Published: 11th June 2025
Today's Spending Review contained some promising news for the UK's engineering contracting community. The much-trailed announcement of an additional £11.5bn of state funding for a new 3.5GW nuclear power station at Sizewell in Suffolk was confirmed. And in a further boost for the nuclear sector, Rachel Reeves also confirmed the government's financial backing for Rolls Royce to develop three novel 0.5GW Small Modular Reactors at a cost of £2.5bn.
Elsewhere in her statement, Reeves confirmed that funding had been allocated to two major capture and storage projects on Humberside and in Scotland. The projects, known as 'Viking' and 'Acorn' respectively, feature in the Track-2 cluster sequencing program, taking the total number of UK projects to four.
Looking to the future, there was also good news for Britain's research and development community, with the Chancellor announcing an additional £22bn of R&D expenditure by the end of the current spending review period in 2029.
Responding to the statement, BCECA CEO Tracey Shelley said:
"On the face of it, the Chancellor's announcements are good news for our member companies. The sector has been beset by uncertainty, and the stark truth is that without a greater degree of clarity around the future pipeline of work, the prospect of redundancies is a very real one. None of the energy infrastructure projects mentioned in the speech will happen without the early and sustained involvement of engineering contractors.
The devil, as ever, is in the details, but at first glance, these announcements will be well received in boardrooms and project offices around the UK. The next few months are likely to be very interesting. I look forward to hearing what one of Rachel Reeves' predecessors, Lord Phillip Hammond, has to say about the prospects for energy infrastructure projects when he addresses our annual conference in October."
