Government Spending Review 2025
12 Jun 2025
Over the last year, the government has taken action to fix the foundations of the economy, put the public finances on a sustainable path, and support growth. At the Budget last autumn, the government set out a clear fiscal strategy which included fundamentally reforming the fiscal framework by changing the government’s approach to spending to support transparency, certainty and stability, and introducing new, non‑negotiable fiscal rules. The government has now confirmed its plans for spending within the totals set out at the Spring Statement.
Top line analysis relevant to the agri-food sector include;
- There will be a budget of £17m allocated in 26/27 and a further £9m in 27/28 to transform Defra's Arm's Length Bodies
- Environment, Food and Rural Affairs budget will be cut by 15% from 25/26 to 29/30 from £1.05bn to £962m
- Home Office budget will be cut by 15% in the same period from £482m to £441m
- Energy Security & Net Zero budget will be cut by 15% from £425m to £387m
- Business & Trade budget will be cut by 15% from £487 to £424
- Cabinet Office budget will be cut by 16% from £514m to £464m
- Small & Independent Bodies budget will be cut by 25% from £582m to £468m
Energy security and climate resilience
The government is fully committed to meeting its legally binding carbon budgets and to reaching net zero by 2050, and this SR supports that. The government will set out further details in its Carbon Budget and Growth Delivery Plan in October, including its plans to decarbonise industry.
The government is also investing in climate adaptation and the natural environment to increase the UK’s resilience to the effects of climate change and to protect the ecosystems that underpin the economy and food security. This includes investing more than £2.7 billion a year in sustainable farming and nature’s recovery until 2028‑29.
Small & Independent Bodies
The FSA yearly budget will remain static at £117.2m from 25/26 to 28/29
Science & Technology
The Department for Science, Innovation and Technology (DSIT) settlement provides total DEL funding of £16.5 billion in 2028‑29. This is equivalent to an annual average real terms growth rate of 2.8% over SR25.
This includes increased research and development (R&D) funding, reaching £15.2 billion per year by 2029‑30. This funding will flow to the world-leading scientists and innovators in UK businesses, universities, and R&D institutions across the UK.
Artificial intelligence
At this SR, the government is allocating £2 billion for artificial intellgence (AI) from 2026-27 to 2029-30, fully delivering on the government’s commitment to harness the transformative potential of AI, as set out in the AI Opportunities Action Plan.