Spring 2017 Budget - Further Funding for Technology

Posted by James Pearce
March 10, 2017

The Budget included some interesting funding commitments for the technology. In summary, the Chancellor’s spending promises included:

  • £270m for disruptive technologies including robotics, biotech and driverless vehicle systems
  • £16m to create a 5G hub to trial the forthcoming mobile data technology
  • Funds for 1,000 new PhD and fellowship positions in science, technology, engineering and mathematics (Stem) subjects
  • £200m to support local full-fibre broadband network projects

So what do these mean in reality?

The spending promise for robotics, biotech and driverless systems is welcome, but doesn’t look sufficient to make a real difference. For example, the US pledged £3.3bn of investment in driverless technology alone over ten years, and private companies such as Amazon and Google are investing huge sums in these areas. The UK has some of the best minds in these fields, but there is a real risk that the draw of greater investment overseas will be too great to retain them. The funding of new PhD and fellowship posts is welcome, but retaining those people is key in the face of such huge global spending.

The 5G network remains something of an enigma. There is no doubt that the technology has the potential to be transformational in terms of data speeds, but mobile operators still express scepticism at the business case for spending billions on technology when demand for it is unclear. The research is useful, but without the commitment of the mobile operators it doesn’t mean much.

The support for full-fibre broadband refers to the provision of fibre all the way to people’s homes, rather than the prevalent current model, which is fibre to the roadside cabinet and then traditional copper wire to the home. This should dramatically increase speeds for some users, and one particular focus is on public buildings such as schools and hospitals. The voucher scheme to encourage businesses to sign up to the service is not a new idea – a similar scheme was introduced in 2013 but only 3,000 businesses signed up, and only £7.5m of the £100m fund was utilised. Many people still feel that the emphasis is on improving services to urban areas, whereas there should be more focus on improving broadband speeds in remote areas. The UK’s average broadband speed was 16.3mbps in Q4 2016, up 10% on Q3, but that still leaves us ranked 16th in the world so there is plenty of capacity to improve, and further investment is welcome.