The UK government has pledged £6.6 billion through the British Business Bank to support innovation, entrepreneurs and high-growth sectors as part of its new Industrial Strategy. Business and Trade Secretary Jonathan Reynolds announced the flagship Industrial Strategy Growth Capital initiative, which will deliver £4bn in funding to scale-ups in eight key sectors including advanced manufacturing, clean energy, […]
The UK government has pledged £6.6 billion through the British Business Bank to support innovation, entrepreneurs and high-growth sectors as part of its new Industrial Strategy.
Business and Trade Secretary Jonathan Reynolds announced the flagship Industrial Strategy Growth Capital initiative, which will deliver £4bn in funding to scale-ups in eight key sectors including advanced manufacturing, clean energy, digital, and life sciences.
The initiative also aims to unlock a further £12bn in private investment, bringing total funding for innovative smaller businesses to £16bn over four years.
An additional £2.6bn will be deployed through the British Business Bank under the latest Spending Review. This capital will support entrepreneurs “wherever and whoever they are,” with a focus on UK Nations, regions, and emerging innovation clusters.
British Business Bank CEO Louis Taylor welcomed the announcement and wider reforms to the Bank’s governance and financial framework. “We have a critical role to play in helping smaller businesses in growth-driving sectors to scale and stay in the UK,” he said.
He emphasised the importance of inclusive access to capital: “To deliver the government’s growth mission, it is critical that our most promising entrepreneurs can access the finance they need, no matter their background or location.”
The bank, already the UK’s largest investor in venture and venture growth capital funds, will be able to make direct investments of up to £60 million in innovation-led scale-ups.
It also plans to co-develop new financial products tailored to priority sectors, including potential investment in the UK’s growing AI industry to keep scale-ups anchored in the country.
To address regional disparities, the bank will launch two new Nations and Regions Investment Funds totalling £350 million, focused on the East and Southeast of England.
These will target local finance gaps and boost regional innovation ecosystems. A further £100 million will go into expanding existing innovation clusters, and the Regional Angels Programme will grow to improve early-stage equity access outside traditional hotspots.
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The announcements come alongside broader Industrial Strategy plans, including exemptions from green energy levies that could cut bills by up to 25% for more than 7,000 energy-intensive firms. R&D investment is set to rise to £22.6bn a year by 2029–30, with £2bn earmarked for AI development.
Other measures include a £1.2bn annual boost to skills funding by 2028–29, and reforms to attract “elite global talent” through changes to visas and migration rules.
Cisco UKI chief executive Sarah Walker praised the strategy and stressed the need for swift execution. “Technology will play a pivotal role in its success,” she said, adding that AI adoption must be matched by inclusive upskilling to avoid widening economic gaps.
According to Cisco’s UK AI Readiness Index, only 10% of UK organisations are fully prepared to harness AI, while 86% say they have less than 18 months to act before falling behind.
“AI is primarily a people challenge,” Walker added. “Every role—from IT to marketing—will soon require AI literacy.”
