Autumn Budget: How Will Funding Affect Public Sector Tenders in 2025?

Presented at the end of October, Chancellor Rachel Reeves’s budget has introduced sweeping changes to how central and local government will spend their funding – including how this is invested in public sector bids and tenders.

The autumn budget may present clues for organisations looking to firm up their bid strategy for the coming year – we present our thoughts to some questions bidding organisations may have regarding how the budget will affect their pipeline.

What was announced in the autumn budget?

In addition to recapping GDP growth, inflation and borrowing, the budget outlined a set of measures to raise public spending, taxation and investments across critical industries.

Ultimately, measures are aimed at ‘fixing the foundations’ of the UK economy, whilst also addressing the £22 billion ‘black hole’ in budgeting claimed to have been unaddressed by the previous government.

The budget also acknowledged the Procurement Act 2023. With the implementation date now revised to February 2025, the Act will deliver value for money whilst also creating a simpler, more transparent regime for public procurement.

As per the previous entry in our series of blogs on the Procurement Act, the new government will draft a National Procurement Policy Statement to supplement and strengthen the legislation, with a consultation period closing at the beginning of last month.

Overall, the budget set out a planned increase of £69.5 billion in public spend from the 2025/26 financial year. Roughly two-thirds of this figure will go to day-to-day operational spend, while the remaining third is allocated on capital projects – including transport, housing and infrastructure.

Which sectors will benefit from increased funding?

Due to investments in public spend for day-to-day operations and capital funding alike, some sectors may see an uptick in contracts up for bid.

Infrastructure

Capital investments are heavily targeted around modernising and upgrading the country’s infrastructure. Examples in the budget involve:

• Rail upgrades for the TransPennine route between York and Manchester, with investments targeted for around Leeds and Huddersfield, and Oxford/Milton Keynes/Cambridge
• A £500 million increase in funding for local roads and highways maintenance, with an annual budget of £1.6 billion
• Digital cabling and network connectivity for rural areas of the UK, supporting the government’s ‘Project Gigabit’ to deliver full broadband coverage by 2030.

With a strategic focus on specific areas, it is likely that subcentral authorities – including local councils and combined authorities such as Greater Manchester – will benefit from funding tranches.

Construction

A key theme across the budget was ‘rebuilding Britain’ after the new government charged the previous regime with significant underinvestment. This is reflected in construction funding allocation in the budget, which includes:

• £1 billion investments to address repairs and maintenance across the NHS’s property portfolio
• £2 billion in maintenance of state-funded schools, with an additional £1.4 billion pot for school rebuilding programmes
• A £13 billion increase in capital investment over the next year, resulting in total departmental spending to £131 billion for the 2025/26 financial year.

In addition to this, the Cabinet Office have announced a £70 billion framework (run under Crown Commercial Services) for procuring all construction projects over the next seven years. Following extensive pre-market engagement, the framework is anticipated to open for bidders in January 2026.

Health and social care

The budget stipulates an increase of £22.6 billion for the Department of Health and Social Care, designed to relieve pressure on the NHS, local GP surgeries and wider social care service providers.

As a result, £600 million of new funding will be released and ring-fenced specifically to help local authorities with funding social care. This could result in a flurry of new contracts for domiciliary care, supported living and similar contracts, framework agreements and dynamic purchasing systems.

Social housing

Lastly, social and council housing was not neglected in the autumn budget, with the government emphasising significant investment in affordable and safe homes. Some examples which can be gleaned from the budget include the following:

• £1 billion investment in fire safety and security remediation works, in accordance with safe housing programmes in response to the Grenfell Tower fire incident
• Committing £3.4 billion towards heat decarbonisation and household energy efficiency over the next 3 years – mirroring large-scale decarbonisation and retrofit frameworks we have encountered recently
• A broader ‘confirmation of investment’ of over £5 billion for social housing investment for the 2025/26 financial year alone.

Tussell have included further analysis on what contracts may be released over the course of 2025.

What should bidders do in the interim?

With so many new tender opportunities due to be released, it is important to ensure you start the tender process as early as possible. We recommend the following:

• Monitor upcoming opportunities: Free-to-use government portals such as Find a Tender and Contracts Finder allow you to search by date, region and industry or sector. All contracts above a certain value threshold will be published on one of the two websites – rendering them an ideal first port of call when identifying new contract opportunities.
• Attend pre-market engagement and activities: Different contracting authorities may choose to hold pre-bid activities and events – including market engagement questionnaires, ‘meet the buyer’ events and live Q&As. This is a good opportunity to understand the requirements of the opportunity and gain further insight into what the contract will comprise.
• Create and stick to a bid strategy and plan: Alongside undertaking a diligent ‘bid/no-bid’ decision, you should implement a bid strategy for each tender you will be submitting – ensuring high-quality, competitive responses which are aligned with the question set, contract specification and the buyer’s key priorities.

Pre-bid support with new opportunities

Our pre-bid consultancy service is aimed at clients looking to gain a head start on critical tender submissions. The service is flexible to the needs and requirements of your organisation, but typically comprises:

• Identify potential priority areas by researching the authority, local area and opportunity in detail
• Begin developing key ‘win themes’ and unique selling points you can offer as part of the works or service
• Anticipate content which may be addressed for the quality questions or method statements, through ‘capture planning’ and storyboarding sessions
• Compile evidence, including photographs, previous KPI achievement and statistics to be integrated in case studies and tender responses.

If you would like to learn more about how we can support you through our pre-bid consultancy service or any other bid and tender service you require, our sales and marketing team are available for a chat or a free, no-obligation quotation at info@executivecompass.co.uk or via telephone  0800 612 5563.