The Government's 2025 Industrial Strategy on Professional Services

Earlier this year, the UK Government released its modern industrial strategy with a ten-year plan for various sectors across the economy. The plan focuses on eight  different priority sectors one of which is the Professional and Business Services (PBS) sector encompassing law, accounting, consulting, and wider business and B2B services.

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The strategy is an important step that, for the first time, recognises the contributions of the professional business services sector as a key engine of growth and sets forth concrete steps towards stimulating the industry's growth. It estimates that the sector will grow by £322 billion (~113%) in gross terms by 2035, and aims to achieve this goal through three significant overall motivators for its strategy. The first is its focus on expanding the sector's geographical scope to overseas markets and retaining its international competitiveness, The second is a focus on widening the benefits of the sector to the small medium enterprises (SMEs) who constitute 99% of the sector. And the third is a future ready strategy, which focuses on incorporating AI, technology, and sustainability into the sector's operating models - all of which are central to ensuring UK firms are the gold standard globally, in an AI-enabled professional service era.

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Maintaining The UK As The Second Largest Exporter Globally

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A central pillar of the Government’s strategy is to consolidate and maintain the UK’s global position as a leading exporter of business services. The UK already ranks as the second-largest exporter of PBS in the world, and the strategy aims to retain this position by reducing regulatory barriers, promoting the sector through its global marketing efforts and enhancing recognition of UK professional qualifications overseas. Through new Free Trade Agreements and mutual recognition frameworks, the Government seeks to ensure UK accountants, lawyers and consultants can work across borders.For UK professional and business services firms, this means new trade deals are opening more routes for their accountants, lawyers, and consultants to work and win clients abroad more easily, though many recognition agreements are still being finalised. A successful example is the UK-Canada mutual recognition agreement, where UK accountants can work in Canada with limited to no additional examinations.  

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As part of the outreach and promotion, the strategy commits to highlighting the sector in its trade delegations and providing exporters with access to advice, finance and trade support. The UK Export Finance has also been engaged by the Government to leverage its £80 billion fund towards providing finance support to overseas buyers purchasing professional and business services from the UK. Through the Office for Investment’s Strategic Investment Opportunities team, the government will help local authorities and PBS hubs attract foreign investment into areas like AI, sustainability, and emerging technologies. SMEs positioned within these clusters can benefit from proximity to larger investors and global clients.

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Empowering SMEs to Drive National Growth

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Small and medium enterprises form 99% of all PBS firms and are essential to ensuring regional development. Yet they have long faced barriers to accessing capital, technology, and markets. The second major thrust is to unlock the growth potential of these SMEs by creating supportive conditions for them to thrive. The five new PBS Hubs across the North West, Midlands, and Scotland, support the regional empowerment agenda and aims to provide tailored support for SMEs connecting them to export opportunities, investment partners, and training. Programs such as “Made Smarter for Services” will deliver hands-on assistance, offering expert mentoring and grants to help smaller firms adopt AI and sector-specific technologies like lawtech, PropTech, and RegTech.

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A particular focus of the strategy is towards improving access to finance and opening up opportunities for SMEs to secure government contracts. Under the strategy, firms engaged in professional services can access the British Business Banks £4 Billion Industrial Strategy Growth Capital. Through this initiative small businesses firms can access debt funding, and support during times of financial stress.  There is also a commitment at allowing intellectual property to be used as collateral for firms that are tech-driven. This initiative aims to address a long-standing challenge faced by startups and knowledge-intensive companies whose main assets are intangible, such as patents, trademarks, software, or data. By developing frameworks for IP valuation, lender confidence, and government-backed guarantees, the government seeks to make it easier for these firms to unlock growth capital, attract investors, and scale operations without relying solely on physical assets or cash flow history.

Public procurement represents one of the largest and most consistent sources of demand for professional and business services (PBS) firms in the UK. The UK government spends over £300 billion annually on procurement across departments, local authorities, and public bodies and a significant share of this involves professional services such as consulting, legal advice, financial auditing, digital transformation, engineering, and project management.. On private consulting alone, in 2023-24 the Government spent £3.4 Billion.  While there are attempts to reduce the spending on consulting, there is also an effort to improve access to these opportunities to SMEs.   Through improvements to the public procurement process, SMEs will be able to access a simplified bidding process, clearer contract pipelines as well as improved reporting to ensure fairness and promptness in payments. The combination of these initiatives is set to make public procurement easier to secure for SMEs too.

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Future-Readiness through Technology and AI

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The third defining ambition of the PBS Sector Plan is its future-ready agenda, preparing the sector to harness the technological shifts that are altering and reshaping business globally. Artificial Intelligence is rapidly reshaping operations in the UK’s Professional and Business Services (PBS) sector, with platforms such as Harvey and Legora streamlining both operational workflows as well as service delivery. From automating legal tasks like document drafting and contract analysis to enabling real-time financial reporting and continuous digital guidance, these AI solutions enhance both efficiency and quality of professional advice. The Government’s approach is to proactively prepare the UK’s PBS sector in not only adopting and responding to the technological changes but to also help create the global standards .

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To achieve this, the strategy introduces a range of forward-looking initiatives. A new AI Champion for PBS will drive adoption across industries, while investment in digital sandboxes and data-sharing infrastructure will create safe environments for experimentation and innovation. The expansion of the AI Skills Hub ensures that both established firms and smaller players can reskill their teams to remain competitive . Further, The government has committed over £150 million to fund five transformative AI and technology programmes under its Industrial Strategy, helping Professional and Business Services firms accelerate digital adoption and innovation. This investment is part of the “Made Smarter” plan, which targets the expansion of AI and other advanced technologies to strengthen the PBS sector’s global competitiveness and productivity. By combining innovation incentives, training pipelines, and governance, the strategy sets out a blueprint for how PBS firms across the UK can lead the next wave of global business transformation.

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The 2025 Industrial Strategy unites three powerful ambitions for the PBS sector-expanding global reach, empowering SMEs, and future-proofing through technology-into a coordinated vision that positions the UK at the forefront of professional and business services worldwide. By combining targeted export and investment support, significant regional empowerment for small businesses, and a bold agenda for AI and tech adoption, the strategy ensures the sector is not only primed for growth but able to shape international standards. The Government’s intent is clear, and is hopefully met with professional service firms engaging and utilising the various resources the government has offered.

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