In what has been described as the most important budget for business in a generation, the Chancellor of the Exchequer, Rishi Sunak, presented the 2021 budget to Parliament on 3 March 2021. (Our recent briefing on the Spring 2021 Budget can be found here).
At the same time as publishing the Budget statement, the government also published a paper titled “Build Back Better”, expanding on the budget’s plans to boost investment in innovation in the UK.
The following proposals are likely to be of particular interest to the UK tech sector:
- ‘Future Fund: Breakthrough’: The government announced it would commit £375 million in public funds to establish a new funding programme, which is described by the Treasury as “a new direct co-investment product to support the scale-up of the most innovative, R&D-intensive businesses”, likely to be highly innovative life sciences and tech companies. The scheme is backed by the British Business Bank which will take equity in funding rounds of over £20 million led by private investors.
- ‘Help to Grow: Management’ and ‘Help to Grow: Digital’: The Chancellor of the Exchequer also announced the government’s two new schemes designed to subside the cost of upskilling for businesses. The Help to Grow: Management scheme intends to equip up to 30,000 SMEs across the UK with MBA-style training over three years. The Help to Grow: Digital scheme will help SMEs adopt the latest productivity-enhancing software (eligible businesses will be able to get a 50% discount on the purchase of approved software, worth up to £5,000) and provide an online platform dedicated to providing free advice to businesses on using the technology. The aim of these initiatives, according to the Treasury, will be to “help businesses to save time, reduce costs, and reach more customers”.
- Closing the skills gap:
- Fast-track visa: As recommended in the recent Kalifa Review of FinTech (see our article here), the budget includes a new fast-track visa hoped to attract highly skilled workers and counteract the skills gap which presented itself within the tech sector post-Brexit. Although the new visa is aimed at boosting the tech sector generally, it is the UK FinTech sector set to benefit the most.
- Increased traineeships and apprenticeships: The government is providing an additional £126 million in England for high quality work placements. Employers who provide work experience to trainees will be funded at a rate of £1,000 per trainee. The government has also extended the apprenticeship scheme and increased the payments for employers who hire new apprentices. Businesses who hire new apprentices between 1 April 2021 and 30 September 2021 will get £3,000 per new hire, double the amount previously.
- Net zero digital innovation: The increased focus on green investing is sharpening with the government’s focus to transition towards a net zero society by 2050. The government has pledged £1 billion towards green energy innovation schemes to support the development of new solutions to reduce carbon emissions and accelerate near-to-market low-carbon energy innovation.