Autumn Budget 2021: What It Means For Tech Sector?

The Chancellor Rishi Sunak has today delivered his Autumn Budget, which sought to help the low paid in a post Covid era, as the UK bounces back from the harsh economic shock caused by the Coronavirus pandemic.

The Chancellor stressed this was an ‘optimistic budget’, and pointed out that the UK economy is forecast to return to pre-Covid levels by 2022, with annual growth set to rebound by 6.5 percent this year, followed by 6 percent in 2022.

But what exactly does the budget deliver to the technology sector and the companies that operate within it? Lets take a look.

Autumn Budget 2021 – NHS

First off it is worth noting that there was no big headline spending commitments for the tech space, but that said there were two notable developments for tech as a whole.

The first notable development is the news that the NHS is set to receive an additional £2.1bn for IT and digital technology.

“The news that the NHS will receive an additional £2.1bn in the budget for improving IT and digital technology should be welcomed,” said Grant Caley, UK & Ireland chief technologist at NetApp.

“Since the beginning of the pandemic, there has been a rapid uptake in data and digital resources,” said Caley. “The power of data is transforming the NHS right before our very eyes and digital transformation continues to be on an upward trajectory.”

“If the NHS harnesses data correctly it has enormous potential to enable research, drive efficiency and enable better decision-making,” said Caley. “The use of Artificial Intelligence will also be key in supporting that effort. At a time when the NHS is under significant pressure, technology can help health professionals to continue providing the great care they do, but the strain placed on them and potentially reduce burnout.”

“Investment in the cloud, for example, can help the NHS deliver better patient services and offer more value for taxpayers,” said Caley. “Data has been a vital resource in dealing with the Covid-19 pandemic and now is the time to invest in the digital infrastructure the NHS needs to build back better.”

Skills funding

The second notable development in the Autumn Budget was the government’s £3.8 billion investment (a 42 percent increase) into a ‘skills revolution’ to tackle the UK’s growing skills gap.

“This Autumn Budget is wholeheartedly on the side of the tech sector,” enthused Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates. “With the commitment to reskill the nation through a 42 percent increase in spending on skills and a formal criteria for the long-awaited Scale Up Visa, the Chancellor has announced a set of proposals that will support the breadth of our sector from startups right through to our unicorns.”

“After thirty years in the industry, it is most welcome to see tech finally take its place at the top table of government policy,” said Shaw. “This government should be commended for committing heavily to digital innovation as a route to economic recovery and job creation – although further investment in skills will be needed alongside numeracy programmes like ‘Multiply’ in the future for us to fully address the shortage of tech skills we currently face.”

“Doubling Innovate UK’s annual budget to £1bn, launching the Global Talent Network and incentivising R&D domestic spending are eye-catching policies for the tech sector – although it is a real shame that the Chancellor has thrown cold water on the R&D proposal by delaying it for two years,” said Shaw.

“London has been a global tech hub for some time now – but the Chancellor’s commitment to making the UK a ‘science and tech superpower’ is an extremely promising step towards cementing the entire country’s position as a true international digital leader,” Shaw concluded.

Software development

Another expert also weighed in the ‘skills revolution’ and urged focused on software design and development skills going forward.

“There’s a huge focus on the government’s skills and training commitment in this year’s Autumn Budget announcement, and rightly so,” said Paramjit Uppal, CEO and Founder of AND Digital.

“However, I would like to see more going into the software design/development skills development,” said Uppal. “The UK needs more skilled people who can build software and data solutions for every organisation – the gap in the needs of large and small, private and public sector organisations and the availability of talent is the single biggest competitive threat to the UK over the next 3-5 years.

“Investing in people and their potential will be the catalyst for innovation and will underpin a society that already relies so heavily on digital progress,” said Uppal.

“As schemes develop, we should expect to see more support measures and investments dedicated to developing the technical skills people need to help build products and experiences that can make a real impact,” said Uppal. “It’s right to make this training commitment to adults of all ages; learning is a lifelong process. Supporting people in cultivating the technical expertise and fundamental digital skills they need to progress is simply the right thing to do.”

Vaccant jobs

Another focus in the Budget was salaries and taxation, and it comes amid the so called ‘great resignation’, as people reassess their life priorities following the global Coronavirus pandemic that has (as of 27 October 2021) killed at least 4.96 million people worldwide.

“It comes as no surprise that work culture and salary issues have been in focus for this Autumn Budget, following months of discussion around labour rights and staff retention concerns,” said Jonathan Richards, CEO of Breathe.

“The ‘Great Resignation’ or most recently the term coined ‘The Great Reshuffle’ comes to mind; employers are tackling the backlash of what has become a widespread revolt against low pay and long hours experienced across all industries,” said Richards. “For hospitality and retail sectors especially, a wage increase is a step in the right direction, but it’s certainly no silver bullet.”

“Following recent tax adjustments announced earlier this year, it’s a positive outcome that there are no further hikes – yet,” said Richards. “The National Insurance 1.2 percent increase is set to hit mid-market businesses where it hurts, their bottom line, as they strive to match employer contributions.”

“Against a backdrop of salary increase demands spurred by the spiralling lockdown overtime, any more tax hikes will bleed the squeezed middle and seriously hinder their growth,” Richards warned. “

It’s already a tough situation for many. In view of all this, employers should focus on nurturing existing staff and show them respect for the work they do. Whatever the outcome of the Budget, focusing on staff retention and fostering a culture where people want to stay and support each other will be the key to sustainable growth.”

Border control

Another expert noted Rishi Sunak’s focus on the importance of controlling the UK’s borders while still attracting high quality overseas talent.

“Whilst the Chancellor’s new funding measures to boost border control announced in the budget today are important to keep the UK secure, we must not forget, as a country, we owe a lot to migrants – for example the key workers we clapped for on our doorsteps throughout the pandemic,” noted Daumantas Dvilinskas, CEO & Co-Founder of TransferGo.

“In London today, almost half of doctors and two-thirds of nurses are migrants, while across the UK, 15 percent of those working in supermarkets or other roles in foods and necessary goods are non-British nationals,” said Dvilinskas. “Fundamentally, to run, the UK depends on a steady stream of talented and committed workers from all corners of the world.”

“As such, the government must carefully consider how to embrace these workers from outside the UK,” said Dvilinskas. “As a migrant myself, the budget lacked direction on how the country can showcase itself as a natural home to diversity of thought, background and experience. Learning how to walk this line between enhancing security and appealing to talent will ensure the UK can continue to be an industry powerhouse – whether that’s in tech, fintech, manufacturing or healthcare.”