The 2025 Spending Review placed digital transformation at the heart of the Government’s long-term economic and national security strategy.
Chancellor Rachel Reeves covered AI capability, cyber resilience, as she set out funding for government departments over coming years. The funding covers day–to-day spending and capital investment on infrastructure projects.
The announcement was a significant moment for the UK’s cyber ecosystem, affirming its critical role and offering a new wave of opportunity for innovation, skills, and collaboration.
Ben Shorrock, UKC3 Director and Ecosystem Development Lead, and CEO at TechSPARK, has been looking at the implications.
Cyber is central to Government transformation
The headline £3.25 billion Transformation Fund will drive modernisation across public services, with a clear focus on digital delivery, automation and security.
Each Government department is now expected to deliver at least 5% efficiency savings, largely through digital transformation and enhanced cyber resilience.
This marks a fundamental shift – cyber security is no longer just a protective layer, it is now central to delivering a more efficient, agile state.
£600 million for Intelligence and Security
An additional £600 million has been allocated to the UK’s intelligence agencies. This includes £100 million specifically for cyber and national security institutions.
The funding includes continued backing for the National Cyber Security Centre (NCSC) and the National Protective Security Authority (NPSA).
This investment underlines the importance of maintaining and expanding the UK’s defensive capabilities in an increasingly complex threat landscape.
This is a clear opportunity for innovation and public-private collaboration in threat detection, resilience and critical infrastructure protection.
Building a digitally-skilled Civil Service
The Government has committed to making 1 in 10 civil servants a “digital professional” by 2030. This means embedding AI, cyber and digital capability across departments.
This is a big ambition – and one that will rely on strong connections with the cyber ecosystem.
UKC3 and our partners already play a critical role in cyber talent development through programmes like CyberFirst, which we help support across multiple regions.
As CyberFirst transitions into the broader TechFirst programme, we’re committed to building on that success – ensuring that cyber remains a core pillar of future digital skills delivery, and that regional clusters remain central to its rollout.
Digitising HMRC
A dedicated £500 million investment will transform HMRC’s services, with a goal of making 90% of interactions digital self-serve by 2029-30.
Security, trust and data integrity will be vital to this shift – making it an important area for cyber innovators specialising in digital identity, fraud prevention and secure access.
AI Investment
The Government’s £2 billion AI Action Plan includes a 20-fold increase in the UK’s compute capacity, support for scaling AI companies, and the launch of a new UK Sovereign AI Unit.
While AI isn’t a cyber investment per se, its rapid adoption brings with it significant security challenges and opportunities.
From securing AI infrastructure to addressing model vulnerability and misuse, the cyber sector will play a vital role in ensuring AI can be deployed safely, responsibly and at scale.
Long-term growth through R&D
With R&D investment rising to £22.6 billion per year by 2029-30, the Spending Review reinforces the UK’s innovation-first approach to long-term growth.
Cyber security R&D – including secure-by-design technologies, AI safety, privacy-enhancing tech and threat modelling – must be part of this investment landscape.
An opportunity for UKC3 and the cyber ecosystem
The Spending Review places cyber at the heart of national strategy.
To make the most of this, we must:
- Ensure regional cyber clusters are recognised as essential partners in delivery of public sector digital transformation
- Embed cyber capability and innovation into the UK’s AI and digital economy ambitions
- Build new pathways into cyber careers, particularly by supporting the successful transition from CyberFirst to TechFirst
- Help SMEs access funding and procurement opportunities emerging from this wave of public sector investment
- Champion cyber resilience as an enabler of productivity and economic growth, not just a compliance exercise
UKC3 is committed to leading this national effort.
Through collaboration, innovation and a strong regional network, we will ensure the UK’s cyber sector continues to thrive, support national resilience and shape the future of secure digital infrastructure.
- Learn more about the convening power of UKC3.
