Chancellor Philip Hammond’s Autumn Budget has pledged more than £500m for a series of digital, data and technology projects, together with £64m for training in construction and digital skills, as well as a boosting R&D credits to £2.3bn.
Presenting the government’s 2017 Budget, Hammond said the world is “on the brink of a technological revolution” and that the UK has to embrace the future “and build on Britain’s global success story”.
Investment in infrastructure, skills and research and development will help increase productivity to ensure a vibrant economy after the country leaves the European Union, he said.
The support includes money for broadband, artificial intelligence (AI), 5G and driverless vehicles, which Hammond said he wants to see on the roads by 2021.
“Today we invest over £500m in a range of initiatives from AI, to 5G and full-fibre broadband,” he said. “We support regulatory innovation with a new Regulators’ Pioneer Fund, and a new Geospatial Data Commission to develop a strategy for using the government’s location data to support economic growth.”
Hammond also announced a £1.7bn Transforming Cities Fund to support devolution and local government and a £44bn investment to increase housebuilding to 300,000 homes a year.
Other significant funding measures in the Budget include £160m from the National Productivity and Investment Fund for projects to develop next-generation 5G, including £10m to create facilities where 5G networks can be tested, and £5m for a trial to test 5G applications and deployment on roads.
The government will also create a retraining partnership involving the CBI, the TUC and government, which aims to give people “the skills they need throughout life to get a well-paid job, and equipping young people with the science, technology, engineering, and maths [Stem] skills to become innovators of the future”.
Hammond said the first priority will be to boost digital skills and support the expansion of the construction sector. “And to make a start immediately, we will invest £30m in the development of digital skills distance learning courses, so people can learn wherever they are, and whenever they want,” he said.
The government also intends to establish the world’s first national advisory body for AI – allocating £9m to a centre for data ethics and innovation, which it hopes will “ensure safe, ethical and ground-breaking innovation in AI and data-driven technologies”.
The accompanying Budget book claimed that the new centre would be a “world-first advisory body that will work with government, regulators and industry to lay the foundations for AI adoption, which estimates suggest could benefit households across the UK by up to £2,300 per year by 2030, and increase GDP by 10%”.
Hammond announced a further £2.3bn in investment in R&D as well as an increase in the main R&D Tax Credit to 12% (from 11%).
However, Matt Watts, head of R&D at Smith & Williamson, the accountancy, investment management and tax group, was not impressed: “The Chancellor has increased the Research and Development tax credit [RDEC] credit by 1% but has left the SME rate the same. Whilst the existing scheme for SMEs is still more valuable, limiting the increase to R&D tax credits for the large company scheme sends a mixed message to British businesses.
“The R&D tax credits is a popular relief which is promoting investment and creating jobs. Why should only big business benefit when it’s our smaller businesses we need to be supporting?”
In terms of training investment, Liz Jenkins, partner at Clyde & Co, commented: “A multi-million pound shot in the arm is of course very welcome but it’s going to take a lot more than retraining some adults to replace the potential outflow of migrant labour post-Brexit, particularly as there is also a question of where these adults are going to come from as unemployment is currently low.
“The construction industry therefore needs to work hard to promote a career switch into the sector and break down some of the stereotypes around the sector that could put people off.
“Retraining adults as construction workers would provide some labour but once they retire we’ll be back to square one, unless we’ve trained a significant cohort of today’s young people to fill the gap.
“This initiative needs to be coupled with effective management of the CITB reform and ensuring the money received from the [CITB] levy is invested to ensure future generations of construction workers will be there to build post-Brexit Britain.”
The R&D tax credits is a popular relief which is promoting investment and creating jobs. Why should only big business benefit when it’s our smaller businesses we need to be supporting?– Matt Watts, Smith & Williamson