39. Spending Review 2025 - What Business Owners Need to Know

In this value-packed episode, we break down what the 2025 Spending Review means for small business owners, especially those in the trade, construction, and installation sectors. If you’ve been wondering how government spending plans actually impact your business, this episode is your go-to guide.

We simplify the complex. From tax pressures on the horizon to new opportunities through housing development, infrastructure investment, skills funding, and energy projects, we translate high-level policy into practical steps you can take today. You'll hear how changes to business rates relief could affect your outgoings, why it’s important to stress-test your pricing now, and where to look for potential growth through public sector tenders and apprenticeship support.

This isn’t just politics or numbers talk. This is about how national decisions can shape your margins, your workforce, and your path to scaling sustainably. Whether you're still on the tools or working your way out of day-to-day operations, understanding the Spending Review gives you an edge.

If you want to protect your profits, boost your visibility, and position your business to benefit from billions in government investment, this episode is for you.

The KBB Unstoppable Business Owner podcast is sponsored by KBN - Kitchens & Bathrooms News THE business magazine for kitchen and bathroom professionals.

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Transcript

Kevin D Bannister 0:16

Welcome back to the KBB Unstoppable Business Owner Podcast. If you are a business owner, then this episode is purely for you. Why? Because on June 11th, the Chancellor Rachel Raves delivered the 2025 spending review. It's set to reshape the opportunities and the challenges for business owners across the country from expanding financial schemes to major infrastructure spending and r and d grants, all the way to tax hints. We've got the full picture without all the noise, so grab a notebook because by the end of this episode, you should be able to take away some actionable steps to make sure you turn policy into profit. First off, what actually happened? Well, the spending review laid out the departmental budgets through to 2029 slash 2030. With a headline, average growth of 2.3% in real terms, total spending is set to hit 2 trillion over this period, and the big themes are a huge surge in r and d and digital, a regional infrastructure boom outside of London and some capital boost to the British Business Bank. And perhaps. Reassuringly a little bit. There was no immediate rises in any business tax or contractor tax hikes, but it's not all sunshine. The local council day-to-day budgets faced small squeezes, and this is gonna take a hit. The London transport is nowhere near the front line, and a warning from an analysis and everybody looking at this, the autumn budget could see some really high tax. It rises, whether this is higher corporation tax or some environmental levies, if growth doesn't pick up. So that's the high level view. When we look at this, the worrying thing is that we are having a full bet on growth. So in a weird way, growing and making more money. This year, I. Could actually see you paying less tax. Normally, the more you make, the more tax you pay. The problem is, is if we don't get growth going, tax will have to go up in some way or form. So as I say, every spending review has some winners and some losers. But here's where we stand from a business point of view. And where in the KBB industry, where does this really affect you? So some of the winners, you've got affordable housing and construction contracts. So the government has pledged 39 billion over 10 years to develop new social and affordable housing. That means more sustainable work for builders, trades suppliers. Going into materials, labor fitting teams, they're gonna be in some high demand. Obviously there's the big talk of the skills gap, and this is only gonna put more pressure on this. Then you've got the net zero retrofit specialists, a 13.2 billion home efficiency scheme that's gonna be on the way. Think installation, heat pumps, energy efficiency windows, everything in in the energy sector. If you are positioned for those green retrofits, especially in the kitchen and bar from arena, you could see some strong revenue, streams, probably more from some of the contract sort of work that's being done, as opposed to maybe some of the retail side of things. Another area is you've got some regional infrastructure, providers, so. Fourfold increases in local transport grants beyond London, meaning Civil Works tenders for roads, bridges, and station improvements, to improve logistics this is gonna see some huge investment, obviously beyond London, being put in, which will essentially fall into all of the arenas that sit within the KBB industry. Now, if we look at some of the losers, ultimately local council service providers, so the day-to-day budgets for councils are being trimmed by around 1.4%. In real terms, some of those smaller scale contracts are likely to be scaled back, so this could be some street furniture, things like that and some maintenance. The issue with this is it has a knock on effect. Another issue that's coming out is the London transport operation, so no fresh capital is going in for the crossrail too, or any tube upgrades. Now, this ultimately in the long term, could obviously affect some commuter delays that can dent some traffic in generally west, and east of London showrooms. Now if we look at the money side of things, the British Business Bank has just received a massive 10.3 billion capacity boost, plus 2.9 billion for BEIS grants for operational costs. Now this essentially lifts the British, business bank's total lending equity and guarantee capacity to 25.6 billion. Which is up from just under 15.5 billion. So why does this matter? Well, if you are a small, medium sized business, this means that there's gonna be more headroom in the existing schemes like the recovery loan schemes, some growth finance schemes, and any regional funds like the Northern powerhouse Investment Fund. What this also means though, is that more public money essentially makes the banks feel more secure and they feel more safer lending. So then what happens is private capital will start to creep in. So in the long run, this could obviously have a nice impact if you are looking to borrow some money, for expansion purposes Next up is innovation. R and D funding is gonna grow to 86 billion over the next four years, and there's another 2 billion for AI and data programs. Plus there's a 3.25 billion transformation fund to get the government services digital first. We're still waiting on some details on this, but what this could mean is some grants for AI driven design software subscriptions. If you are gonna invest in some of these AI things, to help your business grow, you've got digital showroom platforms and some of the vi customer experiences. If you are looking to invest in some of this money, there could be potential, relief that you can pull back in r and d credits. And don't forget the digital transformation. Ultimately, it's to get everything reporting quicker and you paying your tax on time. Really, however, the knock on effect of this will be that things will get processed a lot faster when there's a problem. You'll be able to get it sorted if you'll do a refund for. Say RD tax credits, for example. You should be able to get this a lot quicker than the current systems that are in place. Ultimately, cashflow is gold, for your business. And as I briefly mentioned at the start, you'll be relieved to hear that there are no immediate rises in any business taxes, any business rates. But there is a caveat. The autumn could bring further tax measures. Think corporation tweaks, national insurance or environmental levies if growth forecasts stall. Now, as I mentioned, this is just a caveat more than anything. However, without growth, improving it, there isn't much wiggle room. We will be doing an episode on the autumn budget as I think it's gonna be a quite a pivotal. Budget. If you are a business owner and would be happy to share some of your views after the budget, please drop me an email at kevin@kevindbanister.co uk. If you'd like to come on, the podcast would be great to exchange views, see how you see things as the business owner and help others, that may listen to the podcast hopefully. That gives you a good wrap up of the spending review and the deep dive that we've just done. I hope you find this useful. I've tried to keep out a lot of the boring parts and just give you a full picture for you as a business owner, not going into the politics of, he said this, she said that. And just looking at where you can optimize your business in certain areas where some of the opportunities may lie. I'm Kevin d er, and you've been listening to the KBB Unstoppable Business Owner Podcast.