring, is similarly cautious in its response. Criticisms include a lack of focus on the business community, and scarce talk of new government contracts, including for the NHS and military, being ringfenced for small British enterprises.
However, Downing Street’s National Digital Exchange – ‘a one-stop-shop’ for public sector procurement – may do something to alleviate those concerns. The marketplace will soon be open to all departments and organisations and uses AI to match requirements with tech suppliers and products at nationally negotiated prices – teams simply pick what they need from the approved catalogue. It’s hoped this could save £1.2billion each year in overcharges for contracts, and see 40% more contracts handed to smaller domestic firms.
Less rosy is the prospect of scant support for energy efficiency improvements amongst small businesses which are still struggling to get on the road to net zero. In comparison, Chancellor Rachel Reeves did confirm that the £13.2billion promised for the Warm Homes Plan will still be available. A drive to deliver tech upgrades to households in a bid to help them use less energy and therefore bring down emissions, this includes more money for the Boiler Upgrade Scheme and grants for insulation installations.
‘Every home we properly insulate is a small victory in an energy war. But it’s more than that. In South Tyneside, we’ve seen the transformative impact of this work on our residents’ lives,’ says Cllr Tracey Dixon, Leader of South Tyneside Council and UK100 Co-President. ‘Looking beyond targets and numbers on a spreadsheet, this is about warm, healthy homes for families who desperately need support. We will continue to push for the investment our communities need, and we’ll keep making the case for climate action that delivers real benefits for local people.’
‘It is fantastic news that Labour has maintained its manifesto commitments to invest £13.2bn in the Warm Homes Plan and £8.3bn in GB Energy, including the Local Power Plan,’ adds Will Walker, UK Policy Lead at the climate solutions charity, Ashden. ‘This gives UK SMEs and supply chains the certainty they need to scale up, upgrading 5 million low-income households while empowering homes and communities to generate and benefit from their own clean, home-grown energy. This means lower bills, reduced emissions, better living standards, and real momentum behind Britain’s economic renewal.’
While making buildings more efficient is clearly an environmental win, campaigners have been less welcoming of proposals to significantly boost the country’s nuclear power infrastructure. Recent revelations about the Environment Agency allowing three tonnes of uranium to be dumped in the River Ribble – a protected site – between 2015 and 2024 have done nothing to make the public more comfortable about the idea of a rapid increase in nuclear waste from new power stations and reactors.
These aren’t the only question marks hanging over nature and the environment, either. This week, Labour dropped a bombshell for housing with a new AI-powered planning assistant, capable of significantly reducing the time it takes to process records. The software can upload around 100 of these per day, in the past a single record could take up to two hours to input manually.
While this is good news for the goal of building 1.5million new homes in this parliament, fast-tracking development at this scale poses risks to already-fragile ecosystems. So, news that Defra’s budget is about to be reduced from £8billion to £7.4billion has triggered even more alarm bells – with the 2.7% cut one of the largest any Whitehall department faces. A fact compounded by the reality that the organisation is already running at just 50% of the budget it had in 2009.
‘The theme of the spending review was clear: security. But did it address the greatest security threat we face, the dual climate and nature crisis? Behind the headlines about a big government spending spree is the risk that investment in nature and biodiversity recovery is undergoing death by a thousand cuts, with Defra’s budget falling,’ says Dr Amy McDonnell, Campaign Director at climate organisation Zero Hour.
‘In a difficult spending period, maintaining the budget for wildlife-friendly farming is a crucial win for nature, wildlife-friendly farmers and the economy. But cuts in Defra’s wider budget mean that every government department must redouble other actions to ensure that critical 2030 nature recovery targets are met,’ adds Richard Benwell, CEO of Wildlife and Countryside Link.
‘Details of regulator funding, set to be decided in the coming weeks, must not leave our watchdogs with a weaker bite,’ he continued. ‘With public money still in short supply, the government must set out in its forthcoming Environmental Improvement Plan how it will strengthen the law to require nature recovery from every Department.’
Image: Micheile Henderson / Unsplash
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