LCCI reacts to the government's Spending Review

Wednesday 11 June 2025

Today’s Spending Review fell short of the commitments needed for addressing London’s challenges, generating additional revenue for the UK and remaining globally competitive.

Boosting capital spending to improve infrastructure and drive economic growth across the UK is an objective that LCCI strongly supports. However, doing so in a way that results in relatively in less spending for London is not only unfortunate as it does not take into account the capital’s unique needs, but also antithetical to the purported aims of the Spending Review due to London accounting for a quarter of the UK’s economy.

Without sustained investment London's economy is at risk of flatlining, which will impact not just the city, but the rest of the UK. Its ability to compete on the global stage will also be impacted.

Having long supported calls for a multi-year funding settlement for City Hall and Transport for London, London Chamber of Commerce and Industry (LCCI) welcomes the long-term certainty about investment in the city’s transport network that the Government’s commitment in the Spending Review provides.

TfL have confirmed the four-year settlement means they can complete the introduction of new trains on the Piccadilly line and DLR and new signalling on 40 per cent of the Tube, can procure a new tram fleet, progress discussions on new Bakerloo line trains, and can get to work on renewing some of London’s critical roads, tunnels and flyovers. We also note the Government’s commitment to look at extending the Docklands Light Railway to Thamesmead.

It was disappointing however to see no mention of the Bakerloo line extension or proper commitments to delivering this vital infrastructure which will create jobs, encourage housebuilding, and improve connectivity across London and the wider UK.

The argument for investing in public transport is clear – the Treasury’s own analysis shows more passenger journeys are undertaken in London than the rest of the country combined and TfL confirmed that nearly a third of their overall spend and resulting economic benefit are felt outside of our city.

Aviation

The Chancellor’s renewed backing for Heathrow’s third runway, which will ensure global connectivity and long-term economic opportunity is also welcome.

Finance

The allocation of £25.6bn to the British Business Bank’s is vital for driving innovation and attracting private capital. However, we urge the Government to ensure that London receives its fair share of support to maintain its global competitiveness, unlock business growth, and strengthen the UK economy as a whole.

Jobs and skills

The government’s commitment to training and apprenticeships is a step in the right direction. To unlock the full potential of apprenticeships, we continue to call on the government to ensure they give employers the needed flexibility to use them to effectively train the skilled workers of the future. We also urge them to look again at the recent cuts to the Adult Skills Fund.

Policing

It is essential that a fair proportion of the 13,000 new police officers must be deployed to the Met to support London’s residents and business community, which continues to face rising levels of crime.

Housing

While the Chancellor’s £39bn ten-year commitment to the Affordable Homes is a positive step, it is essential that London receives its fair share of this funding. Addressing the capital’s housing crisis is essential to driving prosperity and ensuring businesses can access the talent they need.

In the last year alone, businesses have weathered a cost-of-living crisis, increased taxes and international trade disputes. London businesses are resilient, but the city requires ongoing investment to retain its status as a global city, create jobs, and deliver financial returns that benefit the whole of the UK.

Karim Fatehi OBE, CEO, London Chamber of Commerce and Industry said:

"LCCI strongly supports the UK government's commitment to capital spending to improve infrastructure and economic growth across the nation, but we are deeply concerned that this review falls short in ensuring London's continued status as a global economic powerhouse.

"While we welcome the Chancellor's renewed support for Heathrow's third runway and the four-year funding settlement for Transport for London (TfL), these measures alone are insufficient. London requires comprehensive and long-term capital funding to address critical needs in transport, policing and affordable housing.

"London's prosperity is integral to the nation's economic outlook and without the necessary financial backing there is a risk of undermining the UK's ability to remain globally competitive."

ENDS