How The 2025 Spending Review Will Impact Public Sector Bids

Chancellor Rachel Reeves presented her 2025 spending review earlier this month, supplementing the increases in capital spending announced as part of the 2024 Autumn Budget.

The review has resulted in significant announcement regarding investment in spending in key areas of the UK economy – from which public sector tenders will be downstream.

We summarise the key takeaways from the spending review, what sectors will be impacted and see increased opportunities, and how organisations can prepare to submit a bid for sizeable contracts.

Key takeaways from the spending review

The spending review represented a continuation of key investment following on from the most recent Autumn Budget, with top-level figures including:

• £29 billion annual increase to NHS funding, with a separate £10 billion for digital transformation projects
• £14.2 billion allocated to the development and construction of the new Sizewell C nuclear power station
• £39 billion for Homes England housing projects as part of a new, 10-year Affordable Homes Programme which will boost the housing supply
• £13.2 billion to fund the Warm Homes Plan as part of wider decarbonisation and retrofit works
• £15.6 billion for local transport across city regions, as well as £3.5 billion allocated to the TransPennine Route Upgrade and £2.5 billion for the East West Railway Company.

All the above are crucial industries and sectors which are part of the competitive tender process – and, as such, we anticipate an increase in tender opportunities for suppliers looking to do business with the public sector.

Industries which may see increased tender opportunities

Based on the above, we can reasonably expect to see an increase in the following industries and sectors:

Decarbonisation and retrofit

For the current government, decarbonisation and retrofit projects are at the heart of housing aims and objectives, with a current target for all privately rented homes to achieve a minimum EPC rating of C by 2030 (and many housing associations and councils following suit).

Recent examples of large-scale decarbonisation and retrofit tenders and frameworks include:

• Procure Plus: Framework for Installation of Low- and Zero-Carbon Technologies
• Suffolk Council: Energy Efficiency and Renewables Retrofit Framework
• Prosper: Decarbonisation and Retrofit Framework.

This will remain a priority for housing associations and councils over the next few years. Many organisations completing repairs and maintenance or gas servicing may be looking to upskill and gain relevant accreditations (such as PAS 2030:2023) to be eligible to bid.

Railway construction, upgrades and maintenance

Public transport and the railways have been a priority for the current government, including the establishment of Great British Railways as part of their rail strategy.

Funding allocated to specific railways will allow for the construction of new tracks or maintenance of existing infrastructure to ensure this is both compliant and up to date. With the government looking to increase the percentage of SMEs within their supply chain, tenders stemming from the funding will likely be lotted or framework agreements to facilitate access for smaller suppliers.

Lastly, with rumblings that HS2’s total scope has been reset and a new 10-year infrastructure strategy newly released, prospective suppliers could see even more tender opportunities within the rail sector in the coming months.

Health and social care

With the new tranches of investment in health and social care, bidders can expect the following activity as a consequence:

• Increased budget for devolved and local authorities for domiciliary care, supported living and other forms of care and support, in line with the government’s Local Authority White Paper giving more powers to sub-central authorities
• New opportunities in data and digital transformation, allowing IT and data management suppliers to bid into the NHS
• More recruitment solutions for healthcare and non-healthcare staff (for example, RM6288 Workforce Solutions and RM6277 Non-Clinical Staffing).

The above are just a small selection of examples, and more funding has been earmarked for other, more specialist sectors. For instance, an additional £400 million for electric vehicle charge points and £616 million has been allocated to active travel (cycling/walking routes), promoting greener transport and mixed-transport environments.

What bidders should do to prepare

With an influx of new bid and tender opportunities and a typical four- to six-week turnaround, organisation and swift decision-making is critical to ensure you submit a high-quality bid and, ultimately, secure the contract.

At this stage, we recommend bidders:

• Ensure all paperwork and common documentation for tender submissions, including accounts, insurance and accreditations or certifications (such as ISO 9001:2015) are up to date
• Monitor Find a Tender and Contracts Finder, two free-to-use government websites, for live tender notices and new pipeline and planning notices
• Attend pre-market engagement events and sessions – either in-person or online – to learn as much information as possible in advance about the opportunity
• Consider upskilling your workforce to ensure competent and capable individuals to complete high-quality, competitive tender submissions – or alternatively, secure expert external support in advance.

Bid and tender services

At Executive Compass, our bid and tender services have been supporting clients for more than 15 years across 8,000 bid and tender submissions. This includes:

• Bid writing services and support, where one of our expert bid and tender writers takes control of the quality element of the submission and offers wider bid management support, including bid management and collation of tender documents
• Bid review services, where a senior member of the team will conduct a line-by-line review of the quality element of your submission, leaving comments suggesting targeted enhancements aimed at the strongest possible submission
• Bid training and pre-bid consultancy services, which can be tailored to your organisational bidding strategy or involve preparation for a key, business-critical submission.

Our sales and marketing team would be happy to discuss a tender you are interested in bidding for today at info@executivecompass.co.uk or via telephone 0800 612 5563.