The Comprehensive Spending Review (CSR) delivered by Chancellor Rachel Reeves earlier this week arrives at a time of global economic uncertainty and when the nation desperately needs growth.
As I’ve said many times in the past, entrepreneurs and small businesses should be at the heart of government but support for this critical part of the economy has often been patchy, slow, and inconsistent by governments of all political colours.
And whilst this latest spending review does offer some promising signals for the 海角视频’s entrepreneurial ecosystem, there are also contradictions that undermine its credibility.
On the surface, there is a clear narrative that this government sees investment rather than austerity as the way forward. The numbers are notable with a £120bn uplift in capital spending to be spread across infrastructure, energy, digital transformation and research.
The British Business Bank will also be given more financial firepower to issue equity and loan-based support to businesses, and a new National Wealth Fund will provide nearly £28bn in investment for clean energy, advanced manufacturing, and digital technology.
But dig deeper behind those headlines and there is evidence of style over substance with the most striking example being the government’s claim to be “backing Britain’s innovators, researchers and entrepreneurs” by committing to £22bn per year in research and development funding by the end of the spending review period.
At face value, this sounds ambitious but whilst the Treasury boasts that total R&D spending over the period will be £86bn, the pace of investment growth has been slowed even compared to the previous Conservative government. In practice, this amounts to a scaling back of R&D ambition at the very moment when the global race for innovation leadership is accelerating.
For founders and high-growth businesses working on cutting-edge technologies, it is a missed opportunity and while the 海角视频 continues to produce world-class science, the commercialisation pipeline remains slow. Delaying R&D investment simply prolongs that fragility and without adequate public funding to match private capital, start-ups will continue to struggle to bridge the valley of death between the laboratory and the market.
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Yet there are still parts of the review that offer tangible opportunities. For example, the British Business Bank will get a part of the £9.6bn in new financial transactions, which should expand the availability of early-stage and growth capital across the 海角视频. Regional funds, startup loans, and scale-up programmes could all benefit if the bank is allowed to deploy capital at speed especially as, in contrast to many other public finance initiatives, it has been focusing its efforts on supporting ambitious entrepreneurs.
The same logic applies to the new National Wealth Fund which will target priority sectors with a focus on crowding in private investment. For SMEs in clean tech, energy infrastructure, and digital manufacturing, this could be a game changer if procurement processes are simplified and SMEs are given more opportunities to get involved. Unfortunately, public investment vehicles have often defaulted to larger businesses locking out smaller, more agile firms who lack the capacity to navigate red tape.
There is also a strong focus on digital transformation with £1.2bn in direct investment in cross-government AI and digital delivery and an ambition is to make government more efficient, less bureaucratic, and more user-friendly.
In addition, HMRC will become a digital-first organisation which could significantly reduce the administrative burden on small business owners who often waste hours dealing with outdated tax systems. It may also unlock opportunities for govtech entrepreneurs - particularly those building automation, identity verification, or analytics tools - to take advantage of these changes.
On the other hand, SMEs may also feel the squeeze from new HMRC compliance measures as there will be a greater focus on compliance and debt recovery with the goal of raising £7.5bn a year in additional tax revenue by 2029-30. While tackling tax evasion is important, there is a risk that this creates a more adversarial environment for legitimate small businesses who may face increased audits, stricter enforcement and an aggressive interpretation of regulations.
In Wales, the 海角视频 Government has committed to an average uplift of £1.4bn in day-to-day spending and £200m in capital annually.
How that money is spent will be determined by the Welsh Government and whilst some of these funds could be used to strengthen regional entrepreneurship through new start-up hubs, local accelerators, or direct grant support for micro-businesses, that is highly unlikely given its previous spending record.
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Indeed, given the pressures on NHS Wales and education and the fact that economic development does not seem to be a priority, business support will once again be an area that will not get the funding it needs to make a difference.
The CSR also aims to reform how public investment is appraised with changes to the Treasury’s Green Book that will improve the case for spending outside of London and south east England. This has long been a structural problem as promising regional investment bids have often been downgraded by Treasury models that fail to recognise local impact and if implemented properly, this reform could be one of the most important long-term wins for the 海角视频’s devolved nations and regions and the small firms that anchor them.
Therefore, whilst the 2025 CSR outlines the right priorities namely investment, innovation, infrastructure, and regional growth, it could have done more to ensure greater urgency and coherence especially following the decline in economic growth announced the next day. Whilst it could be argued that those entrepreneurs who can change the 海角视频 economy for the better, it partially opens the door to opportunity, much more needs to be done to fully unlock it to create wealth and employment.
Certainly, if the 海角视频 Government is genuine about positioning small business as the driving force of a new economic era, then it must ensure that its policies act faster, think smaller, and deliver more reliably.