In an announcement this week, the government set out its departmental budgets for day-to-day spending until 2028-29, and until 2029-30 for capital investment. What’s more, departmental funding will rise by 2.3% per year in real terms. Whilst this was not an announcement of direct policy changes, it will hugely influence how policymakers will work over this Parliament.

Although the spending review doesn’t explicitly allocate funds to the beauty sector, its focusses can have significant implications for our industry.

Here’s what you need to know about the UK Spending Review 2025:

Trade and promotion overseas

The spending review committed to investment in reducing global trade barriers and building new export opportunities for UK businesses via a Trade Strategy which is due to be published alongside the Government’s Industrial Strategy in the next couple of weeks. The Department for Business and Trade will also continue to maintain its presence in overseas markets. As an industry with a large exporting footprint and potential to trade much more widely – this is a welcome announcement.

Innovation & AI integration

The review commits £2 billion to “building the UK’s sovereign Al capabilities”. For the beauty industry, this could mean support in the development of AI-driven personalisation, operational efficiencies, and advanced product R&D. Notably, the Value of Beauty report notes artificial intelligence (link to Beauty AI: Where are we now? If article not transferred, remove hyperlink) to be a key structural change for the beauty sector over the coming years.

Creative industries

The creative industries were recognised as one of the UK’s growth-driving sectors in the government’s Industrial Strategy and will receive a significant increase in funding to ‘support regional growth, drive innovation and ensure the UK’s creative industries remain world-leading’. The hair and beauty sector, particularly with its talented hair and make-up artists and those driving beauty innovation, could see benefits from this commitment.

Business support & investment

The review commits to funding an expansion of the British Business Bank’s total financial capacity to £25.6 billion, aiming to support companies to ‘start, scale and grow in the UK’. This could provide crucial avenues for beauty businesses looking to access finance.

Of potential concern is the Department for Business & Trade’s target from HM Treasury to make £75 million in “annual efficiency gains” by 2028-29. Proposed measures from Treasury to meet these savings include restructuring the Office for Investment, focusing on priority sectors and core markets, digital improvements to services (such as the launch of the Business Growth Service), and procurement efficiencies.

Regional growth opportunities

The government will establish new local growth funds, investing in deprived communities across the UK. The beauty industry is highly indexed in disadvantaged communities, providing career opportunities to enable social mobility (Value of Beauty, 2023) – any additional support for these areas is therefore most welcome. These initiatives could also create opportunities for wider business expansion to new areas of the country.

Skills & workforce development

There was also a commitment to increase funding for employment support to £1.2bn per year to help people access the skills they need to progress in new and existing careers. As an industry that relies heavily on apprenticeships and further education to train its workforce, we recognise the importance of robust academic and vocational training pathways.

The Council will be working with government as the Spending Review is implemented across departments. We will continue to champion the industry as overall funding is allocated within departments such as Business & Trade, Defra, and more to ensure the beauty industry remains a key player in the government’s growth plans.

You can read the full spending review document here.