Autumn Budget 2025: What it means for tech and digital innovation

For IT professionals and the wider tech sector, the announcements show the intention to position the UK as a global leader in artificial intelligence, digital health, and clean technologies, while accelerating the transition to electric vehicles and strengthening research and development.
Below, we explore the five key areas that matter most to the technology community.

1. Skills and Apprenticeships: Building the Digital Workforce

The government pledged over £1.5 billion for employment and skills support during the Spending Review period, including £725 million for the Growth and Skills Levy.  In the Budget, the Chancellor announced funding to fully fund apprenticeships for under-25s – extending it from under 21s, and  to simplify the apprenticeship system through reforms such as:

• A streamlined suite of apprenticeship standards.
• A new co-investment rate of 75% for levy-paying employers once funds are exhausted.

The Youth Guarantee will offer six-month paid placements for 18–21-year-olds on Universal Credit, helping thousands take their first step into employment. For the tech sector, these measures are vital to address persistent skills shortages in areas like software development, cybersecurity, and data analytics.

Why it matters for IT:

The simplification of apprenticeship pathways and increased funding for SMEs could unlock opportunities for smaller tech firms to train talent without prohibitive costs. Combined with reforms to high-skill visas, the UK is signalling openness to global talent while investing in homegrown skills.

2. Artificial Intelligence: Scaling Infrastructure and Adoption

AI remains the centrepiece of the UK’s modern Industrial Strategy. The Budget confirmed up to £2 billion investment in AI infrastructure by 2030, including:

• £1 billion to expand the AI Research Resource (AIRR) programme twentyfold.
• £750 million for a new national supercomputer at the Edinburgh Parallel Computing Centre, operational by 2027.
• £100 million advance market commitment for novel compute technologies.

The government reiterated announcements made late last week around AI Growth Zones in North and South Wales, expected to create over 8,000 jobs and attract billions in private investment. The government hopes these zones will accelerate adoption across sectors such as clean energy, advanced manufacturing, and professional services, supported by initiatives like BridgeAI and the appointment of AI Champions.

Why it matters for IT:

Access to sovereign compute capacity is critical for UK-based AI research and startups. The partnership with global tech giants under the UK-US Technology Prosperity Deal, including Microsoft’s £22 billion supercomputer investment, positions the UK as a serious player in AI infrastructure. For IT professionals, this means greater opportunities in AI engineering, data science, and regulatory innovation.

3. Digital Health: Driving Productivity and Patient Outcomes

The NHS will receive £300 million in additional capital investment for technology, building on the £10 billion announced at Spending Review 2025. Key priorities include:

• Expanding the NHS App to integrate primary and secondary care.
• Closing gaps in patient access to digital health records.
• Supporting self-care and urgent care navigation through a single user-facing service.

These investments aim to boost productivity, reduce administrative burden, and improve patient outcomes through seamless data sharing.

Why it matters for IT:

Healthcare IT specialists will play a pivotal role in implementing interoperable systems and ensuring data security. The push towards digital-first healthcare creates demand for expertise in areas such as digital transformation, infrastructure,  software architecture, and tech training, which are areas where BCS members can lead.
 
Will Smart, Chair of the BCS Health and Care Faculty said: “The shift from analogue to digital in health and care will create an urgent need for skilled digital, data and technology professionals.

“Recruiting and developing people into these roles is critical, and professional bodies have a vital role to play. As reliance on digital tools grows, it’s essential that the DDaT profession is recognised as an equal member of the multidisciplinary team—alongside doctors, nurses and accountants—to safeguard patient safety.

“That’s why BCS, The Chartered Institute for IT, together with FEDIP, strongly advocate mandatory professional registration, managed by recognised bodies such as ours.”

4. Modernising HMRC through Digital Transformation

The government is investing in HMRC to overhaul the tax system and enable taxpayers to get it right first time through enhanced digitalisation. BCS has been asked by HMRC to support them in better understanding the software implications of this innovation. 

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Our community of technology professionals has been asked to advise on how any software changes arising from Budget measures can be made without placing unnecessary burden on individuals or businesses.

This programme will improve how HMRC leverages third-party data and introduce new technologies to deliver real-time, data-driven prompts that help reduce errors in tax submissions. From April 2029, all businesses will be required to issue VAT invoices electronically, with a detailed implementation roadmap to be published next year.

If you are a BCS member with experience of how third-party software interacts with HMRC systems, BCS and the Payroll Specialist Group get in touch with us at PolicyHub@bcs.uk with a short overview of your background, and views.

5. Research and Development: Backing Innovation in Growth Sectors

The Budget confirmed earlier announcements in R&D such as the extension of the DRIVE35 programme for automotive R&D to 2035, with total funding rising to £4 billion. Additional measures reiterated in the budget include:

• An AI for Science Strategy, backed by £137 million, to apply AI to accelerate research breakthroughs.
• £500 million for advanced manufacturing R&D from 2030 to 2035.
• Investment in semiconductor technologies critical to AI and data centres.
• Treble investment in metascience and expanding distributed peer review to halve funding decision times, alongside procurement reforms to nurture innovative firms.

Why it matters for IT:

R&D funding in AI, semiconductors, and clean energy will create opportunities for collaboration between academia and industry. IT professionals in research environments will benefit from improved access to compute resources and faster funding cycles, enabling cutting-edge projects in quantum computing, biotech, and AI-driven science.

6. Electric Vehicles: Accelerating the Transition

The government is committing £1.3 billion to extend the Electric Car Grant until 2030, offering up to £3,750 off eligible EV models. Other measures include:

• Raising the VED Expensive Car Supplement threshold from £40,000 to £50,000.
• Delaying benefit-in-kind rule changes for Employee Car Ownership Schemes until 2030.

Why it matters for IT:

The EV transition is not just about vehicles—it’s about data. Smart charging, grid optimisation, and connected car ecosystems will require robust digital infrastructure and cybersecurity. IT professionals will be central to developing platforms that manage energy demand, integrate IoT devices, and ensure secure data flows between vehicles and networks.

What This Means for the IT Profession

For IT professionals, the implications are clear:

• Skills and workforce development will open new pathways for apprenticeships and global talent.
• AI infrastructure and adoption will create demand for advanced technical skills and ethical governance.
• Digital health and EV ecosystems will require secure, interoperable platforms, with competent, ethical and accountable IT professionals at the core.
• R&D investment will fuel innovation in emerging technologies.

BCS members have a critical role to play in shaping these developments ensuring that technology serves society responsibly, inclusively, and sustainably.