Philip Hammond's 2017 budget promises cash for 5G and STEM skills

Today's budget saw Conservative chancellor Philip Hammond unveil a tax hike for self employed workers, money for innovative technologies like AI, plus a small amount of investment for 5G.

The government pledged to invest £270 million in research investment for biotech, robotics, self-driving cars and artificial intelligence is part of a new Industrial Strategy Challenge Fund.

Hammond announced £16 million for a “5G hub” – though it is unclear exactly what this means for now. Local authorities will also receive chunks of a £200 million pot for encouraging private investment in fibre broadband networks.

The chancellor made some noise about skills in STEM subjects and set aside £300 million to encourage new PhDs and fellowships.

At the same time, there is uncertainty about how well the UK will be able to attract talent from other countries, particularly with the context of anti-immigration policies and rhetoric from the Conservative party and confusion about Brexit looming ahead.

A drive in technical education, aimed at 16- to 19-year-olds and called T-Levels, will work as an alternative to A-Levels and focus on technical careers training (although this was first announced in late 2015, as FE Week points out in this helpful rundown). These courses will include digital, engineering and manufacturing, and creative and design.

Hammond said that the government plans to provide consumer bodies with “greater enforcement powers” and that this will boost income, along with simplifying terms and conditions, which might well have a knock-on effect in consumer technology or IT services.

Self-employed workers will have to pay more into their National Insurance contributions, rising by one percent to 10 percent in 2018, and another one percent rise in 2019.

Policy director for technology lobby group techUK, Charlotte Holloway, welcomed the announcements.

“The UK has long had a chronic problem developing home-grown experts in STEM subjects,” Holloway said.

She added that the technology sector will be awaiting further clarification in the business rates review for online companies.

“It is key that this process begins with an open and evidence-based dialogue with industry, keeping front of mind the role that online technologies play in driving digital growth for SMEs,” Holloway said.

The Institution of Engineering and Technology warned that the proposed funding will not be nearly enough to deliver a successful rollout of 5G – echoing concerns that the government is not taking the importance of the technology seriously enough.

Vice president of the Institute, Professor Will Stewart, said: “It’s important to stress that the 5G investment announced today will not come anywhere close to bridging the investment gap needed to deliver 5G across the UK.

“The government’s recognition that regulatory modernisation is needed to make the final bill of delivering 5G more affordable, for example by enabling operators to share networks, is pivotal. The biggest challenge for government will be improving coverage for all, as 5G cannot transform what it doesn’t cover. Achieving universal coverage for the UK outside high-capacity urban areas will not be affordable or achievable without regulatory change.”

And Patrick Imbach, co-head of KPMG Tech Growth, asked: “With Ofcom wanting 5G to arrive by 2020 and operators still looking to make a return on their 4G investments, you would need to question how much of an impact £16m will have?”


Copyright © 2017 IDG Communications, Inc.

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