Autumn Statement: Government Commits £1bn For UK Digital Infrastructure

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Government commits investment to tech R&D, broadband and 5G

The government has pledged £1 billion of funding to build out the UK’s digital infrastructure, with  a particular focus on 5G and full-fibre broadband.

Chancellor of the Exchequer Philip Hammond revealed the new pot of funding as part of the government’s Autumn Statement.

Some £400 million of the funding will be focussed on delivering fibre broadband cabling to the premises of homes and businesses rather than an exchange cabinet.

From April 2017, the government will also provide a new 100 percent business rates relief for new full-fibre infrastructure for a five-year period. While the lion’s share of the Digital Infrastructure Investment Fund will be used to fuel trials of the much vaunted 5G mobile broadband.

Getting digital

Digital Analog Umstieg © N-Media-Images - FotoliaWhile the government did not explicitly dedicate any more funding to technology but several areas of the Autumn Statement touched upon the technology industry

One of those was a new £23 billion fund from the National Productivity Investment Fund to shore up the UK’s economy for the future. Alongside funding productivity boosts, transport and housing, the fund will  look to bolster digital communications and research and development which will almost undoubtedly cover tech aspects.

Some £390 million will also be channelled to wards the transport industry in order to modernise the UK often creaky infrastructure. This will involve channelling £100 million into a investment in driverless cars in both infrastructure and testing terms.

Hammond also re-iterated the government’s commitment of £2 billion of funding towards the UK research and development sector, of which a major part is robotics, artificial intelligence. And industrial technology.

For businesses, the government is committing to cut corporation tax by 17 percent by 2020, something that the government claims will benefit over one million businesses, which of course touches upon the technology world.

The Autumn Statement also highlighted that the British Business Bank will invest £400 million in what the government calls “innovative small businesses” which it said will support £1 billion of new investment. Given a lot of small businesses in the UK are digital or tech-related firms, this is good news for the UK’s technology industry as a whole.

Tech industry reacts

reactionThe Autumn Statement gathered a mixed response from the technology industry as a whole, with some positivity and a few raised eyebrows.

“A match-fit Britain must be a tech-fit Britain, and today the Chancellor gives UK tech a series of welcome announcements. The Chancellor’s focus on backing tech and unleashing a new wave of productivity is exactly the vision needed for an uncertain period ahead,” said Charlotte Holloway, policy director at techUK.

“However, there was a real gap when it came to additional support for boosting the UK’s digital skills. Similarly, there was a missed opportunity to ensure that the benefits of digital are at the heart of the Government’s devolution ambitions. We will be looking to the Government to reconsider these areas in the next Budget.”

Russ Shaw, founder of Tech London Advocates, the private sector network of 4,000 tech experts in London and beyond,

 “The previous government was instrumental in encouraging a flourishing tech ecosystem in the UK; so far the current government is not doing enough to maintain this impressive track record,” he said.

 “As the fastest growing industry in the country, the chancellor must prioritise the livelihoods of the 300,000 people in the capital and 1.5 million people countrywide who work in the technology sector.

 “The measures introduced by the government today miss half of the picture. They will not be a silver bullet, and crucially do not address the tech sector’s number one issue – access to talent. The Prime Minister must take positive steps to safeguard our tech talent pipeline and allow companies to access workers with the right skills.

“This requires a more functional immigration policy to attract world class talent, and an investment in digital skills to train up our existing home-grown talent. Financial incentives can only be successful if we have skilled workers that can use them to innovate and create value.”

Shaun Collins, chief executive of tech analyst firms CCS Insight, drew attention to the broadband aspect of the Autumn Statement.

“Any investment in the UK digital backbone is welcome and the commitment to 5G is admirable. However, realistically 5G services are unlikely to be available before 2020 in the UK. This investment only offers a small step in that direction,” he said.

“High quality broadband has become essential to support an increasingly digital workplace and home. The UK has lagged behind other nations and this had to be addressed quickly.”

While the government does not appear to be shunning its commitment to the digital and technology sectors, it will need to ensure the way it approaches these commitments is carefully considered, as it is indicated that if it gets its act together savings of £2 billion for Whitehall can be achieved.

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