Spending Review: £ Billions to back Scottish jobs

UK Government’s Plan for Change delivers record settlement for Scottish Government with an extra £9.1 billion over the SR period to deliver public services

Working people across Scotland will benefit from significant investment in clean energy and innovation, creating thousands of high-skilled jobs and strengthening Scotland’s position as the home of the United Kingdom’s clean energy revolution.  

The UK Government has confirmed £8.3 billion in funding for GB Energy-Nuclear and GB Energy in Aberdeen. This is alongside an increased commitment to the Acorn Carbon Capture, Usage and Storage project, which will receive development funding.

The Spending Review, outlined yesterday, Wednesday 11 June, announces targeted investment in Scotland’s most promising sectors to grow the economy and put more money in working people’s pockets.  It delivers an extra £9.1 billion over Phase 2 of the Spending Review, through the Barnett formula.

The government also confirmed £25 million for the Inverness and Cromarty Firth Freeport.   

These investments are part of a wider package, with funding for hydrogen production projects at Cromarty and Whitelee.

Secretary of State for Scotland, Ian Murray, said:  “Putting more money in the pockets of working Scots by investing in the country’s renewal is at the heart of this Spending Review and our Plan for Change.

“The Chancellor has unleashed a new era of growth for Scotland, confirming billions of pounds of investment in clean energy – including new development funding for Acorn – creating thousands of high-skilled jobs.

“Scotland’s leading role at the heart of UK defence policy has been strengthened and there is also significant investment in our trailblazing innovation, research and development sectors.

“And the Scotland Office will work with local partners to ensure hundreds of millions of pounds of new targeted support for Scottish communities and businesses goes to projects that matter to local people. This means that the UK Government is now investing almost £1.7 billion in dozens of important growth schemes across Scotland over 10 years.

“To maximise the benefit of recent trade deals with India, US and the EU we are continuing the Brand Scotland programme to promote inward investment opportunities boosting Scottish exports of our globally celebrated products.

“And we are delivering a record real-terms funding settlement for the Scottish Government with an extra £9.1 billion over the Spending Review period through the Barnett formula. That’s more money than ever before for them to invest in Scottish public services like our NHS, police, housing and schools.

“This is a historic Spending Review for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.”

Investment in Scotland to strengthen UK defence  

Speaking in the House of Commons yesterday, the Chancellor reaffirmed the government’s commitment to increase defence spending to 2.6% of GDP by April 2027, backing our Armed Forces, creating British jobs in British industries, and prioritising the security of Britain when it is most needed.  

The long-term future of the Clyde is secured through an initial £250 million investment over three years which will begin a multi-decade, multi-billion pound redevelopment of HM Naval Base Clyde through the ‘Clyde 2070’ programme.   

Investing in innovation and R&D  

Scotland will also become home to the UK’s largest and most powerful supercomputer, with up to £750 million committed to its development at Edinburgh University. This world-class facility will give scientists across all UK universities access to extraordinary computer power, further strengthening Scotland’s research and innovation capability.   

The UK Government is backing Scottish industry with a share of increased UK-wide R&D spending set to grow from £20.4 billion in 2025-26 to over £22.6 billion per year by 2029-30. Scotland will also benefit from a £410 million UK-wide Local Innovation Partnerships Fund.  

Targeted support for Scottish communities   

The government is also investing £160 million over 10 years for Investment Zones in the North East of Scotland and in Glasgow City Region, and confirming £452 million over four years for City and Growth Deals across Scotland.  

A £100 million joint investment for the Falkirk and Grangemouth Growth deal with the Scottish Government (£50 million from UK Government and £50 million from Scottish Government), demonstrating the UK Government’s continued commitment to the Grangemouth industrial area.  

A new local growth fund, and investments in up to 350 deprived communities across the UK, will maintain the same cash level as in 2025-26 under the Shared Prosperity Fund. The Ministry of Housing, Communities and Local Government and the Scotland Office, will work with local partners and the Scottish Government, to ensure money goes to projects that matter to local people. This investment will help drive growth and improve communities across Scotland.  

Supporting Scottish businesses  

The National Wealth Fund (NWF) is trialling a Strategic Partnership with Glasgow City Region to provide enhanced, hands-on support to help it develop and finance long term investment opportunities. The NWF has already made its first investment in Scotland with £43.5 million in direct equity for a sustainable packaging company, which is to build its first commercial-scale manufacturing facility near Glasgow.  

Through its Nations and Regions Investment programme the British Business Bank is delivering £150 million across Scotland to break down access to finance barriers and drive economic growth.  

The settlement also allocates £0.75 million each year to champion our ‘Brand Scotland’ trade missions to promote Scotland’s goods and services on the world stage and to encourage further growth and investment.

A record settlement for Scottish public services   

The Government has been clear that local decision-making against local priorities is central to delivering growth.   

The Scottish Government will receive the largest real terms settlement since devolution began in 1998, with an average £50.9 billion per year between 2026-27 and 2028-29, enabling the Scottish Government to deliver for working people in Scotland.  This includes £2.9 billion per year on average through the operation of the Barnett formula, with £2.4 billion resource between 2026-27 and 2028-29 and £510 million capital between 2026-27 and 2029-30. 

This investment and record settlement is made possible by the ‘tough but necessary’ decisions taken in the October Budget.

Edinburgh North and Leith Labour MP Tracy Gilbert has welcomed the statement. She said: “The Comprehensive Spending Review is good for Scotland’s economy and public Services.

“After several meetings with the Secretary of States for Science, Innovation and Technology and Scotland I’m so pleased to see the announcement of funding for the new Supercomputer to be based at EdinburghUniversity.

“This major investment in Edinburgh positions us at the forefront of computing, and technological innovation, not just in the UK, but globally.”

Not unsurprisingly, the Holyrood SNP Government has a number of issues with the likely impact of the Spending Review on Scotland. Post to follow …

‘Game-changing’ exascale super-computer planned for Edinburgh

Edinburgh has been selected to host a next-gen supercomputer fuelling economic growth, building on the success of a Bristol-based AI supercomputer, creating high-skilled jobs

  • Edinburgh nominated to host next-generation compute system, 50 times more powerful than our current top-end system
  • national facility – one of the world’s most powerful – will help unlock major advances in AI, medical research, climate science and clean energy innovation, boosting economic growth
  • new exascale system follows AI supercomputer in Bristol in transforming the future of UK science and tech and providing high-skilled jobs

Edinburgh is poised to host a next-generation compute system amongst the fastest in the world, with the potential to revolutionise breakthroughs in artificial intelligence, medicine, and clean low-carbon energy.

The capital has been named as the preferred choice to host the new national exascale facility, as the UK government continues to invest in the country’s world-leading computing capacity – crucial to the running of modern economies and cutting-edge scientific research.

Exascale is the next frontier in computing power, where systems are built to carry out extremely complex functions with increased speed and precision. This in turn enables researchers to accelerate their work into some of the most pressing challenges we face, including the development of new drugs, and advances in nuclear fusion to produce potentially limitless clean low-carbon energy.

The exascale system hosted at the University of Edinburgh will be able to carry out these complicated workloads while also supporting critical research into AI safety and development, as the UK seeks to safely harness its potential to improve lives across the country.

Science, Innovation and Technology Secretary Michelle Donelan said: “If we want the UK to remain a global leader in scientific discovery and technological innovation, we need to power up the systems that make those breakthroughs possible.

“This new UK government funded exascale computer in Edinburgh will provide British researchers with an ultra-fast, versatile resource to support pioneering work into AI safety, life-saving drugs, and clean low-carbon energy.

“It is part of our £900 million investment in uplifting the UK’s computing capacity, helping us forge a stronger Union, drive economic growth, create the high-skilled jobs of the future and unlock bold new discoveries that improve people’s lives.”

Computing power is measured in ‘flops’ – floating point operations – which means the number of arithmetic calculations that a computer can perform every second.  An exascale system will be 50 times more powerful than our current top-end system, ARCHER2, which is also housed in Edinburgh.

The investment will mean new high-skilled jobs for Edinburgh, while the new national facility would vastly upgrade the UK’s research, technology and innovation capabilities, helping to boost economic growth, productivity and prosperity across the country in support of the Prime Minister’s priorities.

UK Research and Innovation Chief Executive Professor Dame Ottoline Leyser said: “State-of-the-art compute infrastructure is critical to unlock advances in research and innovation, with diverse applications from drug design through to energy security and extreme weather modelling, benefiting communities across the UK. 

“This next phase of investment, located at Edinburgh, will help to keep the UK at the forefront of emerging technologies and facilitate the collaborations needed to explore and develop game-changing insights across disciplines.”

Secretary of State for Scotland, Alister Jack, said: “We have already seen the vital work being carried out by ARCHER2 in Edinburgh and this new exascale system, backed by the UK government, will keep Scotland at the forefront of science and innovation.

“As well as supporting researchers in their critical work on AI safety this will bring highly skilled jobs to Edinburgh and support economic growth for the region.”

The announcement follows the news earlier this month that Bristol will play host to a new AI supercomputer, named Isambard-AI, which will be one of the most powerful for AI in Europe.

The cluster will act as part of the national AI Research Resource (AIRR) to maximise the potential of AI and support critical work around the safe development and use of the technology.

Plans for both the exascale compute and the AIRR were first announced in March, as part of a £900 million investment to upgrade the UK’s next-generation compute capacity, and will deliver on two of the recommendations set out in the independent review into the Future of Compute.

Both announcements come as the UK prepares to host the world’s first AI Safety Summit on 1 and 2 November.

The summit will bring together leading countries, technology organisations, academics and civil society to ensure we have global consensus on the risks emerging from the most immediate and rapid advances in AI and how they are managed, while also maximising the benefits of the safe use of the technology to improve lives.