Reeves pledges investment in AI, apprenticeships and community assets

Government has pledged £2bn in research and development funding for its AI action plan as part of its Spending Review, announced today (11 June), in one of several measures that will impact the cultural and creative industries.

The financing, announced by Chancellor Rachel Reeves, will be used to expand the UK’s AI Research Resource capacity, including £48m allocated for its Tech Expert programme to increase AI course provision and scholarships at universities.

The sizable investment in AI means that of all government departments, Science and Technology will receive the most significant increase in its day-to-day spending over the three years to 2028-29, with an annual average rise of 7.4%.

This contrasts with average annual real growth over the same period for Culture Media and Sport of -1.2%, and for Business and Trade, which stands at -1.8%.

To help small businesses and promote entrepreneurship, as part of her allocation for the Department for Business and Trade, Reeves announced £2.9 bn for the British Business Bank, allowing the bank to offer two-thirds more support in aiding companies to start up and grow.

The Department of Education will see its schools budget grow by £2bn in real terms over the spending review period, as well as around £2.4bn per year to be invested in the School Rebuilding Programme.

To further support both young people and businesses, Reeves announced an investment of £1.2bn a year by the end of the spending review to provide over a million young people with training and apprenticeships.

New local investment funds

For local government, Reeves is providing an additional £3.4bn in grant funding for 2028-29 compared with 2024-25, amounting to an average annual real-terms increase in core spending of 3.1% across the whole spending review period.

Also announced was a new local growth fund, which will “complete the transition” away from the previous Conservative government’s Shared Prosperity Fund, a key pillar of its Levelling Up agenda.

The new fund will include a 10-year capital settlement from 2026-27 to 2035-36, for specific mayoral city regions in the North and Midlands with the “highest productivity catch-up and agglomeration potential”.

Reeves also announced investment for up to 350 deprived communities across the UK, which will fund community cohesion and regeneration interventions, including improvements to parks, youth facilities, swimming pools and libraries in areas such as Stockport, Swindon and Newcastle.

Administered by the Ministry of Housing, Communities and Local Government, Reeves said that communities would not be able to bid to benefit from the fund, and that the full list of recipients would be announced “in due course”.

The government is also establishing a Growth Mission Fund to support local economic growth by investing £240m of capital from 2026-27 to 2029-30 in projects that enable local job creation and the economic regeneration of local communities.

In her speech, Reeves suggested the fund would be used to support projects such as the reopening of Southport Pier, which has been closed since 2022, regenerating Kirkcaldy’s high street and seafront, and plans for Peterborough’s new sports quarter, with further details and criteria for project selection due to be set out later this summer.

“I know the pride that people feel in their communities,” said Reeves. “But I also know that for too many people, there is a sense that something has been lost.

“As High Streets have declined, as community spaces have closed, as jobs and opportunities have gone elsewhere. The renewal of Britain must be felt everywhere.”

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