Chancellor Rachel Reeves announced her Spending Review this week, outlining what the Government will be investing in and funding over the next three to four years. Spending reviews make headlines because they’re relatively rare events in Whitehall; the last review took place during the height of the pandemic, and the one before that was held in 2015.
Broadly, defence, transport, and energy were the three big ‘winners’ from Reeves’ review, and many SMEs will be wondering what all this means for their business. At Shire Leasing, we’re driven to help UK businesses with tailored asset finance solutions that help them navigate the country’s economic waters. Here, we’ll break down the Spending Review before explaining why asset finance might well be the solution for you.
While these are certainly of note, it's not the sort of direct funding that SMEs may have been hoping for from Rachel Reeves. However, the knock-on effects from these sorts of investments are likely to be felt by British businesses in the coming years.
One example is the expansion of supply chains as a result of new infrastructure projects. Another is a likely increase in demand for modern equipment and tech across sectors aligned with government priorities, such as clean energy, transport, and digital infrastructure.
Even before the Spending Review, SMEs have operated in a cautious lending environment. Spending reviews, as with budget announcements, bring all this back into sharp focus, providing businesses with an opportunity to reassess their capital infrastructure. Just because borrowing is difficult doesn’t mean the need to upgrade, digitise and improve efficiency has gone away.
The Government sees UK infrastructure, in particular, as a key priority over the next three to four years, and this opens up opportunities for firms that have the right assets and infrastructure in place to capitalise by obtaining significant contracts. This is where leasing can come in. A smarter option than traditional loans, leasing offers a flexible route to growth without upfront capital strain.
As the effects of the Spending Review spread to the UK economy over the next 12 to 36 months, SMEs need to be ready to win contracts and take advantage of opportunities created by Government-backed projects.
As well as being able to use the assets to grow, the budgeting benefits of leasing are just as beneficial for UK SMEs. The fixed payments allow for predictability when budgeting for the months ahead, and when the agreement is up, a business can either choose to own the equipment outright or renew the lease to access newer assets.
In terms of how this relates to the Spending Review, asset finance enables SMEs to harness the growth opportunities that will come about as a result of government investment. They can comfortably bid for new projects, knowing they have a partner on hand who can help them access the equipment they need, or upgrade existing equipment to meet new sustainability regulations and efficiency standards, both of which are increasingly important when competing for contracts.
All this can be achieved without needing to struggle with upfront costs or spending time applying for grants.
The Chancellor has laid out a vision. And, whatever your view of the review itself, one thing is clear: perfect conditions never arrive. Waiting for them will mean missed opportunities. Businesses rarely get the luxury of clarity or certainty, which is why adaptability and proactive investment matter more than ever. Leasing can help ensure you don’t miss those opportunities and that you’re agile enough to navigate uncertain economic periods.
As a business, you can show leadership and stability in your sector by investing in assets that come with manageable, predictable financial risk. With the latest assets in place, you can grow your business and take advantage of the infrastructure projects happening around the UK, be they in energy, transport, or housing.
Partnering with an experienced finance provider, such as Shire, who has seen many spending reviews and plenty of economic turmoil, can help further ensure long-term stability for your business.
The Spending Review, as they often do, presents both challenges and opportunities. It's those SMEs that move smartly and invest in their infrastructure through more suitable means of investment who will be best placed to take advantage.
If you think your finance options are due for a review, get in touch with Shire Leasing to discuss how we can help today.