*UKHotViewsExtra* Spring Statement prioritises defence technology spending 

Given the government’s commitment to holding just one major fiscal event each year in the autumn, yesterday’s Spring Statement was supposed to have been a minor update. However, the Office for Budget Responsibility (OBR) reduced its real GDP growth forecast to 1% this year (half that forecast in October 2024) and higher debt interest payments coupled with weaker-than-expected receipts removed the small amount of headroom in the government’s ‘non-negotiable’ fiscal stability rule. Against the uncertain backdrop of stagnating domestic output, falling business confidence, rising geopolitical uncertainty, and persistent inflation, Chancellor Rachel Reeves was forced to take more significant action.

To restore balance to the current budget by 2029-30, the Chancellor announced a set of policies to reduce borrowing, largely comprising health and disability benefit reforms, changes to the composition of departmental funding, and new measures to collect unpaid taxes.

Key technology announcements included the introduction of a £3.25bn Transformation Fund, which is intended to support the reform of public services and realise the potential for digital technology. However, a significant focus of yesterday’s announcement concerned an increase in defence funding and an ambition to turn the country into “a defence industrial superpower”. This includes £400m of ringfenced funding for UK Defence Innovation (UKDI), which is intended to “enable innovative technology to rapidly progress from idea to the front line to secure competitive advantage”.

In this HotViewsExtra article we look at the key announcements in yesterday’s Spring Statement and implications for tech suppliers.  

TechMarketView subscribers, including UKHotViews Premium subscribers, can read ‘Spring Statement prioritises defence technology spending’ here. If you aren't a subscriber—or aren't sure if your organisation has a corporate subscription—please contact Belinda Tewson to find out more.
 

Posted by Dale Peters at '10:09' - Tagged: defence   funding   policy   government   AI   budget   productivity   spring+statement