Autumn Budget 2021: The tech industry reacts

Counter to the last Budget helping direct business investment, the big announcement this time focused on skills

Chancellor Rishi Sunak announced the Autumn Budget today, focusing on public sector investment and rebuilding the economy post-Covid.

Sunak began with a host of optimistic announcements about the state of the economy and growth, but warned about the threat of inflation - although noted that the government is "willing to act" on it if necessary. The Office for Budget Responsibility forecasts four per cent inflation next year - much higher than the Bank of England's two per cent target.

For technology, perhaps the biggest announcement was a pledge of £3.8 billion for skills and education, quadrupling the number of skills boot camps currently on offer. It's worth noting that while there are 13 boot camps dedicated to cyber security around the country, there is just one for AI, one for software development and one for agile programming.

Rod Flavell, CEO of technology training company FDM Group, said: "The Chancellor's proposals for skills bootcamps, extra funding for digital training and other lifelong learning initiatives is a positive step in the right direction, but so much more needs to be done. Far too many young people are still avoiding a career in critical subjects like computer science and coding, at a time when businesses are crying out for candidates with proficient technical expertise.

"Likewise, the tech sector is still lacking in diversity, something which has to change is we are rebuild the economy so it is fit for the challenges ahead. We need to see a concerted effort from government, businesses and organisations in the education sector to encourage more young people into the technology industry. This means investing heavily in training, support and guidance to ensure we can quickly close the skills gap and reboot the UK economy for the long-term."

Kevin Hanegan, chief learning officer at Qlik, agreed:

"UK employers are struggling to fill vacancies across many different sectors. The £3.8 billion investment into skills outlined in today's Budget is a promising step to help fill these vacancies. Yet, while quadrupling the number of skills bootcamps for adults is moving in the right direction, more still needs to be done to ensure candidates have the relevant skills to apply for the most in-demand jobs. This means continued investment in upskilling to support the development of future-proofed skills - like digital and data competencies - that are in demand today and will be, more so, in the future."

Along with the new funding, Sunak also announced an investment into the Scale-Up Visa system, which is designed to make it easier and quicker for high-skilled individuals to be brought into fast-growing UK businesses from overseas.

Nick Thompson, CEO of DCSL GuideSmiths, said:

"It's great to see that the UK government has thrown their support into the skilled sector with increased funding, especially after such a turbulent few years. This Budget acknowledges the importance of the future of the digital and software development sector, as it is now clear that many businesses now rely on digital transformation and app development for their growth and survival - especially as we work towards recovering from the pandemic. The UK economy's recovery will rely on businesses being able to access skilled talent when they need it in order to grow and scale."

R&D funding

The government will invest £20 billion in research and development by 2024/25, which Sunak said was "a record investment to secure the UK's future as a global science superpower." He also announced a limit on tax relief for business R&D spending so that it only applies to domestic activities, and includes investments in cloud and data - so a significant potential tech boost.

This was a new announcement. Quite where this money is coming from is unclear at this time and a more detailed examination will be needed in the coming weeks.

Michael Jaeger, partner and patent attorney at European IP firm Withers & Rogers, said:

"The Government's focus on investing in driving economic growth is good news for innovative businesses. In particular, the decision to boost spending on R&D activity in the UK by £22 billion and extend the scope of the R&D tax relief scheme to include investments in cloud computing and data costs, will encourage businesses to invest in improvements that will drive UK productivity.

"The new £1.4 billion Global Britain Investment Fund that has been established will also help to attract investment from overseas into rich seams of research in areas such as life sciences and electric vehicle technologies."

Public spending

There will be a real-term rise of around 3.8 per cent for every government department - an extra £150 billion. This is more generous than expected and a welcome change after more than a decade of cuts. Some of this money is almost certain to go to public sector pay for workers in the NHS, the police and more.

Although not heavily touched upon, Sunak had pre-briefed a £5.9 billion increase specifically for the NHS, of which £2.1 billion is for IT modernisation - an area where it has been sorely lacking for many years.

Mike Kiersey, CTO of Boomi, said:

"The NHS runs on the efficiency of information, and on this information being accurate and up-to-date. If...some of the data and technology infrastructures have been unable to keep up with the pace of change, then that is a serious concern, especially in the current circumstances where data needs to be constantly managed, integrated, secure and accessible to best serve the public.

"It is promising to see funding being directed to future proof IT systems but, ultimately, digital transformation is a delicate process, and one that needs to be carried out over a period of months and years. However, if the NHS can efficiently modernise their data practices in the coming months, it will be able to put a framework in place to become a digitally native system that can begin addressing the backlog of people waiting for crucial checks, tests and scans, and to help get waiting lists down."

"Overall, this will ensure digital systems in hospitals and mental health care settings are as robust, connected and efficient as possible - freeing up valuable NHS staff time."