The Spring Budget is traditionally one of the most eagerly anticipated political events of the calendar, it sets out the roadmap for the country’s immediate fiscal future and gives us an idea of business landscape we can expect in the coming months. We’re currently living and working in the era of the skills gap, a problem that risks stalling the country's progress as we move into a technologically advanced age. Chancellor Philip Hammond has announced a number of new measures in his recent budget, and it looks to tackle this problem at source.
The in-depth analysis from politicos remains to come in, but at this early stage the approach the government is taking looks to threefold - invest in education, fund development of disruptive technology and support the businesses working in these new, exciting fields.
Investing In Education and Skills
Believing that the foundations for a new, tech-ready generation starts at school, Hammond announced an extra £260m over next the three years for existing schools, bringing the total investment in schools to £10bn for the term. However, in addition to this, there will also be funding for an extra 110 new free schools on top of 500 already announced - with some being specialist maths schools.
The skills gap does not start and end at school however, and Hammond said there is lingering doubt about the parity of esteem between academic education and technical education - an unfortunate association that can have the effect of discouraging individuals from attending colleges to acquire the much needed technical skills the country needs moving forwards. To combat this, ‘T levels’ (and university-like student loans) will be introduced in an effort to establish parity of esteem between academic and technical education. This has been somewhat of a holy grail for education administrators for decades, so if achieved it will surely be a crowning achievement for the government.
Funding for Advanced Tech
It’s one thing to lay the foundations, but another to create the right environment for skills to flourish. To achieve this, Hammond announced £270m to keep the UK at the forefront of disruptive technologies like biotech, AI, robotic systems and driverless cars, including funding for 1,000 PhD students in working in the STEM subjects. The idea here is to position the UK at the cutting edge of technological advancements.
On top of this, there was also a focus upon telecommunications with a £16m announcement for a new 5G mobile technology hub and £200m for projects to get private sector investment in full-fibre broadband networks.
Help for Small Business
Finally, and for what looks to be the final facet of Hammonds plan for a tech future, funding and tax reliefs are being provided for small business - vital in encouraging tech startups to spring up in the UK. There were calls for a complete slashing of business rates, but Hammond stressed that this raises £25bn a year - so they cannot be abolished. However, he stressed that the digital part of the economy needs to be better taxed in the medium term. Small businesses will enjoy a rate relief and will benefit from an extra cap - meaning their rates will not increase by more than £50 a month. To further alleviate any negative impacts upon small business, there will also be a £300m "discretionary fund" to be used by councils to help companies that are badly hit. Although these measures are not bespoke for the digital economy, it is easy to see how small tech companies will see the benefit.
Before the announcement of the budget today, the media and wider country were told to not expect anything too drastic and, for the most part, this has been a conservative budget in every sense of the word. However, the targeted measures discussed above that are aimed squarely at plugging the skills gap look very promising, if not a little over-ambitious in some instances. Time will tell how successful it will be, but if all goes to plan Philip Hammond could leave behind an enduring digital legacy.