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Budget 2016: The tech agenda

By Ian Parslow, SVP at MTI Technology - 18 April 2016

Part of the budget’s focus this year was on small companies. Empowering growing businesses to take control of their future with reforms on business rates, charges on their offices or commercial properties, and how and where they are spent was all discussed.  

However, a lack of specific mention of the IT sector does not mean that the budget will not affect the UK tech industry. Issues including the widening IT skills gap and the slow pace of change when it comes to business-ready Wi-Fi across the UK.

Business innovation and growth

The reform on business rates means that some smaller tech companies will pay less, or nothing at all, when it comes to charges on their business premises. This focus on helping growing companies is a step forward in enabling small tech businesses to direct their resources towards building their business and innovating within their industry.

The UK has been praised for its growing influence within the tech arena, with the sector accounting for 10 per cent of the UK’s GDP and being globally viewed as a desirable place for international technology companies to set up European headquarters. We can continue to foster this environment of technological innovation with greater financial relief for small tech companies who are just starting off. Government grants and tax relief could take some pressure from IT firms so that they can focus on business growth and preparing their products for market.


In previous budgets and spending reviews, there were provisions for apprenticeships and announcements of STEM career investment, however, this year very little attention was given to this. Additional investment from the government to expand existing apprenticeships schemes, as well as initiatives to focus and support academic establishments, and businesses in their goal to produce more STEM focused graduates, would have been in the interest of the tech sector as a whole.

The continued skills crisis is showing no signs of decreasing in size and the uncertainty of the Brexit is casting a shadow on the industry, with access to talent and external investment at risk of being reduced significantly.

To combat the skills crisis, forward-looking companies should explore the creation of internal academies. These academies allow companies to train and develop talent within the company, allowing for a tailored and individualised program for each young person, based on their interest and experience. This initiative is a way for IT companies to take control of their future by ensuring that they have the right talent, trained for specific positions.

Investment in infrastructure

Greater investment on ‘connecting the UK’, whether it be via technology infrastructure or transport links, is likely to attract new foreign business and capital.

Although, there was mention of delivering 5G data services, the focus should be on building a working infrastructure for fast, business-ready broadband, not just in London, but across the UK.

While the UK is beginning to establish itself as a global tech hub, it is being held back to an extent by UK broadband speeds that are lagging behind other European nations. Faster Broadband across the UK will allow businesses to become more agile and productive, with 60 per cent of Institute of Director (IOD) members stating that it would make their businesses more competitive.

Other EU states, such as Lithuania, whose economy is only a third the size of the UK’s per head, have already implemented fibre optic technology that is reaching 60 per cent of its premises. This is the standard the UK should be aspiring to and looking to surpass.

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