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March 19, 2015

Budget 2015: Step in right direction, but not good enough

Chancellor George Osborne put technology front and centre yesterday, but concerns have been raised about the promises made.

By Ellie Burns

£600m for broadband, £40m for IoT, wifi in public libraries and digital currencies – the 2015 Budget clearly illustrated the government’s commitment to the UK’s digital economy.

The government’s realisation of the economic success that can be reaped from embracing technology has been applauded across the industry, with many feeling that the 2015 budget has made promises that will truly aid in positioning the UK as a leading digital economy. SAP UKI Chief Technology Adviser, Mark Darbyshire, called the Budget ‘refreshing’, adding:

"The government has not only recognized the importance of technology to Britain’s future, but is committed to investing in it. Moving away from annual tax returns is a step towards real-time business."

However, where there is praise, there is almost certainly criticism.

Broadband was a key Budget announcement that brought with it huge applause from across the industry, with the Chancellor promising super-fast broadband to all homes and £600m to clear spectrum bands. Under that initial applause, however, were industry grumblings that although the broadband promises are good, they are simply not good enough. Alex Holt, head of telecommunications sector at KPMG said:

"The recognition by the Chancellor of the vital role that digital infrastructure plays in driving the UK economy is very welcome. 100mb to all premises is indeed a great goal, but for how long will that be considered superfast?

"In an industry that operates within an RPI minus environment, we need to develop a mechanism to better incentivise communication providers to invest in delivering beyond 100mb, truly superfast connectivity at 500mb and beyond to 1gb."

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Askar Sheibani, Comtek CEO, simply states that the government are not addressing the real broadband problem, and the broadband pledge is simply an empty promise:

"While ultrafast broadband for nearly all of the UK is an appealing claim, the Government continues to fail to address the real problem holding back UK connectivity – dark fibre tax. Throughout its term the government has thrown tax payer money into superfast broadband, but it has done nothing to help the smaller companies facing hefty penalties to install dark fibre, when the big players only have to pay a fraction of the amount.

"This unfair tax continues to limit UK connectivity, leaving many in rural communities without even the most basic internet services. While the Government is yet to lay out exactly how it intends to invest £600 million in better mobile networks and ultrafast broadband speeds, there was absolutely no mention of the dark fibre tax, which could potentially jeopardise the Government’s entire investment."

The House of Commons was also introduced to the new (new for MPs) concept of Internet of Things, artfully explained by Osborne with a well-aimed ‘two kitchen’ jibe at the Labour frontbench.

Similar to the reactions seen with the broadband investment, the inclusion of IoT in the Budget was welcomed, yet many think much more can be done on the topic – especially when it comes to nurturing digital skills. SAP’s Mark Darbyshire commented:

"While there are still challenges to overcome before the IoT becomes widely-established, the UK government’s £40million investment in IoT research, is a step in the right direction for the country.

"What we’d like to see addressed more proactively, however, is a focus on the skills and standards needed to realise the potential offered by new technological trend like this. Getting this right has to be at the heart of our industrial and technology strategy in the UK."

The absence of IT and digital skills from the Budget has been a major talking point in the Budget aftermath, with Peter Kelly, Managing Director at Vigin Media Business, ‘surprised’ by the omission:

"Given that Britain has the largest digital economy of the G20, it’s surprising that there was no mention at all of ‘digital skills’ in the Chancellor’s Budget today."

"Investment in digital skills doesn’t just boost the IT sector, it gives Britain a competitive advantage over the rest of the world.

"Businesses have a role to play, but government support is essential."

In short, I think the industry can take yesterday’s budget as a definite step in the right direction – especially in regards to mobile connectivity. However, in order for the UK to achieve that aspiration as a digital leader, digital skills and the digital infrastructure needed to support a connected UK needs to be addressed – and it needs to be addressed by both the industry and government.

George certainly brought technology to the forefront yesterday; now let’s see if he can pull it off.



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