UK IT sector to Chancellor: Some great ideas, but are you kidding on 5G?

Industry reaction’s coming in thick and fast to yesterday’s Spring Budget, with positives flooding in for research and education in IT – but there’s a lot of scepticism about what’s seen as a very modest push for superfast wireless

Posted 9 March 2017 by

The UK IT sector likes what the Chancellor says he’ll do for the tech sector in yesterday’s final Spring Budget – though it has some serious caveats, nonetheless.

Speaking for the vendor community, techUK, the trade body for the British ICT supplier world, was quick out of the gate yesterday afternoon with a response, characterising Hammond’s ideas as “laying solid foundations for what will be an uncertain period ahead”.

techUK picked out the government’s £270m commitment to developments in areas such as biotech, robotics and driverless cars as “welcome”, as was the £16m for a 5G hub and the £200m being made available for local authorities to stimulate private investment in fibre networks for world class digital connectivity, as well as ideas about supporting national STEM expertise at PhD level.

However, techUK is adopting a “wait and see” approach to Number 11’s proposed review into business rates for online companies, with its Policy Director Charlotte Holloway warning that, “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.”

A similar note is being struck by consultancy KPMG, whose Patrick Imbach, Co-Head of its KPMG Tech Growth practice, said, “The Chancellor made some welcome announcements in today’s Budget, demonstrating that the Government acknowledges technological innovation is key to grow the UK economy in the future and addressing its productivity gap.”

But Imbach also strikes a cautionary note around Hammond’s 5G ambitions: “The Chancellor is also right to invest in 5G technology. However, with UK regulator 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?”

The IET (Institution of Engineering and Technology) is also lukewarm on the 5G proposals. “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,” it said in a Budget response statement yesterday.

“The Government Strategy’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… Ultimately, delivering 5G is not a flash in the pan to be achieved in 2020 but a journey, demanding deep and sustained levels of cooperation between governments, regulators, operators, vendors and vertical industries.”

More reaction is expected today as the sector picks over the details of the Budget – we’ll keep you updated with the most significant reactions.