Last Wednesday, Chancellor Rishi Sunak delivered the Spending Review and Autumn Budget laying out the Government’s spending priorities for the next three years.

This is a summary of how the measures and announcements will affect scaleup enterprises, technology, and entrepreneurs across the UK.

Skills and Talent.

Access to talent is critical for the UK tech industry. The tech talent is suffering a shortage, with some estimating that tech vacancies make up 13% of all UK job vacancies.  The Spending Review proposes to introduce a new “scale-up visa” to attract highly skilled people from abroad to the UK’s “fastest-growing businesses”.  The new visa will allow organisations with three years of 20% growth in either employee numbers or revenue to sponsor these visas. Applications will be open to applicants with a job offer paying a salary of at least £33k, and who pass a language proficiency test,

Sunak also proposed that the government will also launch a Global Talent Network, beginning in Silicon Valley, Boston, and Bangalore. This network will partner with businesses and research institutions to find the talent the tech and science sectors require to maintain growth and prosperity.  It also will offer support to tech talent who are moving to the UK.

In addition, the Government is aiming to grow the size of Skills Bootcamps significantly, with a particular focus on the digital sector.

Research and Development.

It was announced that R&D spending will go from £14.8bn per year to £20bn a year by 2024/25, and then increase to £22bn a year by 2026/27.  This will be coupled with expanding the qualifying expenditure for R&D tax credits to include data and cloud computing costs to support ground-breaking R&D methods.

Investment in tech and innovation.

The review announced a £1.4bn Global Britain Investment Fund to support new investment in UK manufacturing industries, including zero-emissions vehicles and life sciences.

Access to finance.

From creation to listing, Scaleups require access to finance and schemes that support their financial independence and freedoms.  The review included an additional £312m a year to maintain the Start P Loans Scheme which will support 33,000 UK entrepreneurs.

This will be enhanced by more than £1.4bn for the British Business Bank. The money will focus on supporting Regional Funds and the Regional Angels Fund.

There was also a promise to develop the pension charge cap.  This potential development will support institutional investors to re-route more capital into venture capital and the technology ecosystem more broadly.

Digital Infrastructure.

Innovation is reliant upon organisations having the right digital infrastructure to be able to access the potential that technology holds for their businesses. The government is promising a further £1.2bn for gigabit broadband, and committing to a £114m increase in the National Cyber Security Programme which will support UK business’s access to tech.

Fintech.

The government will send funds to a new Centre for Finance, Innovation and Technology (CFIT). This will focus on accelerating the UK fintech sector and tackling the barriers to its growth.  It was also announced that the Bank Levy Annual Allowance will increase to £100m to help support the neobanks.

fintech innovation fingers tablet concept

Despite the pandemic, UK tech scaleups and entrepreneurs continue to be a leading voice in the tech and digital ecosystem.  The government has gone some way in addressing the financial barriers that tech scaleup business leaders face when wishing to grow their organisations. Access to capital, particularly outside London, is one of the highest hurdles limiting the growth of the UK tech sector and the companies it comprises.  The shortage of tech talent is another, and while the scaleup visa scheme is welcomed, it doesn’t address the red tape and bureaucracy that EU candidates must tackle. The reality remains that most EU candidates would prioritise relocating within a member state than jumping through hoops to work and live in the UK.

What do you think about the government’s approach to supporting tech and digital scaleup organisations? Please leave your comments below.

Are you a tech, digital, or data scaleup and looking to grow your team? We source the top tech talent in the UK, able to power your business and help it thrive. Reach out today to find out how we can support you.

About the author: I manage the recruitment for a range of digital roles for my clients on both a retained and contingency basis. I specialise in senior and confidential appointments, always giving a first class representation of a client’s employer brand.

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