Spending Review 2025: What does it mean for AAT and its members? 

Here’s what we know about how public money will be allocated over the next three years. 

This week, the Chancellor delivered the Government’s latest Spending Review, setting out how public money will be allocated over the next three years. While it lacked major surprises, there were still some announcements of interest to AAT members and the wider profession. Here’s a brief look at the key points. 

The Big Picture

The Spending Review confirmed departmental budgets through to 2028/29, with capital investment stretching to 2029/30. NHS funding will rise by 3% annually, defence will increase to 2.6% of GDP by 2027, and £39 billion has been earmarked for social and affordable housing. There’s also £15 billion for improving transport. However, many departments will still face real-terms spending cuts. 

Key Measures for AAT

Skills and Apprenticeships 

A promised £1.2 billion extra a year for skills sounds impressive, but most of this has already been announced. The focus is on the 16-19 year old cohort and sectors like construction, but noticeable increases in learner numbers won’t arrive until 2027/28. Over £2 billion will go into the AI Opportunities Action Plan, with £48 million for the Tech Expert programme to boost AI education. Adult education didn’t get a mention, with further detail promised in the Post-16 Skills Strategy later this year. Some regions – including London, the North East and South Yorkshire – will get more local control over skills funding from 2026/27. 

HMRC Resourcing 

HMRC will receive £500 million to become a more digital-first operation, including greater use of AI and a plan to phase out most outbound mail. This investment could ease the challenges that AAT members face, but it needs to deliver in real time so that these tools are available sooner rather than later. 

Support for SMEs 

The British Business Bank’s funding is increasing to £25.6 billion, meaning continued backing for Start-Up Loans and regional investment. 

Industrial Strategy 

An updated Industrial Strategy is due later this month, with expected measures to support professional and business services – an area where many AAT members work. 

What happens next

You can read our article about The Industrial Strategy, a key milestone on the next stage of the roadmap. 

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