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  1. Government Computing
January 20, 2023

UK government ditches Tech Nation and hands funding to Barclays Eagle Labs

After five years supporting start-ups and scale-ups, Tech Nation is being replaced by the bank's network.

By Matthew Gooding

Tech Nation, the organisation founded by the UK government to support the country’s digital businesses, is having its funding withdrawn. The Barclays Eagle Labs network will take over its role supporting entrepreneurs from April.

Barclays Eagle Labs will take over the Digital Growth Grant from Tech Nation. (Photo by Electric Egg/Shutterstock)

In a move first revealed last year and which caused some outcry from the tech community, the Eagle Labs network has beaten Tech Nation to a £12m Digital Growth Grant, which will see it provide additional, government-funded, services to support start-ups and scale-ups. Eagle Labs already provides growth programmes and support from 38 of the bank’s branches across the country.

It means Tech Nation’s funding will come to an end in April, the Department for Digital Culture, Media and Sport (DCMS) said today.

Tech Nation funding ends after six years

Tech Nation was founded in its current form in 2017 after a merger between Tech City UK, an organisation set up to support the so-called Silicon Roundabout tech cluster in East London, and another regional tech group, Tech North. Since then it has spread its network of growth programmes across the country.

When Tech Nation launched, then-digital secretary Matt Hancock described the network as “an important part of our plans to make the UK the best place in the world to start and grow a digital business, with the benefits spread right across the country”.

Hancock added: “This regional network will accelerate the growth of the digital tech sector, cement the pipeline of talent and spark the next generation of innovative firms to seize the future opportunities of digitisation – bringing jobs, skills and higher productivity to our regions.”

News that it would be losing its government funding was first reported last year, leading to 415 tech industry figures signing an open letter calling for the decision to be reconsidered. Support for growing tech businesses “should be grounded in the start-up ecosystem and local ecosystems across the country – not looking to ride on its coattails,” the letter said, describing the decision to hand the funding to Barclays as “alarming”.

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Government grants make up approximately 75% of Tech Nation’s income. In a statement reacting to today’s news, a Tech Nation spokesperson said: “In anticipation of the government’s decision to award the Digital Growth Grant to another party, we have been working around the clock to secure our future and continue delivering for UK scale-ups.

“It is essential that any route forward for Tech Nation ensures we are able to continue to act in the best interest of the tech community and put the needs of scale-ups front and centre. This is the principle that has always guided us, and will guide our decision making over the next steps we take from here.”

Tech Nation has supported more than 5,000 businesses in the past five years, and claims to have “delivered one of the best returns on investment for the taxpayer, delivering £15 return on every £1 invested by the UK government.”

Goodbye Tech Nation, hello Barclays Eagle Labs

DCMS says Eagle Labs will fund training resources and opportunities for entrepreneurs, including a learning management system providing virtual training to over 10,000 businesses and training modules created for young people to inspire the next generation of UK entrepreneurs. It will also provide additional support to founders from under-served communities.

Concerns have been raised about allowing a bank to have such preferential access to the UK’s start-up and scale-up ecosystem, but DCMS says the contract award does not represent a conflict of interest, and says Eagle Labs operate as a separate entity to Barclays banking services.

The contract also does not impact Tech Nation’s role as endorsing body for the government’s tech visa programme.

“The independent panel assessing applications concluded Eagle Labs was uniquely positioned to deliver targeted support across the country,” a DCMS statement said. “A bespoke regional partnership programme will ensure funding and training reflects the challenges digital businesses are facing in their area.”

Paul Scally, minister for tech and the digital economy, added: “We want to unlock the potential of the next generation of start-ups and scale-ups and boost tech businesses in all corners of the country.

“Barclays Eagle Labs are digital industry experts and will help tens of thousands of tech firms and founders to achieve their dreams and create jobs and economic growth.”

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