Philip Hammond has outlined his plans to build an economy that is “fit for the future”. At the centre of his Autumn Budget are a series of measures aimed at protecting the UK’s tech sector after Brexit. So what are the headline announcements, and will they work?
A big new pot of money for scale-up businesses
“Today we’re publishing an action plan to unlock over £20bn of new investment in UK knowledge-intensive, scale-up businesses,” the chancellor announced. The key to unlocking that investment is the launch of a new British Business Bank fund with £2.5bn of public cash. TechUK’s deputy CEO, Antony Walker, described it as a “positive step to support tech businesses grow and scale”.
Extra funding for research and development
When Theresa May spoke to the CBI earlier this month, she devoted a big part of her speech to the importance of research and development (R&D). It’s of little surprise then that this autumn’s budget includes a £2.3bn boost for R&D. It means the UK is now on track to spending 2.4 per cent of GDP on R&D by 2027.
A £500m investment in AI, 5G and full-fibre broadband
The chancellor has earmarked half a billion pounds for nurturing the country’s AI research and boosting the UK’s digital infrastructure, with investments in 5G and full-fibre broadband. Just £75m will be allocated to AI, of which £45m will fund 200 new AI PhD places a year. A total of £160m will be spent on ensuring the security of the 5G network.
Darren Roos, president, SAP ERP Cloud, said the commitment to AI research is “highly welcomed”, but added that it was only a start: “Other countries are investing far more in AI. Today’s pledge from government must act as a catalyst for cross-industry investment in this technology, with bold new ways of working created and AI front and centre.”
The Geospatial Data Commission
The Geospatial Data Commission, Hammond said, will develop a strategy for using the government’s location data to support economic growth. “As data becomes openly available it is important that we also protect its quality and integrity,” Walker said. “We therefore support a new Geospatial Data Commission, with funding of £80 million, to look at these issues.”
Extra funding for computer science teaching
The Royal Society revealed earlier this month that nearly a third of students in England had been denied the chance to study computer science at GCSE in 2015/16. Its researchers warned that the government had rushed the new coding curriculum and failed to give schools the support and money to deliver it. Now, the government has promised that 8,000 new computer science teachers will be recruited, costing £84m. Hammond also announced a new National Centre for Computing.
New regulatory bodies
The chancellor unveiled two initiatives seeking to modernise regulation for the digital age: a centre for data ethics and innovation, costing £9m, and a Regulators’ Pioneer Fund, costing £10m. Walker said: “In an economy that is characterised by rapid technological innovation, it is vital that our regulators are able to keep pace. We therefore welcome the [announcements].”
Walker suggested that many tech workers would be asking if Hammond’s pledges will go far enough to prepare the UK for the “long uphill road ahead”.
“It sets out a strong package of announcements for tech and innovation,” he said. “Additional funding for 5G, AI, digital skills, retraining, connectivity on trains, high-value infrastructure and transforming cities sends the right signal about the ambition for the UK economy post-Brexit.
But he added: “While the chancellor has identified the right priorities, the overall economic forecast and tight spending constraints means that the amount of funding available is small relative to the growth potential of the sector.”