The government has pledged £2 billion in research and development funding for the AI Action Plan as part of its spending review announced today (June 11), one of several measures affecting the cultural and creative industries.
The funding announced by Prime Minister Rachel Reeves will be used to expand the UK’s AI research resource capacity. This includes £48 million allocated to the Technical Professional Program to increase AI course offerings and university scholarships.
Large investments in AI means that among all government sectors, science and technology has the most significant increase in daily spending over three years over 2028-29, with an average annual rise of 7.4%.
This contrasts with average annual real growth over the same period for cultural media and -1.2% sports and -1.8% business and trade.
As part of its allocation to the Bureau of Business and Trade to support small businesses and promote entrepreneurship, Reeves has announced £2.9 billion to the British Business Bank.
The Ministry of Education confirms that school budgets will essentially increase by £2 billion during the spending review period, and by about £2.4 billion a year, to invest in school reconstruction programs.
To further support both young people and businesses, Reeves announced an investment of £1.2 billion a year by the end of the spending review, providing training and apprenticeships to more than 1 million young people.
New local investment fund
For local governments, Reeves provided an additional £3.4 billion in grant funding from 2028-29 compared to 2028-29, which corresponds to an average real area increase of 3.1% in core spending over the entire spending review period.
A new local growth fund has also been announced. It will “complete the transition” from the previous Conservative Government’s Shared Prosperity Fund, a key pillar of its Levitation Agenda.
The new fund includes a 10-year capital settlement from 2026 to 27 for certain mayoral urban areas in the North and Midlands with “best productivity catch-up and potential for cohesion.”
Reeves has also announced investments in up to 350 seized communities across the UK. It funds community cohesion and regeneration interventions, including improvements to parks, youth facilities, swimming pools and libraries in areas such as Stockport, Swindon and Newcastle.
Reeves, managed by the Department of Housing, Community and Local Government, said the community cannot bid to benefit from the fund and the full list of winners will be released “in time.”
The government is also establishing a Growth Mission Fund to support the region’s economic growth by investing £240 million in capital from 2026-27 to 2029-30 on a project that will enable local job creation and economic revitalization of the local community.
In her speech, Reeves suggested that they use the fund to support projects such as the reopening of Kirk Kaldy’s high streets and beaches, reviving plans for Peterborough’s new sports quarter, and reopening South Port Pier.
“I know the pride that people feel in their community,” Reeves said. “But I also know that for too many people there is a sense that something has been lost.
“We have to feel the UK’s renewal everywhere as high streets have diminished as work and opportunities have gone elsewhere and as community spaces are closed.”
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