Spring Statement 2025 – a defensive play or offensive push for growth?
James Pinchbeck, partner at Streets Chartered Accountants, reflects on the Spring Statement.
In delivering her first Spring Statement, Chancellor Rachel Reeves made it clear that this government intends to follow the principle of a single annual Budget, with major tax changes reserved for the Autumn. The Spring Statement, instead, is positioned as a fiscal checkpoint, a chance to update the nation on the economic outlook and to adjust financial levers as needed.
For many businesses and individuals, the most immediate takeaway will be relief in that there were no further tax increases. That said, there was also no reversal of previous tax hikes, nor any uplifting announcements such as increases to the personal allowance or adjustments to frozen tax thresholds. Those hoping for fiscal giveaways will have found little to cheer about.
As anticipated, the Chancellor’s focus was on tightening public spending. With the UK economic growth forecast for 2025 revised downward from 2% to just 1%, the pressure is on to rebalance the books. Lower than expected tax revenues and rising borrowing costs have left the Treasury with less fiscal headroom, prompting action.
The Chancellor cited global geopolitical tensions and instability as major headwinds, but much of the UK’s stagnation has been homegrown with a combination of suppressed consumer confidence and cautious business investment. Households continue to grapple with the cost-of-living crisis, while employers face increased staffing costs, notably from the rise in National Insurance contributions from 6th April.
Public sector reform, transformation or austerity 2.0?
A key announcement was the creation of a £3.25bn Public Sector Transformation Fund, aimed at shrinking the size of the state and boosting productivity through AI and digital innovation. This includes structural changes such as the dissolution of NHS England, in an effort to cut costs and improve decision-making.
There will also be further tightening of welfare budgets, with cuts to Universal Credit and other support mechanisms flagged as part of the savings drive.
A defence led growth strategy?
Perhaps the most headline grabbing shift is the government’s framing of defence spending as an economic growth strategy. With £400m earmarked for defence innovation, particularly in AI and drone technology and a commitment to increasing defence investment as a percentage of GDP, the Chancellor declared her ambition to make the UK a “defence industrial superpower.”
To complement this, capital spending commitments will continue with a £2bn increase, alongside a renewed push to meet housing targets and accelerate homebuilding. Whether this marks a bold new direction for economic strategy or a reactive shift to global instability remains to be seen. What’s clear is that growth is now expected to come from defence procurement and infrastructure investment, rather than tax cuts or consumer led stimulus.
As ever, the effectiveness of this strategy will depend not just on the vision, but the execution. Businesses, investors and households alike will be watching closely.
For the devil in the detail and tax planning advice for 2025/26, including managing the increase in employer’s national insurance, there is still time to book for Streets Chartered Accountants’ post Spring Statement webinar which takes place from 11am until 12noon on Thursday 27th March. Watch live or on catch up!
Register to join live and/or to receive a post broadcast recording to watch on catch up.
https://www.streetsweb.co.uk/about/events/the-spring-statement-2025-what-will-it-mean-for-you/
Chesterfield packaging manufacturer reports “substantial sales growth” in 2024
Robinson, the custom manufacturer of plastic and paperboard packaging, has reported “strong progress” for 2024, in its audited results for the year.
Revenue at the firm jumped 14% to £56.4m, up from £49.7m in 2023, while underlying operating profit increased to £3.2m, from £2.2m.
The business, meanwhile, posted a loss before tax of £3.8m, expanding from £0.7m in 2023, as a result of non-cash and non-Company costs of £3.7m related to the buy-out of the defined benefit pension scheme and a non-cash impairment charge of £1.7m related to start up issues at the company’s Denmark operation. Interventions, however, are delivering improvements and expected to return the operation to profitability in 2025.Alan Raleigh, Chairman, said: “I am pleased to report strong progress in 2024. Our results build on the positive momentum experienced in the second half of 2023, with substantial sales growth of 14% to £56.4 million, gross margin increasing to 20% and a 45% increase in underlying operating profit to £3.2 million.
“This confirms that our strategy of partnering with major FMCG brand owners, investing in new technology, driving efficiencies, and supplying sustainable packaging is delivering the anticipated results.
“Our excellent customer relationships have created a very strong sales pipeline for 2025, and as our customers respond to new market opportunities, we see additional growth potential in future years. As we grow revenue and underlying volumes, we will continue to drive improved efficiency and profitability across our operations.
“The underlying performance of the business gives the Board confidence to recommend an increase in the final dividend to 3.5p per share. This brings the total dividend declared for 2024 to 6.0p (2023: 5.5p).
“Progress has also been made on the buy-out of the defined benefit pension scheme, but the closure of the scheme has resulted in a non-cash and non-Company cost of £3.7m included in our income statement (required by accounting standards despite no impact on shareholders’ funds).
“The disposal of surplus properties, with some sales expected to complete in 2025, will further improve our financial leverage and ability to support attractive growth projects.
“Finally, despite strong progress in H2 2024, there is a non-cash impairment charge of £1.7m related to the Denmark operation due to start up issues earlier in the year associated with processing post-consumer recycled resin, demand variability and a longer learning curve than anticipated on the large project implemented there.
“Pleasingly, interventions during the second half of 2024 are already delivering improvements and are expected to return that operation to profitability in 2025.
“In combination, these other items have resulted in a Group loss before tax of £3.8m (2023: loss before tax £0.7m).
“Despite these non-recurring items, the combination of volume and revenue growth, efficiency and profitability gains, improved financial leverage and new leadership, gives the Board confidence that we are well placed to compete and win.
“As such, we expect underlying operating profit for the 2025 financial year to be ahead of 2024, and ahead of current market expectations. We remain committed to delivering above-market profitable growth and our target of 6-8% underlying operating margin.”
Former bank and bar in Daventry could be converted into apartments
If planning approval is granted, a former Halifax bank and the adjacent Retro Bar in Daventry could be redeveloped into nine apartments. The site, located at the corner of High Street and New Street, is owned by Achrom Limited, which has submitted a proposal to convert the upper floors into residential units while retaining the former bank’s ground floor for commercial use.
The plans include four one-bedroom and five two-bedroom flats, replacing the 17-room HMO setup. To improve the exterior, proposed changes to the building include reopening blocked windows, installing new doors, and repairing or replacing broken windows. Due to its central location and access to local amenities, the development will not include on-site parking.
The project aims to bring the long-vacant building back into use, addressing concerns over its deteriorating condition and its impact on the town’s appearance. The proposal is open for public consultation, with a final decision expected by the end of April.
Kettering hospital secures £713k for solar panel installation
Kettering General Hospital (KGH) has received £713,000 in funding to install over 1,000 rooftop solar panels, which is expected to reduce energy costs by approximately £150,000 annually.
The investment is part of the initial phase of nationwide funding from Great British Energy, the Labour government’s new state-owned energy company. It is separate from KGH’s planned £57 million energy centre project and the hospital’s scheduled rebuild between 2032 and 2034.
The hospital estimates savings of around £3 million from the solar panels. Nationally, the programme is projected to save the NHS £8.6 million per year and up to £260 million over the panels’ lifespan.
Sales soar at Next
Enderby retailer Next has seen profit and sales soar in the year to January 2025.
The company saw total group sales of £6.3bn, up from £5.8bn in the year prior. Meanwhile, pre-tax profits passed £1bn, growing from £918m.
Maintaining this momentum, full price sales in the first eight weeks of the year have been ahead of Next’s expectations, seeing the business upgrade its financial guidance for the year to January 2026.
The firm has now put full price sales guidance for the first half to be up 6.5% (from 3.5%), resulting in sales for the full year being up 5% (from 3.5%). Moreover, pre-tax profit guidance has increased by £20m to £1.066bn, up 5.4%.
Microlise delivers record performance
Microlise Group, a provider of transport management software to fleet operators, has hailed “strong” results for 2024, delivering a record performance.
Revenue at the Nottingham-based firm grew to £79.5m, according to audited results, increasing from £71.7m in 2023. Meanwhile, adjusted profits increased 16% to £6.5m.A cyber incident cost the business £4.4m, though this is expected to be covered in full by cyber security insurance.
The year further saw over 375 new customers, including companies such as GSF, Woolies, STAF and FSSI, and 52 contracts were renewed, including JCB, Bidfood, Sainsbury’s and Cemex.
Microlise also experienced strong international growth with new direct customers secured in Australia, New Zealand and France.
Nadeem Raza, CEO of Microlise, said: “Microlise delivered record performance in FY24, exceeding market expectations in cash levels and adjusted EBITDA which is reflective of our comprehensive growth strategy and continually improving customer offerings. We have continued to secure major customer contracts and have renewed our longstanding partnerships with longstanding customers such as JCB.
“Toward the end of the year, the hard work of the Microlise team and our previous commitment to cyber security ensured that we successfully navigated a cyber security incident, loosing no customers and we have continued to build and convert our new business pipeline.
“We remain focused on improving our customer offering and expanding our international business in key geographies such as Australia, New Zealand and France. Our strong pipeline, paired with our growing international footprint gives us much to look forward to in 2025 and I would like to thank everyone at Microlise for their hard work in the period.”
Nottingham City Council puts focus on long-term financial stability
Nottingham City Council’s Corporate Scrutiny Committee met yesterday (26 March) to review progress on the Council’s multi-year Improvement Plan.
The Council reported that most of its eleven key programs are currently on-track. This positive news comes alongside its recent approval of the five-year Council Plan and confirmation of the Council’s current financial stability.
While making strides forward, it has been highlighted that the Council needs to keep working on two specific areas: ensuring ongoing financial sustainability (Programme 4) and strengthening financial management (Programme 5).
The Council claims to have already taken “strong steps” to address these through its finance improvement plan, for example now having healthy reserve funds, an improving financial performance, and its 2024/25 general fund spending anticipated to be very close to its budget.
Looking ahead, the Council has significantly reduced its budget gap for 2025/26 to approximately £20.79 million – an improvement from the £41 million gap faced in 2024/25, and this gap is expected to shrink further.
The Council added: “With our finances now stable, we’re focusing on achieving full financial sustainability. This will involve successfully implementing our planned transformation program, with a key goal of having a completely balanced budget by 2027/28.”
Multi-million pound enterprise hub prioritises all-electric development
Independent construction and property consultancy Edmond Shipway has been appointed to provide mechanical and electrical (M&E) consultancy services for a multi-million pound enterprise hub building in Stapleford, Nottinghamshire, called the Pencil Works.
The multi-use hub will comprise of seven ground-floor starter units which will be occupied and fitted out by local businesses, as well as office spaces on the upper floors that will be rented out by Broxtowe Borough Council.
Edmond Shipway was appointed in a joint bid with Maber Architects following the successful completion of the Arnold Market Place, a similar scheme that the two worked on together under Gedling Borough Council. Having recently received planning permission, the project is due to start on site in May and is expected to complete in 2026.
Josh Croft, director at Edmond Shipway, said: “It’s always rewarding to work on projects that benefit the community, and the Pencil Works is no exception, delivering vital business and retail space that prioritises small businesses and enables them to get a foot on the ladder.
“We’re working closely with the Stapleford Towns Fund team at Broxtowe Borough Council, as well as Maber Architects on what will be a fantastic space for local people and businesses to enjoy together.”
As part of the project, the team at Edmond Shipway carried out energy modelling to predict the energy consumption of the all-electric building. Adopting a fabric-first approach, the hub will utilise heat pumps, mechanical ventilation with heat recovery, and high efficiency LED lighting, while solar PV panels will also be installed on the roof.
Funded through the £21.1m Stapleford Towns Fund, the hub is expected to create 50 jobs and 1,000 square metres of new retail, leisure and office space, including spaces for specialist craftspeople and artists, retail units for food and drink outlets, and flexible office space for small businesses. Disabled parking, bicycle storage and public toilets are also included in the plans.
Emma Georgiou, head of environment at Broxtowe Borough Council, said: “Our new Pencil Works building exemplifies our commitment to sustainability.
“With a fabric first approach and all electric systems, we are utilising heat pumps, solar panels and LED lighting to minimise the building’s carbon footprint. The project showcases our focus on energy efficiency and the council’s proactive role in mitigating climate change.”
Greencore renews takeover bid for Bakkavor
Greencore has made a third takeover bid for rival food supplier Bakkavor after its previous £1.1 billion offer was rejected earlier this month. The latest proposal values Bakkavor at 189p per share, offering a 25% premium on its market price.
The offer includes 85p in cash per share and 0.523 Greencore shares, with Bakkavor shareholders also eligible for a 4.8p dividend. If accepted, Greencore shareholders would own 59.8% of the combined company, while Bakkavor investors would hold 40.2%.
Both companies are major UK food manufacturers, supplying ready meals and food-to-go products to supermarkets. Greencore, headquartered in Ireland with a UK base in Worksop, turned over £1.8 billion last year and operates 14 factories nationwide. Bakkavor, which generated £2.3 billion in revenue in 2024, runs 20 factories and four distribution centres. The company has faced supply chain disruptions, including a strike at its Spalding site that led to shortages of dips, soups, and wraps.
Bakkavor’s board has rejected Greencore’s offers, stating they undervalue the company and its prospects. Greencore said it remains open to strategic opportunities but has not confirmed whether it will make a firm offer.
Anglian Water expands emergency water supply capacity in East of England
Anglian Water has signed a new three-year agreement with emergency water supplier Water Direct to enhance rapid-response water deliveries across East England. The deal ensures up to 20,000 emergency water deliveries per year for households on Anglian Water’s Priority Services Register (PSR), which supports vulnerable customers during supply disruptions.
The partnership, which dates back to 2008, increases Anglian Water’s reserves in Water Direct’s Nationwide Bottled Water Bank (NWBW) for faster emergency response. Water Direct has committed to delivering water to at least 2,000 households within 24 hours when required.
The agreement aligns with regulatory changes expected to expand the number of customers eligible for PSR support by up to 40%. By outsourcing emergency deliveries, Anglian Water can reallocate internal resources to focus on resolving supply issues, improving operational efficiency.
Water Direct is also developing a technology platform to enhance real-time tracking, customer data verification, and delivery management, ensuring more efficient and transparent emergency water distribution.
