As the IT industry picked through the fine print of Gordon Brown's
budget the few positive initiatives could not overcome a general
mood of disappointment.
For Philip Virgo, strategic advisor to IT directors' group IMIS,
the highlight was Brown's support for training with the launch of a
series of pilot schemes to boost skills.
"I'm delighted by that, "Virgo told CW360.com, "I strongly urge ICT
employers to get involved. The rest of the budget, I can live
with," he added.
The pilots will pay employers between 75% and 125% of wage costs
for release staff for up to 70 hours a year of training.
Joe Edwards, director of retail finance at Computacenter, was less
impressed. "The budget was very disappointing," he said. "There
were few incentives for investment and on training, we should have
moved beyond pilots by now."
David Harrington, director general of the Communications Managers'
Association, said the chancellor had "missed a huge
opportunity".
"The headline budget statements contained nothing which impacts
immediately on the ICT community. There was nothing to accelerate
the information society and nothing which might encourage the
extension of broadband access to the entire population."
The Computing Services & Software Association (CSSA) and the
Federation of the Electronics Industry (FEI) were more positive.
They welcomed the research and development tax credits and the
measures designed to promote small business growth, in particular
changes to the VAT regime, and the reform of the taxation of
intellectual property.
FEI director general Anthony Parish said, "The electronics and ICT
industries needed an R&D tax credit rate that provided a real
incentive to base research and development activities here, and a
net rate of 7.5% represents a sound basis for future growth in this
area."
Richard Proctor, Tax Partner at business and financial advisors
Grant Thornton put some of the budget changes into
perspective.
"Many of the measures announced could have really helped if
introduced in isolation, but the 1% increase in employers National
Insurance contributions is the real sting in the tail for all
businesses," he said.
Although the Chancellor promised real benefits for small and
medium-sized enterprises, Proctor warned: "The tax breaks for big
companies are worth much more than those for small and medium-sized
businesses in absolute terms."
Peter Scargill, IT vice-president of the Federation of Small
Business said the budget was "disappointing", while Jane Akshar,
Chairman of the Professional Contractors Group, said: "We've heard
no practical initiatives today which will help small businesses in
the knowledge-based economy.
"They make little difference to entrepreneurs who have closed their
businesses because the government has created an environment were
they can no longer operate."
While the Federation of Small Business and the Professional
Contractors Group were angry about next April's rise in National
Insurance, Computacenter's Edwards said it might boost the
outsourcing market. "It could be a business opportunity for
outsourcers, as companies look to drive down payroll costs."
Interim IT director Colin Beveridge thought that offshore rather
than UK-based, outsourcers would benefit most. "That can't be good
for UK IT professionals," he said.
The Chancellor did announce substantial extra money for health and
local authority social services. However, IT professionals in both
the user and supplier communities will be watching closely to see
if money allocated for IT is ring fenced or gets swallowed up in
day-to-day running costs.