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Tech experts share perspectives on UK Spring Budget 2024

Written by Tue 12 Mar 2024

In the Spring Budget 2024, the Chancellor of the Exchequer, Jeremy Hunt, announced plans to strengthen the UK’s position as a leader in digital technology and artificial intelligence (AI). Industry experts have provided insights into the budget’s merits and shortcomings.

The Spring Budget addressed key challenges like fraud, digital transformation in public services, and skills development for the future economy.

Key Technology investments involved doubling the i.AI team to enhance Government AI expertise and allocating £34 million ($43.5 million) to expand the Public Sector Fraud Authority, resulting in £100 million ($127 million) in savings through fraud prevention.

Technology and AI Focus

Through the Budget the UK reiterated its focus on technological innovation, with particular emphasis on digital technology and AI. Measures included facilitating access to public compute facilities and implementing AI safety initiatives. 

“Since 2010, the Government has provided targeted support to priority growth sectors which are helping to turn the UK into the world’s next Silicon Valley: creative industries; advanced manufacturing; green industries; digital technology and AI; and life sciences,” said the Government in the Spring Budget.

Police forces also received £230 million ($294 million) to pilot cutting-edge technologies such as live facial recognition and drones, supported by establishing a Centre for Police Productivity.

To improve data access and quality, the Government introduced new data pilots totalling £3.5 million ($4.4 million). These pilots aim to enhance AI quality in education and improve data access in adult social care settings.

The Government also confirmed the design details of data research cloud pilots announced last year.

Government Initiatives Supporting SMEs and R&D

The Government introduced several initiatives to support small and medium-sized enterprises (SMEs). The SME Digital Adoption Taskforce is being established to assist SMEs in adopting digital technologies to enhance their competitiveness and productivity. 

A £7.4 million ($9.4 million) AI Upskilling Fund pilot is also being launched to equip SMEs with the necessary AI skills for future growth and innovation.

To foster innovation and competitiveness, the Government allocated £360 million to boost British manufacturing and research and development (R&D) efforts. 

An additional £100 million ($127 million) over the next five years was allocated to the Alan Turing Institute to bolster the UK’s leadership in AI and data science research.

Government Aims to Reinvigorate Workforce

The UK Government said it will intensify efforts to reinvigorate the workforce, with a focus on enhancing productivity and supporting employment.

The Government has allocated funding to sectors like healthcare, education, and defence while committing £3.5 billion ($4.4 billion) annually by 2024 and 2025 to improve employment opportunities. 

Measures included investing in technological advancements, reforming NHS operations, and improving maternity safety. These initiatives aim to foster economic resilience and empower individuals in the workforce to help ensure a sustainable and inclusive recovery.

Industry Experts Weigh-in on the UK Spring Budget 2024

AI Failings in the Spring Budget

Mark Seymour, Engineer at electronic systems design company, Cadence, said the budget did not indicate the Government has considered the environmental practicalities of powering AI growth. Seymour added that AI investment is a pragmatic one, and its desire to be the next Silicon Valley is aspirational.

“Today’s budget gave no indication that they have considered the practicalities of powering AI growth or planned for how they will assimilate AI goals with sustainability ones,” said Seymour.

Seymour stressed to offset the strain and balance the need for more technology with new ESG regulations, facilities must be given the tools to achieve greater capacity out of their current environments. 

“Without this further investment, we will be pushed to build new data centres prematurely at great financial and environmental expense,” said Seymour.

Sarah-Jayne van Greune, Chief Operating Officer at digital payment solutions companies, Payen and ILIXIUM, said whilst AI investment is key in establishing the UK as an AI powerhouse, there needs to be an equal distribution of investment nationwide.

“If investment and support are not distributed equally, that goal may not be achievable as some of the brightest members of society will no’t have the tools to bring their ideas to life,” said van Greune.

Van Greune stressed that ultimately equality in investment will ensure the Chancellor can put the UK on the path to becoming the next Silicon Valley.

Technology Skills Training Vital to Harness AI 

Peter Turner, Chief Commercial Officer at global technology company, TeamViewer, acknowledged the Chancellor’s positive efforts to re-engage people in the workforce.

However, Turner emphasised the importance of pairing workforce reintegration with investment in technology skills to mitigate high turnover rates.

“This means prioritising training for those entering our vital industries, as well as reskilling individuals already in work to ensure they advance and feel valued in their roles,” said Turner.

Turner added technology, especially innovations like augmented reality, can greatly speed up on-the-job training, which will allow workers to progress faster and ultimately improve worker satisfaction. 

Laura Webb, Public Sector Technology Transformation Lead at professional services company, KPMG UK, agreed with Turner’s sentiments. Web acknowledged the vital role of AI in the public sector and highlighted the lack of skills training to harness the potential of this technology.

“To ensure the long-term success of these new initiatives, they must be accompanied by the necessary training to enable workers to develop the skills needed to use AI effectively and get the most value out of this technology,” said Webb.

Digital Services Adoption Acceleration Necessary

Dr Chris Francis, Director of Government Relations at software and technology solutions company, SAP UK&I, emphasised the vital role of digital services in boosting productivity, particularly with AI capable of adding £31 billion ($39.6 billion) to the UK economy.

“However, less than a quarter of companies are ‘digitally intensive’ in their business processes, meaning most have not undergone a digital transformation. The Government can do more to accelerate adoption,” said Francis.

Francis recommended the Government integrate prompts in the tax system recognising digital services as operational expenditure, not capital expenditure. Francis also advocated for infrastructure support, increased funding for digital skills, and prioritising tech adoption on the business agenda.

Unlocking Data Efficiency Through Technology

Rupal Karia, Country Leader of UK&I at data processing company, Celonis, stressed the importance of leveraging technology for data-led insights in boosting productivity.

“With vast amounts of data departments not knowing where to start, the Government needs to use technology which provides data-led insights,” said Karia.

Karia suggested process mining can address this issue as it finds and fixes process inefficiencies, providing organisations with a data-based method of generating a positive impact on the top, the bottom and the green line. 

“Rather than overhauling existing systems, which can be costly, process mining enables companies to gain maximum value within their current processes. This allows greater efficiency, increases productivity and accelerates digital transformation,” said Karia.

Lack of Cybersecurity Investment a Cause for Concern

As part of the Spring Budget, the Government allocated £11 billion for defence between 2023 and 2024, and 2027 and 2028, to improve the resilience and readiness of the UK’s conventional and nuclear forces. However, there was no mention of any funding towards cyber defences.

Al Lakhani, CEO of Phish-proof multifactor authentication company, IDEE, said the Government does ‘so little to protect UK businesses and public sector bodies from cyberattacks’, despite, spending billions on its defence budget and millions on immigration. 

“We all understand that attacks no longer need to cross physical boundaries to create havoc. But its legislation regarding the use of cybersecurity solutions is weak … and its investment in cyber is generally lacklustre,” said Lakhani. 

Lakhani added with significant investments in digital transformation, like in the NHS and public sector, the threat from hackers is heightened. 

“Spending on the military and clamping down on immigration clearly play better with the voters. But if the Government continues to do so at the expense of protecting the country, its people, its businesses and its public services, from the huge, evolving threat of cyberattacks, then it is sleepwalking into a digital war zone where defeat is guaranteed,” said Lakhani.

In November, the Chancellor’s ‘Autumn Statement for Growth’ budget prioritised fortifying the UK economy with significant tax cuts for individuals and businesses, aiming to stimulate growth and productivity. 

It also included a £20 billion ($25.5 billion) annual boost in business investment and a substantial tax cut for workers. A highlight wais a £500 million ($637 million)  investment in AI, fostering breakthroughs and bolstering the AI startup ecosystem.

Five new Quantum Missions were also introduced to foster collaboration and innovation. Measures to support business scale-ups include clearer regulations and the introduction of regulatory sandboxes was also announced.

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Written by Tue 12 Mar 2024

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