A plethora of policies affecting the technology industry
were announced in the2009 Budget, with mentions of
high-tech green investment and broadband infrastructure
highlighting the growing importance of IT in mainstream
politics.
IT industry experts said there were a range of relevant
announcements, but some of the longer term effects are as yet
unclear.
The announcements came just a day after the government published
the
Operational Efficiency Programme which recommended spending
£7.2bn a year less on IT through efficiency savings.
Other articles on the budget: |
Green technology investment was high on the agenda, with £750m
earmarked for emerging technologies and £405m for advanced green
manufacturing.
But Barry Murphy, partner and head of technology at
PriceWaterhouseCoopers, said it was unclear how or when firms would
see the benefits.
"There are a lot of headline announcements but I am not entirely
sure what the delivery mechanism is for companies who will need the
investment. There is recognition of our need to be at the forefront
of a new knowledge economy, but I am not clear on exactly where the
money will go."
Good news came in the form of a temporary increase in the main
rate of capital allowances, which has been doubled to 40% for this
year. This will be helpful for investment - including
communications companies investing in broadband infrastructure -
but some warn it may not be enough.
Philip Virgo, strategic advisor at the Institute for the
Management of Information Systems, said, "I would call for 100% for
two years, but at least this recognises the importance of capital
allowances and it is better than nothing. This may cause people to
bring forward investment they were planning anyway, but it is not
enough to trigger things that would not otherwise happen. There is
also a need to take a look at the valuations used for business
rates."
As the recession continues, Alistair Darling looked at getting
those who are struggling back into work. He pledged £1.7bn to help
16 and 17 year olds stay in education and get under-25s into a job
or a training course.
Matthew Poyiadgi, European vice-president at CompTIA, the global
IT industry trade association, said some of the money should be
targeted at the technology sector, which has been languishing under
a
skills shortage for years.
"This is great news as long as it is targeted at sectors such as
IT and technology that have an urgent need for new blood - and
which has been highlighted in the budget as an area of high growth
that warrants particular attention. Funds should be directed to
this highly skilled sector; not only are we crying out for good
people, but there is plenty of training available to get them
started."
At the other end of the scale, high earners will be hit. Those
earning enough will, from April 2010, be paying 50p on every pound
over £150,000.
Finally, a push to improve broadband infrastructure is welcome
to Denise Plumpton, director of information at the Highways
Agency.
She said, "I was delighted to read of the commitment to ensure
the entire country and economy benefits from the digital age and
the extra funding for digital investment to help extend the
broadband network and deliver the vision for Digital Britain, is
really welcomed. It reinforces that ICT really has come of age in
the public arena.
But the move was not enough for John Higgins, director general
at Intellect. He said, "Next-generation broadband, the crucial new
infrastructure demand of the 21st century so far, is given some
necessary but nowhere near sufficient help. And the case for a
public private partnership on the 3i model is put out for review,
at a time when high-tech start-ups, who could be the engines of
future growth, risk perishing in the cold economic climate for lack
of venture and risk capital. In both of these cases the time for
reviews is all but over and the time for action is here."
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