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The UK’s New Growth Plan: Where the Industrial Strategy Money Is Going, Sector by Sector

The UK is about to bet big on its economic future. The government’s Modern Industrial Strategy is a ten-year plan designed to supercharge growth, create high-paying jobs, and raise living standards.

It targets eight high-growth sectors: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services.

The strategy calls for a more proactive partnership between government and industry to tackle economic challenges and seize global opportunities. It acknowledges longstanding weaknesses in the UK economy – persistently low investment, weak productivity, and underperforming regions – and aims to reverse these through targeted intervention, smarter regulation, and a clearer national direction.

We unpack what’s driving the strategy, where it’s focused, and how funding is being allocated across key sectors.

 

Key Objectives and Strategic Shifts

The strategy is a response to decades of underperformance. Business investment in the UK lags behind other developed nations. Market dynamism has stalled, and outside of London, many city regions have not reached their economic potential. Arguably, these issues have fuelled inequality, added to the cost-of-living crisis, and contributed to a perceived decline in national economic security.

To tackle this, the strategy aims to increase business investment, particularly in frontier industries such as AI, green energy, and advanced manufacturing. It proposes making the UK more attractive to investors by improving planning processes, cutting regulatory delays, and reducing costs like industrial electricity.

By publishing this strategy, the government signals its commitment to building long-term, collaborative partnerships with business to achieve shared national objectives.

 

A Focus on Place: Levelling Up Through Clusters and Connectivity

Regional growth is central to the plan. The government aims to unlock the potential of specific places where high-growth sectors are concentrated. Key locations include the Oxford-Cambridge Growth Corridor, the Northern Powerhouse, and city regions across Scotland, Wales, and Northern Ireland.

To support this, the strategy introduces new Industrial Strategy Zones (including Investment Zones and Freeports), Strategic Sites Accelerators, and AI Growth Zones. These will improve the availability of investible sites, strengthen regional infrastructure, and support collaboration between businesses, universities, and local authorities.

Transport connectivity and support for innovation ecosystems are also a key part of the plan, with initiatives that will target areas like Greater Manchester, Liverpool, and Glasgow to spread the benefits of growth more widely.

 

Sector-Specific Strategies: A Deep Dive

As part of the Industrial Strategy rollout, the government has published dedicated plans for the Advanced Manufacturing, Creative Industries, Clean Energy, Digital and Technologies, and Professional and Business Services sectors, with Life Sciences, Financial Services and Defence to follow later.

Below, we examine each currently published plan in turn, highlighting the key spending commitments set out in each, many of which have been previously announced in the 2025 Spending Review, Spring Statement and Autumn Budget, but now brought together in context.

 

Advanced Manufacturing Sector Plan

The Advanced Manufacturing Sector Plan seeks to establish the UK as the premier global destination for advanced manufacturing investments by 2035.

This will be achieved by reforming the business environment to improve resilience, boost innovation and automation, and develop a skilled and inclusive workforce.

The strategy prioritises six frontier industries – automotive, batteries, aerospace, space, advanced materials, and agri-tech – and leverages the potential of regional clusters through targeted investments and partnerships with industry and devolved governments.

The plan emphasises increasing private sector investment, streamlining regulations to encourage innovation, and addressing skills gaps through various training and apprenticeship programmes.

In addition, the plan emphasises the need to build stronger supply chains and reduce reliance on foreign sources for critical materials.

New and/or existing budgetary commitments detailed in the strategy

Please note that, throughout this article, we have grouped budget spend figures (£) by type of intervention, recognising that some allocations could reasonably fit into multiple categories.

🔬 |  Research & Development (R&D):

  • Up to £4.3 billion (including up to £2.8 billion R&D) for the Advanced Manufacturing sector.
  • £2.3 billion to 2035 for the Aerospace Technology Institute (ATI) Programme.
  • More than £1.65 billion in R&D funding via the Advanced Propulsion Centre.
  • £2 billion (plus an additional £500 million) for DRIVE35.
  • £452 million to 2030 for the Battery Innovation Programme.
  • £130 million for the Battery Innovation Programme (unlocking over £800 million private investment).
  • More than £150 million of public funding for the Farming Innovation Programme (attracting over £54 million private investment).
  • Up to £80 million over five years for the Space Industrial Plan and Launch.
  • £50 million for Phase 1 of the National Materials Innovation Programme (NMIP).
  • £42.5 million investment in a Defence Materials Centre of Excellence in Manchester.
  • £29 million a year to 2030 for Made Smarter Innovation.
  • £19.6 million for the 3D Nanoscale Metamaterials Hub.
  • £12 million in funding for the High Value Manufacturing Catapult (HVMC) for battery materials.
  • £12 million of NMIP investment to coordinate activities across civil and defence.

🏗️ |  Infrastructure:

  • Over £1 billion invested by the High Value Manufacturing Catapult (HVMC) in R&D facilities.
  • £400 million investment to further roll out charging infrastructure.
  • £160 million funding for each of the Advanced Manufacturing-focused Investment Zones over 10 years.
  • Space Clusters Infrastructure Fund (up to £135 million total across multiple programmes).
  • £40 million initial investment for the Robotics and Autonomous Systems (RAS) programme.

🎓 |  Skills & Training:

  • £625 million in construction skills programmes.
  • £100 million over three years to support engineering skills in England.
  • Up to £99 million for Made Smarter Adoption (includes digital internships).

🔗 |  Supply Chain Resilience:

  • Support for foundational industries (steel, chemicals, etc.).
  • Funding for securing critical minerals.

💼 |  Business Support & Finance:

  • £80 billion of finance capacity from UK Export Finance.
  • £27.8 billion from the National Wealth Fund.
  • £4 billion for priority sectors through the British Business Bank’s Industrial Strategy Growth Capital.
  • Up to £680 million in finance for the AESC Gigafactory.
  • Over £16 million in private investment leveraged through the Made Smarter Adoption programme.
  • £5 million of government funding (aiming to match with at least £10 million private investment) for Farming Innovation Investor Partnerships.

 

Creative Industries Sector Plan

In an aim to elevate the UK to the forefront of global creative investment, the Creative Industries Sector Plan projects an increase in annual investment from £17 billion to £31 billion by 2035.

The plan focuses on four interconnected strategies: strengthening the overall business environment, fostering growth in key creative sectors, maximising the potential of regional creative clusters, and building a lasting partnership between government and industry.

It is intended that the plan will involve boosting innovation through increased R&D funding and support for emerging technologies like createch, improving access to finance, developing a skilled and diverse workforce, and enhancing international trade.

The plan also prioritises investment in infrastructure, skills development, and regional economic growth in an attempt to ensure that the benefits of the creative industries are felt across the entire UK.

New and/or existing budgetary commitments detailed in the strategy

💰 |  Financial Support & Investment:

  • £4 billion of Industrial Strategy Growth Capital from the British Business Bank.
  • £150 million Creative Places Growth Fund for Mayoral Strategic Authorities.
  • £100 million UKRI investment for R&D creative clusters over the Spending Review period.
  • £11 million private investment leveraged for National Film and Television School expansion (in addition to £10m government funding).

📺 |  Sector-Specific Growth Initiatives:

  • £75 million Screen Growth Package (Film & TV).
  • £30 million Video Games Growth Package.
  • Up to £30 million Music Growth Package.

🛠️ |  Skills Development & Training:

  • £132.5 million to increase disadvantaged young people’s access to enrichment opportunities.
  • £9 million for a refreshed UK-wide creative careers service.

🌍 |  Regional & Infrastructure Development:

  • £450 million for Sunderland’s Crown Works Studios.
  • £160 million government-funded Investment Zone in Tees Valley.
  • £25 million Creative Futures programme for CoSTAR network expansion.

 

Clean Energy Industries Sector Plan

Aiming to position the UK as a leader in clean energy, the Clean Energy Industries Sector Plan targets doubling current investments to over £30 billion annually by 2035.

This involves at least doubling current investment levels to over £30 billion annually by 2035, focusing on six frontier industries: wind (onshore, offshore, and floating), nuclear fission, fusion energy, carbon capture, usage, and storage (CCUS), hydrogen, and heat pumps.

The strategy emphasises building domestic supply chains, creating hundreds of thousands of high-quality jobs, boosting exports, and ensuring energy security.

Key components of the plan include the intention to provide investment certainty through long-term deployment plans, making catalytic public investments to leverage private finance, breaking down barriers to investment (planning, infrastructure, and energy prices), and developing a skilled workforce with strong trade union representation.

International partnerships are also positioned as being crucial for securing resilient supply chains and export opportunities.

New and/or existing budgetary commitments detailed in the strategy

🔋 |  Catalytic Public Investment:

  • £27.8 billion total capital for the National Wealth Fund
  • £25.6 billion total financial capacity for the British Business Bank (including £4 billion for scale-up and start-up support)
  • £8.3 billion+ investment over this Parliament in homegrown clean power (Great British Energy & Great British Energy – Nuclear)
  • £5.8 billion+ NWF commitment over this Parliament to ports, hydrogen, carbon capture, gigafactories, and green steel
  • £1 billion Clean Energy Supply Chain Fund (Great British Energy)
  • £700 million additional allocation to support sectors aligned with this Industrial Strategy (GBE)
  • £500 million for the R&D Missions Accelerator Programme (leveraging a further £1.5 billion of private and third sector investment)
  • £200 million initial investment in local and community energy projects (GBE)
  • £86 million for R&D (Spending Review)
  • £20 million over 7 years through UKRI’s Sustainable Industrial Futures programme
  • £12 million investment in UK Data Sharing Infrastructure initiatives (from April 2026)

☢️ |  Nuclear Fission:

  • £14.2 billion for Sizewell C
  • £2.5 billion+ for the overall SMR programme across the Spending Review period
  • £300 million in the High Assay Low Enriched Uranium (HALEU) fuel programme

🌿 |  Carbon Capture, Utilisation, and Storage (CCUS):

  • £21.7 billion of available funding over 25 years for the UK’s CCUS industry
  • £9.4 billion in capital budgets over the Spending Review period for maximising CCUS deployment

🔥 |  Heat Pumps:

  • £13.2 billion of public investment for the Warm Homes Plan over the Spending Review Period (including £5 billion of financial transactions)
  • £1.29 billion budget for Warm Homes – Social Housing Fund wave 3 (running through to September 2028)
  • £500 million budget for Warm Homes: Local Grant (running through to March 2028)
  • Up to £30 million total for Heat Pump Investment Accelerator Competition – Round 1

👷 |  Skills and Workforce Development:

  • £100m+ over three years to support engineering skills in England (Skills Mission Fund)

🍃 |  Other:

  • £544 million for the Clean Industry Bonus (leveraging up to £9 billion in private sector investment)
  • £300 million Great British Energy supply chain funding for offshore wind
  • Up to £80 million made available through the Spending Review to support investment in the Future Port Talbot project (subject to due diligence)
  • £55 million awarded to the Port of Cromarty Firth

 

Digital and Technologies Sector Plan

The Digital and Technologies Sector Plan aspires for the UK to rank among the top three global hotspots for tech businesses by 2035.

The strategy focuses on six interdependent pillars: boosting R&D investment, increasing access to finance, creating a skilled workforce, enhancing infrastructure, delivering pro-innovation regulation, and securing international partnerships.

These pillars support six frontier technologies (advanced connectivity technologies, artificial intelligence, cybersecurity, engineering biology, quantum technologies, and semiconductors) that the government believes have the greatest growth potential and importance for UK security and sovereignty.

The plan emphasises a whole-of-government approach, leveraging public investment to stimulate private sector involvement with the intention of fostering a thriving, globally competitive technology ecosystem.

New and/or existing budgetary commitments detailed in the strategy

💡 |  R&D Investment:

  • £56 billion anticipated support for business R&D expenditure in 2029-30 through tax reliefs
  • £22.6 billion annual R&D budget by 2029/30
  • £1 billion to expand AI compute capacity by at least 20 times by 2030, plus up to £750 million for a new supercomputer in Edinburgh
  • £670 million to drive the development and adoption of quantum computers
  • £240 million for a four-year targeted ACT research programme
  • £196 million for a National Engineering Biology Programme
  • £184 million for an Engineering Biology Scale-up Infrastructure Programme
  • £130 million for strengthening ACT lab infrastructure
  • £50 million for ARIA’s Scaling Compute programme
  • £35 million for a UK-wide semiconductor skills programme
  • £25 million to launch two new Innovation and Knowledge Centres
  • £19 million for a new UK Semiconductor Centre
  • £5 million for a Chip Design Enablement Programme

 💰 |  Finance and Investment:

  • £4 billion of Industrial Strategy Growth Capital from the BBB, leveraging £12 billion of private sector capital.
  • Up to £330 million investment through NSSIF in dual-use technology businesses.
  • £250 million BBB investment into Schroders Capital’s Long-Term Asset Fund, matched by £250 million from Phoenix Group.
  • £80 billion capacity from UKEF to support UK exporters.
  • £60 million direct equity investment from the NWF into Pragmatic Semiconductor.

🛠️ |  Skills and Training:

  • £187 million for the TechFirst skills programme.
  • £24 million to promote the use of CHERI technology.
  • £10 million to expand Cyber ASAP.
  • £6 million to expand the Cyber Runway accelerator.
  • £2 million for the Cyber AI Hub in Belfast.

🏢 |  Infrastructure:

  • £2.5 billion investment to enable a small modular reactor programme.
  • £1.8 billion to roll out gigabit-capable broadband.
  • £1 billion to expand AI compute capacity.
  • Up to £12 million in UK Data Sharing Infrastructure Initiatives from April 2026.

🏗️ |  Other:

  • £2.5 billion in funding for the Steel Strategy
  • £625 million in construction skills training
  • £500 million in the Local Innovation Partnerships Fund
  • £100 million expansion to the BBB’s NRIF, for Cluster Champions
  • £30 million through Research England in university-led place-based ecosystem projects
  • £8 million investment from DSIT’s Sovereign AI Unit for the OpenBind consortium
  • £5.5 million investment in the Regulators’ Pioneer Fund

 

Industrial Strategy for Professional and Business Services

The strategy for Professional and Business Services (PBS) seeks to consolidate the UK’s leadership in this sector by prioritising technology adoption, workforce development, and enhancing global trade opportunities.

The strategy focuses on four key areas: improving the business environment for PBS firms (ease, speed, and stability); prioritising frontier industries like accountancy, legal services, and management consultancy; maximising the economic potential of regional PBS clusters; and fostering strong partnerships between government and industry.

The plan emphasises increasing technology adoption (especially AI), developing a highly skilled workforce, expanding global trade opportunities, improving access to finance, and maintaining international leadership in setting standards and regulations.

This multifaceted approach seeks to nearly double annual business investment in the sector and achieve significant growth in gross value added (GVA).

New and/or existing budgetary commitments detailed in the strategy

🤖 |  Technology Adoption and Innovation:

  • £150 million: Funding for five transformative programmes to encourage PBS innovation and technology adoption (including a Made Smarter digital adoption programme for SMEs and expansion of UKRI’s PBS Innovation programme).
  • £12 million: Investment in UK Data Sharing Infrastructure Initiatives (from April 2026).

👥 |  Workforce Development:

  • Level 7 apprenticeships for young people will continue to be funded through the Growth and Skills Levy.

🌐 |  Trade and Investment:

  • UK Export Finance (UKEF) has up to £80 billion in finance capacity available to support UK exporters.

💰 |  Finance and Investment:

  • £4 billion: British Business Bank Industrial Strategy Growth Capital (ISGC) initiative.
  • Up to £60 million: Direct investments by the BBB in strategically important companies.

 

A High-Stakes Gamble on the UK’s Future

This new Industrial Strategy is the first to use that title since Theresa May’s Conservative government published its own Industrial Strategy in 2017 and is a bold attempt to reshape the UK’s economic fortunes.

By prioritising proactive partnership, targeted investment, and a focus on innovation and regional growth, the strategy aims to build a more secure, sustainable, and regionally balanced economy.

Success will depend on effective implementation, collaboration between government and industry, and adaptability to evolving global conditions. The strategy’s ambition is undeniable; its ultimate impact remains to be seen.