Election 2105 - did Osborne deliver the first Digital Budget?

Profile picture for user slauchlan By Stuart Lauchlan March 18, 2015
Britain's final Budget statement before the country goes to the polls sees a major tranche of technology-centric plans being announced.

Election 2015

On May 7, the UK electorate goes to the polls to choose a new government in what is currently the closest run/impossible to tell race for power ever seen. Against that backdrop, there was inevitably a lot riding on the final Budget statement of the current parliamentary term.

Amid the usual pre-Election bids to buy votes with a penny off a pint of beer and some tweaking of the tax system, the UK finance minister, Chancellor of the Exchequer George Osborne pulled off one notable feat: possibly the most tech/digital friendly Budget in UK history.

Among the tech centric measures announced yesterday were:

  • £100 million for R&D related to the Internet of Things and a further £40 million for demonstrator programmes, business incubator space and a research hub to develop applications for IoT in healthcare and social care, and smart cities.
  • Investment in broadband with £600 million allocated to better co-ordinate spectrum to free up more frequencies for use by mobile networks.
  • The publication of a Digital Communications Infrastructure Strategy.
  • A new goal that ultrafast broadband of at least 100Mbps should be available to “nearly all UK premises”, a laudable goal if almost completely lacking in deliverable detail at present.
  • Four ‘tech incubator’ areas will be created around the UK, in Leeds, Manchester and Sheffield, partly a response to criticism that London’s Tech City area currently gets all the attention.
  • The Gov.UK Verify digital identity tool will be rolled out across all of central government.
  • Criminal record checking is to be digitised with APIs opened up to third parties.
  • A Crown Hosting Service will act as a joint venture to centralise non-cloud data centers, with a goal of saving up to £100 million.
  • The dreaded annual tax return is to be abolished, replaced by personal and business digital tax accounts, with the first tranche introduced early next year. This will clearly be a major IT/digital transformation program and one taking place at the same time that the exiting Aspire outsourcing deal is winding down. Definitely one to watch on the high risk front.
  • The Government Digital Service is to have its remit extended to encompass local government, this despite general resistance to such a move within the target audience. It’s also not an idea that’s too exciting inside GDS, I suspect. What this isn’t however, despite some over-excited media coverage elsewhere, is a commitment to create GDS Local.
  • Finally, civil servants are to be “given the opportunity” to use ‘sharing economy’ apps and services to cut costs on travel and accommodation. Well, let’s see how many top civil servants take up the “opportunity” of summoning their Uber car to take them to their AirBnB overnight accomodation. I note as well that this policy doesn’t appear to extend to MPs or Cabinet ministers?

Tech response

All told, the Budget - or at least the tech angle on it - has won plaudits from the UK ‘technorati’. Julian David, CEO of industry trade bodyTechUK, comments:

The smart use of tech is fundamental for balancing the books, increasing productivity, creating new jobs and including and empowering people across the UK. By investing in infrastructure, innovation and entrepreneurship the government is driving growth, not just in tech, but across the whole UK economy. Combined with continued ambition for digital government, today's package strengthens the UK's position as a leading global digital economy.

Digital Chancellor?

David is particularly pleased with the IoT investment program:

By funding the IoT the government has shown a foresight typical of the shrewdest investors. It might be in its early stages, but the opportunity IoT presents is limited only by our imagination. IoT will completely revolutionise the way we live and work. The public sector will benefit. Consumers will benefit. And UK Plc will benefit.

By investing in this IoT program, the UK govt has signalled its desire for the UK to be a world leading digital and connected economy. It's a clear statement of intent to our international competitors and a move that is wholeheartedly supported by techUK and the wider UK tech industry.

Simon Segars, CEO of chip manufacturer ARM, adds:

The way to prove a technology at scale is through the kind of ambitious demonstrator projects the UK Government has agreed to fund. We need to work out how we bring different technologies together in a way that delivers aggregated benefits as this is what drives the IoT and smart city deployments.

Through these projects the UK can prove in a cost-effective way what others are still theorising about. This will lead to new technologies and expertise that UK companies can export around the world to help guide businesses and cities onto a far more sustainable path.

But not everyone was entirely impressed. Alex Holt, head of telecommunications sector at KPMG, criticises the broadband infrastructure goals for not being ambitious enough:

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.

Meanwhile Ami Shpiro, founder of London-based start-up accelerator Innovation Warehouse, is in two minds about the regional tech incubator program:

The government is right to try and encourage the creation of tech and enterprise zones across the country, but what we really need is more support for small businesses, more investment in education and skills, and an immigration policy that allows us to pick the best and brightest.

High speed broadband will prove vital to improving connectivity and driving productivity, which has increasingly been a problem in Britain. It is essential we see more tech clusters emerge outside of London and the South East, just as investment in regional cities begins to grow.

My take

All that and a penny off a pint of beer!

Seriously, whatever your political complexion, Osborne is to be applauded for laying out what is the most tech-centric budget proposals that I can recall. Some of them may not go far enough, although they go further than expected, and there’s precious little detail around the broadband roll-out.

But overall, I think the UK just saw its first proper Digital Budget.

Now of course, comes the tricky bit: putting it all into action. It’s entirely possible that on May 8, Osborne and his government will no longer be in power.

His counterpart in the opposition Labor Party, Ed Balls, has been doing the rounds of the TV studios giving his response to the Budget plans. During this, he’s said that Labour would not reverse any of the measures announced yesterday. If that’s the case, good.

It would be good to think that investing in Digital Britain was a cross-party matter and not subject to the usual cat-calling and histrionics that we're about to see in the run-up to May 7.