Philip Hammond announced an investment of more than £1bn in digital infrastructure by 2020-21 and a boost for fintech, financial technology, as he emphasised the need to improve the national technology offering.
The UK needs to step up as a “world-leader in 5G”, urged the Chancellor of the Exchequer in his first, and last, Autumn Statement. Heavy investment in tech comes as part of Hammond’s plan to raise productivity through innovation and infrastructure.
The new national productivity investment fund unveiled in the statement will provide £740m to roll out full-fibre connections and 5G communications to “improve broadband speed, security and reliability, boost the next generation of mobile connectivity and keep the UK at the forefront of the development of the Internet of Things”.
The investment includes £400m for a new digital infrastructure investment fund, matched by private finance, to invest in new fibre networks over the next four years and work with local areas to create a “much bigger fibre spine across the UK”.
Hammond announced that 100% business rates relief will be provided for new full-fibre infrastructure for a five-year period from April 2017, to support roll-out to more homes and businesses.
The government has pledged to provide funding for a co-ordinated programme of integrated fibre and 5G trials. Further details of the programme will be set out in the next Budget, in March 2017.
The Department for International Trade will be investing £500,000 a year in fintech – financial services technology – and an annual ‘State of UK FinTech’ report for investors will be produced.
The government will launch a network of regional fintech envoys, with Dr Christopher Sier and Claire Braithwaite appointed to promote the Northern Powerhouse’s fintech offering. Braithwaite is ventures and partnership consultant at the Co-operative Group, and also tech advisor to the Manchester Growth Company. She was previously the first head of Tech North. Sier is director of FiNexus and professor of practice at Newcastle University Business School.
Manchester has aspirations to grow its fintech sector, with various hubs and start-ups popping up including the Barclays-backed Rise Manchester centre.
In an agreement with the Joint Money Laundering Steering Group, the government has pledged to modernise guidance on electronic ID verification to support the use of technology to access financial services.
The government will be supporting a FinTech North event in 2017.
The statement also announced legislature to ensure that publicly-funded basic digital skills training will be offered free of charge to adults in England who need it so that “everyone is able to participate in the digital economy”.
Dr Gordon Fletcher, academic unit head for international operations and information management, at the University of Salford Business School, said: “The proposed additional £23bn for the new National Productivity Investment Fund hints that the government is showing positive signs of support for the digital economy and more importantly for emphasising the importance of genuine innovation in the sector.
“However, the statement also hints that the NPIF could merely become the ‘Brexit Buffer’ against the financial uncertainties that departure from the EU will bring. Although £23bn can go a long way, many of the projects listed for the NPIF point back to the traditional transport and housing infrastructure including main road and rail links that will consume much of the budget. These are important and necessary products in their own right but bringing them under the same fund as advanced R&D support offers a lot of wiggle room over five years for a rebalancing of priorities in either direction.”