Budget 2025: Stability, Ambition, and the UK’s Path to Global Leadership

At Larkspur International, we operate across the sectors driving the UK’s future competitiveness- digital transformation, infrastructure, defence, telecoms, and healthcare and more. Following our discussions the direction is unmistakable:

The UK wants to stabilise today, and lead tomorrow.

Budget 2025 reflects that ambition. It balances fiscal responsibility with targeted investment in strategic industries, setting a clear path for Britain to act boldly on the global stage.

For the UK this Budget provides clarity, opportunity, and a framework for long-term planning.

A Clear Strategic Message: Stability First, Leadership Next

The Government’s narrative is consistent: stability is the foundation, but leadership is the goal.

Stability as the anchor

• Continued cost-of-living support
• Commitment to cutting NHS waiting lists
• No return to austerity
• Stability rule met a year early

A stronger partnership with business

This Budget reinforces a commitment to work directly and openly with enterprise:

“If you build here, Britain will back you.”

For global companies, infrastructure providers, defence manufacturers, and healthcare suppliers, this represents a decisive shift toward predictability, partnership, and long-term policy certainty.

A desire to lead, not follow

The UK aims to occupy a leadership position in the global fields of automation, clean energy, defence modernisation, connectivity, and digital health.

A Pragmatic Economic Outlook

The OBR’s analysis presents a balanced but realistic picture:

Growth & Productivity:

• Real GDP growth steady at 1.5% across the forecast period.
• Productivity downgraded to 1.0%- increasing the urgency for digital transformation and automation, areas central to Larkspur’s technology goals.
• Inflation to return toward target only by 2027.

Labour Market:

• Unemployment stabilising around 5% for several years.
• Labour market strain from long-term sickness and demographic shifts.

Public Finances:

• Debt stabilising at 96% of GDP, still historically high.
• Borrowing falling to 1.9% of GDP by 2030–31.
• Record 38% tax-to-GDP ratio, reinforcing the importance of efficiency and productivity across both private and public sectors.

These conditions clarify the environment in which our clients will operate: stable but high-pressure, with productivity, digitisation, and innovation central to economic resilience.

Where Investment Is Focused- and Why It Matters 

Public Services and Infrastructure:

• £33bn for public service capability
• £18bn transport investment for England
• Continued commitments to regional growth zones, including in Wales

This creates a foundation for:

• demand for digital workflow transformation
• scaling EV transport infrastructure
• increased defence procurement certainty
• improved connectivity corridors for telecoms operators
• urgent modernisation of NHS systems and digital health models
  

Sector-Specific Implications 

1. Technology and Automation 

The Budget and OBR report both highlight the centrality of productivity to the UK’s future. That translates directly into increased demand for:

• AI-enabled decisioning
• workflow automation
• fraud and error reduction systems
• digital identity infrastructure
• integrated case management
• low-code transformation across government departments
  

The Government’s plan to raise £10bn through fraud and error reduction, alongside the rollout of Digital ID, will require exactly the kind of enterprise automation and workflow orchestration that platforms already deliver within the government.

Public services under strain from the NHS to HMRC to local authorities, will increasingly adopt end-to-end automated platforms that deliver operational efficiency and citizen experience improvements.

This Budget strengthens the UK's reliance on technology partners capable of delivering scale, resilience, and transformation at speed.

2. Clean Transport and EV Charging 

The most consequential transport policy in a decade emerges here:

A new mileage-based charge for EVs and hybrids from 2028.

This provides:

• long-term policy stability
• clear tax treatment of EV adoption
• confidence for capital deployment models
• enhanced justification for rapid charging expansion
  

The Budget’s broader commitments- transport upgrades, regional economic growth zones, and decarbonisation alignment- create an environment where EV infrastructure will grow significantly across cities, motorways, and commercial hubs.

This positions the UK as a high-confidence market for global charging operators.

3. Defence and Security

The UK’s direction of travel in defence is unequivocal:

Increased spending and clear long-term commitments:

• Strategic aim to reach 3.5% of GDP by 2035
• Continued emphasis on sovereign industrial capability
• A reinforced “buy British” procurement preference
  

Demand will grow for:

• advanced systems and platforms
• secure supply chains
• dual-use technologies
• cyber defence and intelligence tools
• modernised digital command systems
  

For defence suppliers, Budget 2025 offers certainty, demand visibility, and an investment climate aligned with UK capability growth.

4. Telecoms and Digital Infrastructure

This Budget reinforces telecoms as the backbone of UK productivity and digital security:

• Digital ID and fraud prevention efforts require strong, secure networks
• Regional growth zones drive new requirements for fibre and 5G rollout
• AI adoption, automation, and remote service delivery create greater reliance on high-capacity connectivity
• Public service reforms further drive demand for resilient communication systems
  

Telecoms operators will find sustained opportunities in infrastructure expansion, government partnerships, and enterprise connectivity solutions.

5. Healthcare, NHS and Med-Tech 

The Budget signals intensifying pressures but also clear opportunities:

• £300m for NHS technology investment
• Expanded disability and welfare caseloads requiring modernised, integrated digital systems
• Local government SEND deficits motivating service digitisation
• Continued drive to reduce NHS waiting lists through productivity initiatives
  

As a result, demand will rise for:

• digital patient pathways
• workforce optimisation tools
• case management
• clinical workflow automation
• telehealth and virtual care platforms
  

Healthcare modernisation is no longer optional- it is mission critical.

Social Policy Announcements: A Significant Shift in Welfare and Household Support

Beyond economic stability and sectoral investment, Budget 2025 delivers one of the most consequential rounds of social policy reform in over a decade. These measures reflect a government intent on easing household pressures, reversing earlier austerity-era mechanisms, and reshaping the social safety net for a more resilient Britain.

Ending the Two-Child Cap- A Major Structural Change

The most headline-grabbing announcement is the abolition of the two-child limit in Universal Credit and tax credits, a policy that has shaped the income landscape for hundreds of thousands of families since 2017.

Key implications:

• 560,000 families will benefit.
• Average household support increases by £5,310 per year.
• The reform carries a fiscal cost of £3bn by 2029–30.

This move marks a decisive shift in welfare policy direction. It signals a broader recognition of the pressures facing families and an attempt to rebuild confidence in the social contract. It will reduce child poverty, rebalance financial strain on low- and middle-income households, and influence labour market participation, particularly for women and single parents.

Reversals to Previous Benefit Cuts: A Signal of Social Reinvestment

The Budget reverses several unpopular and high-impact welfare reductions, including:

• Restoration of winter fuel payments to previous eligibility levels.
• Reinstatement of health-related benefits that had been subject to planned restrictions.

Combined, these reversals cost £7bn by 2029–30 and reflect the Government’s intent to protect vulnerable groups amid enduring energy and cost-of-living pressures.

Crucially, these decisions indicate a broader acknowledgement that households remain under financial stress, even as inflation recedes.

Support for Disabled People and Rising Health-Related Inactivity

Disability and health-related welfare spending has surged since the pandemic. Rather than tightening eligibility, the Budget accommodates higher caseloads and invests in:

• improved assessment processes
• more personalised support
• better digital case management within DWP
  

For technology providers, this environment will accelerate the adoption of automation, decisioning, and modern case handling systems to deal with the scale and complexity of claims.

Local Authority Support and SEND Reform

Local authorities continue to face acute pressures, particularly around Special Educational Needs and Disabilities (SEND) provision.

Key context:

• SEND deficits are forecast to reach £14bn once the statutory override ends in 2027–28.
• The Government plans a future transition of full SEND costs to departmental budgets, significant for education and local service providers.
  

This funding reality will likely drive:

• further digitisation
• greater efficiency requirements
• increased procurement of tech solutions
  
• integrated service delivery models
  

A Broader Vision of Social Stability

Taken together, these social policy measures represent a strategic reinvestment in the human side of the UK economy. The Budget acknowledges that securing long-term growth requires not only economic reform, but a stronger, more resilient population supported by modern public services.

For sectors like healthcare, technology, financial services, retail, and logistics, a more stable and better-supported population translates into:

• more predictable consumer demand
• improved workforce participation
  
• reduced household volatility
  
• increased capacity to retrain and upskill
  

These reforms are not simply welfare changes, they are economic enablers, designed to underpin the UK's ambition to grow and compete globally.

A Budget That Aligns With the Future Economy

Across all industries in which Larkspur operates, one reality stands out:

The UK is positioning itself to lead in high-value, innovation-heavy sectors and it is seeking private sector partners to deliver that vision.

This Budget offers our clients:

• A more predictable policy environment
  
• Strategic investment in infrastructure and innovation
  
• Stronger demand for automation and digital transformation
  
• Long-term clarity in defence, clean transport, and healthcare
  
• A regulatory framework aligned to a decarbonising, digitising economy
  

It is a Budget that blends realism with ambition, stability with direction, and caution with the confidence to lead.

Larkspur International’s View

From our insights to our analysis of the OBR’s forecasts, the message is clear:

The UK is ready to build, modernise, and compete.

And it is looking to the private sector to help shape that future.

Larkspur International will continue to support businesses as they explore new opportunities, navigate policy changes, and expand within a UK that is choosing to move forward boldly.