On Wednesday 11^th June, the UK’s Chancellor of the Exchequer Rachel Reeves unveiled the first spending review under the current Labour Government. The SR is a major milestone in the UK’s economic calendar, setting out the Government’s spending priorities in the coming years. It covers department budgets through to 2028/29 and capital investment plans to 2029/30.

Research from UCL’s Faculty of Engineering Sciences (FES) has highlighted the growing need for targeted support in key areas that can help accelerate the transition to net zero. This includes optimising our energy sources by making better use of waste, increasing resilience to extreme heat and climate impacts, enabling a circular economy by prioritising resource efficiency, and investing in sustainable AI development to curb rising electricity demand from data centres. With targeted funding and support, these areas could unlock the changes needed to deliver climate goals. In this vein, we set out below some key SR announcements related to the circular economy, net zero and climate action – reflecting on how far these will go in delivering the change needed.

Big boost for nuclear, energy efficiency and low-carbon energy infrastructure

From home insulation to nuclear power and green technology, the Government has made its position clear in the spending review – energy and decarbonisation are a priority. The Department for Energy Security and Net Zero (DESNZ), secured a 16% boost in overall departmental spending – more than any other department[1][2]. The SR has emphasised that the increase is essential to securing “the UK’s electricity system with homegrown, clean power by 2030”[3].

Major investments include

• £14.2bn to build the Sizewell C nuclear plant, jointly owned by the UK Government and EDF Energy, which will help to deliver an estimated 10,000 new jobs, including 1,500 apprenticeships and power the equivalent of six million homes[4][5].
• £2.5bn for the development of small modular reactors (SMR’s) in partnership with Rolls Royce. SMRs are smaller-scale nuclear plants typically faster,and in theory cheaper, to construct than traditional plants[6].
• £2.5bn to build a world-first prototype fusion power plant, on the site of a former coal-fired power station in Nottinghamshire, as part of the government funded STEP STEP (Spherical Tokamak for Energy Production)
• £9.4bn for carbon capture and storage (CCS) projects, including support for Shell’s Acorn project in Aberdeenshire and Harbour Energy’s Viking project in Humberside[7].
• £13.2bn for the Warm Homes Plan to improve energy efficiency in homes, as set out in Labour’s manifesto.

Clean energy will be central to the UK’s future growth and resilience, and the additional investment into carbon capture and storage technologies is particularly welcome given the crucial role of these technologies in blue hydrogen production and sustainable energy from waste generation. Looking ahead, there is an opportunity to transform waste into a zero – or even negative – emissions energy source, contributing to the actual removal of greenhouse gases from the atmosphere, and providing a supply of clean energy[8]. These innovative processes are already under development at UCL, and have shown how waste can be transformed into higher value products such as aviation fuel and biogas, making them powerful tools on the path towards net zero.

Alongside this, there is a need to focus on sustainable AI systems development – given the UK’s ambition to become an AI superpower and the legally binding target to reach net zero by 2050. The SR’s prioritisation of Research and Development funding, and investment in a new supercomputer in Edinburgh; are both important steps in progressing the UK’s position as an AI leader. However, a focus on energy efficient, alternative computing systems like neuromorphic computing – where the UK already has considerable academic expertise – is needed. We look forward to more detail on how the UK plans to consolidate its computing power in the upcoming Compute Strategy.

Investment in flood defences welcome, but broader heat and flooding still needed

As climate-related impacts such as flooding intensify, enhancing the resilience of the UK’s infrastructure is critical. Flooding causes significant damage and infrastructure investment needs to be targeted to alleviate high risk areas. Thus, the Chancellor’s £4.2bn commitment to build and maintain flood defences over the next three years is an important step forward.

However, heat adaptation received little attention in the SR – despite costing the UK’s economy an estimated £260-300million per year, leading to service disruption, overheating and excess deaths[9]. A recent inquiry by the Environmental Audit Committee has shown the need for a comprehensive national heat resilience strategy and a national cooling action plan to increase the UK’s preparedness to a changing climate. This can be done by investing in cooling systems that support decarbonisation and don’t rely on energy consumption – such as nature-based solutions that provide effective cooling while also delivering co-benefits for health, wellbeing and biodiversity.

Waste management and circular economy received little attention

The Spending Review made surprisingly limited reference to waste management or circular economy initiatives. The most notable commitment is funding for local authorities to deliver Simpler Recycling as part of the Collection and Packaging waste reforms to help boost recycling across the UK.

As our recent policy brief has shown, adopting circular economy approaches is essential to reducing greenhouse gas emissions, preserving scarce and critical raw materials and increasing the resilience of our supply chains, particularly in high-emitting sectors such as construction. This includes investing in the underlying infrastructure to make reuse and reduce possible such as marketplaces for secondary, recycled or surplus materials. Research from the Circular Economy Centre for Construction Materials (ICEC-MCM) has highlighted how fiscal incentives need to align with circular economy goals to support a green transition – for example, the current lower rate of Landfill Tax at just c. £3 per tonne, does little to discourage cheap disposal of inert materials. The current HM Treasury consultation on reform of Landfill Tax therefore presents a valuable opportunity to align fiscal incentives with circular economy goals, and support materials to move up the waste management hierarchy.

Final Thoughts

The 2025 Spending Review marks a promising step toward making the UK’s net zero ambitions a reality, particularly through its investment into clean energy and low-carbon infrastructure. However, it is essential that policy design and the delivery of major initiatives – such as planning reform – are approached in a way that fully embeds circular economy principles to genuinely support environmental goals. The forthcoming Circular Economy Strategy being developed by the Circular Economy Taskforce, will set out plans to reduce waste across key sectors of the economy and improve resource efficiency. We look forward to seeing the strategy and supporting its delivery and implementation.

 

Acknowledgements

Written by Aleyna Prokudina, Policy Adviser at the Policy Impact Unit.

With thanks to Rupen Kalsi, Policy Adviser, and Poli Pencheva, Research Manager for their valuable support and comments throughout the writing of this piece.

References

1. https://www.gov.uk/government/publications/spending-review-2025-document/spending-review-2025-html
2. https://www.carbonbrief.org/uk-spending-review-2025-key-climate-and-energy-announcements/
3. https://www.theguardian.com/politics/2025/jun/11/spending-review-2025-who-are-the-winners-and-losers
4. https://www.theguardian.com/environment/2025/jun/12/reeves-review-shows-labour-plans-to-take-on-the-right-over-net-zero
5. https://gridbeyond.com/spending-review-key-climate-and-energy-announcements/
6. https://commonslibrary.parliament.uk/research-briefings/cbp-10276/
7. https://www.gov.uk/government/news/rolls-royce-smr-selected-to-build-small-modular-nuclear-reactors
8. https://www.upstreamonline.com/carbon-capture/uk-announces-backing-for-two-new-carbon-capture-projects/2-1-1831462
9. https://www.politico.eu/article/great-british-energy-budget-small-modular-reactors-nuclear-power/
10. https://www.fwi.co.uk/news/farm-policy/spending-review-defra-funding-higher-than-expected
11. https://www.lse.ac.uk/granthaminstitute/publication/turning-up-the-heat/#:~:text=The%202022%20heatwaves%20were%20associated,260%E2%80%93300%20million%20per%20year.
12. https://www.youtube.com/watch?v=9YNZEG_coO4
13. https://labour.org.uk/change/make-britain-a-clean-energy-superpower/
14. https://resource.co/article/spending-review-sidelines-waste-resources-sector-defra-faces-major-budget-cuts
15. https://www.energy.gov/ne/articles/4-key-benefits-advanced-small-modular-reactors
16. https://pubmed.ncbi.nlm.nih.gov/38000195/
17. https://committees.parliament.uk/publications/43103/documents/214494/default/
18. https://www.sepa.org.uk/regulations/waste/waste-electrical-and-electronic-equipment-weee/
19. https://www.upstreamonline.com/carbon-capture/uk-announces-backing-for-two-new-carbon-capture-projects/2-1-1831462

Footnotes

[1] https://www.theguardian.com/environment/2025/jun/12/reeves-review-shows-labour-plans-to-take-on-the-right-over-net-zero

https://www.theguardian.com/politics/2025/jun/11/spending-review-2025-who-are-the-winners-and-losers

[2] https://www.carbonbrief.org/uk-spending-review-2025-key-climate-and-energy-announcements/

[3] https://www.gov.uk/government/publications/spending-review-2025-document/spending-review-2025-html#growth-and-clean-energy

[4] https://www.essexchambers.co.uk/thousands-of-jobs-created-as-sizewell-c-investment-announced/#:~:text=10%2C000%20jobs%2C%20including%201%2C500%20apprenticeships,’golden%20age’%20of%20nuclear 

[5] https://www.gov.uk/government/news/thousands-of-jobs-to-be-created-as-government-announces-multi-billion-pound-investment-to-build-sizewell-c#:~:text=The%20equivalent%20of%20around%20six,and%20kick%2Dstarting%20economic%20growth

[6] https://www.energy.gov/ne/articles/4-key-benefits-advanced-small-modular-reactors

[7] https://www.upstreamonline.com/carbon-capture/uk-announces-backing-for-two-new-carbon-capture-projects/2-1-1831462

[8] https://pubmed.ncbi.nlm.nih.gov/38000195/

[9] https://www.lse.ac.uk/granthaminstitute/publication/turning-up-the-heat/#:~:text=The%202022%20heatwaves%20were%20associated,260%E2%80%93300%20million%20per%20year.

If anyone wants an overview of current S&T policy in the UK at the moment, you could do a lot worse than listening in to a recent discussion hosted by the Foundation of Science and Technology. Panellists were Sir Patrick Vallance, Chief Government Scientific Advisor and National Technology Adviser, Dame Ottoline Leyser, Chief Executive of UKRI, Naomi Weir, Programme Director, Innovation at the Confederation of British Industry and Professor James Wlisdon, Director of Research on Research, University of Sheffield. A fantastic lineup and a conversation that touched on many complexities of science, technology and innovation policy.  The importance of engineering policy was mentioned as part of the overall picture but much less was said about this, which is a pity[1].

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Dr Leonie Maria Tanczer, Lecturer at UCL STEaPP, reflects on her experience having participated in Internet Society’s Next Generation Leaders (NGL) e-Learning programme and makes a case for why the governance of the Internet should matter to all of us.

In my role as Lecturer in International Security and Emerging Technologies at UCL, I teach on the “Digital Technologies and Policy” specialisation for our Master’s in Public Administration. I am, thus, used to explaining the technical foundations, policy dilemmas, and stakeholders that make the Internet the kind of infrastructure we love and also rely on. Nevertheless, when the call to apply for the Internet Society’s Next Generation Leaders (NGL) programme hit my inbox, I felt compelled to sign up. I mean, who wouldn’t want to learn more about our beloved tool?!

What is the Internet Society?

The Internet Society is one of the core actors within the larger Internet ecosystem. Inititially, members of the Internet community were predominantly linked to US universities, where they developed technical standards and established the Internet’s basic functionality. However, over the last decade, the range of stakeholders involved in keeping the Internet up and running has significantly expanded. Nowadays, governments as much as the private sector, civil society, and intergovernmental organisations are engaged in “governing” the Internet.

In particular the so-called “technical community” – which the Internet Society is part of – is concerned with maintaining and advancing the underlying architecture for the Internet, including protocols such as IPv6, standards, and other software and hardware specifications. Together with actors such as the Internet Engineering Task Force (IETF), Regional Internet Registries (RIR), or the Internet Corporation for Assigned Names and Numbers (ICANN), the Internet Society is active in furthering the success of the Internet and promoting the Internet core values (such as openness, access, and end-to-end connectivity). Whilst these activities are of profound importance and matter to each of us (because we want to browse faster, safer, and cheaper!), the “average” Internet user may not have heard of them.

To counteract this information vacuum, the Internet Society’s NGL e-Learning programme aims to helps professionals aged 20-40 learn the core elements of the Internet’s history, governance, policy principles, and actors. The four-week-long course is foundational (which gave me the perfect opportunity to test my knowledge) and open to individuals from around the globe. In many ways, the offering aids the Internet Society’s aspiration to foster “capacity building” and provides interested parties with an ability to dip their toe into the 101 of Internet Governance.

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Blog by Zoey Barthelemy, MPA Candidate in UCL STEaPP

Policy forums act as a platform for different stakeholders to exchange, learn, and most importantly build trust. Most policy platforms are issue-based with support from both political and civil society actors with a stated objective.

When it comes to internet governance, policy forums are a very important element for the multi-stakeholder governance system. The main policy forum each year is the Internet Governance Forum (IGF). A series of policy forums take place in the lead up to each year’s IGF to foster trust, discussion, and exchange among the different communities. This year I had the opportunity to participate in an internet governance policy forum, EuroDIG 2019, as part of the annual YOUthDIG fellowship program.

What is EuroDIG and YOUthDIG?

EuroDIG is a Pan-European dialogue on internet governance (IG) that aims to be more than a conference but a year-round ongoing platform for discuss. This year was the 13th edition, which took place at the World Forum The Hague in The Netherlands from 19 – 20 June. The theme this year was “Cooperating in the Digital Age” to highlight opportunities for multi-stakeholder process.

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