Three IT vets reflect on the new Budget’s impact on the channel

Labour’s first Budget in over a decade to impact businesses and people all over the UK

On 30 October 2024, the government presented its new Budget for the years to come, causing mixed reactions across the country and the IT channel.

New measures, such as the £40bn tax rise, coupled with some of the Prime Minister’s take on working people, have generated spirited debates on the internet and media in general.

With a little distance and perspective, CRN sat down with three industry experts to reflect on how the 2024 Budget will impact their business and the sector as a whole.

Chris Jones, head of public sector, Trustmarque

“The UK government's 2024 Budget presents both significant opportunities and challenges for the UK technology sector.

“The Budget's emphasis on public services and growth is a clear indication of the government's commitment to fostering a robust and competitive UK landscape.

“The chancellor actively commented on a ‘mission-led, reform-focused and technology-enabled' UK public sector which is a clear and positive message for the technology industry.

“There are clear spending and investment commitments to improve public services and drive growth.

“This growth must come with tackling inefficiency across public sector to truly maximise prosperity of our country and the living standards for all.

“Investing in infrastructure and connectivity will be crucial to strengthen the UK’s backbone for this growth and enhancing the UK’s national competitiveness.

“It is vital that this positively impacts all regions of the UK and the consultation on the UK’s industrial strategy must address this.

“The Budget allocates significant resources towards research and development in emerging technologies such as artificial intelligence, quantum computing and cybersecurity.

“These represent opportunities for the UK to be global leaders in these areas, driving growth whilst attracting global talent and investment.

“Coupled with this is the need to upskill and reskill the UK workforce to meet this changing economy.

“This Budget investment in AI can power the next generation of UK public services, we must as a collective find the right use cases with strong business cases to support it.

“In healthtech for instance, there is a potential to re-shape how we leverage AI to identify and adopt preventative measures to treatment.

“It must however be managed with the right standards, controls and governance.

“The Budget did however make clear the need for savings.

“There will be many departments that will have difficult decisions to make around spending and saving; it is vital that the first port of call is greater optimisation, efficiency and removal of duplication.

“It also includes tax changes aimed at boosting public investment and ensuring economic stability.

“Whilst we advocate the investment, the National Insurance changes will impact businesses across the UK.

“It is crucial for the government to balance these tax measures to avoid stifling economic growth while ensuring adequate funding for public services.

Again, tackling inefficiency is another significant level to make funding available.

“The UK government's 2024 Budget is a forward-thinking plan that underscores the importance of the tech sector in driving economic growth and innovation.

“While there are challenges to navigate, there is a real opportunity for the tech sector to leverage these opportunities and work collaboratively to improve public services and build a growing economy.

Read on to find out what business leaders at Performanta and Advania UK make of the Autumn Budget

Guy Golan, CEO & executive chairman, Performanta

“The Autumn Budget focused on the growth of digital industries across Britain.

“This was evidenced in comprehensive support for research & development, offering £20.4bn in funding grants, increasing DSIT’s budget to £13.9bn, and implementing a digital training roadmap in the form of Skills England.

“While the Budget appears to be a well-considered strategy of incremental growth, the omission of any clear pathway toward cyber safety fails desperately to acknowledge the vulnerable positions businesses large and small, as well as the public sector, find themselves in.

“The notion of ‘growth’ and ‘innovation’ is simply not achievable if cyberattack success rates continue at their current pace, causing severe damage to businesses and stakeholders and creating years of growth and trust setbacks.

“While part of the £2bn digital transformation of the NHS service is said to be directed toward increased cybersecurity - in response to the repeated cyberattacks the service has been hit with over the last five years - this investment is a drop in the ocean.

“Worse, it is evidence of the gap between the government’s positive perception of our digital security, and the far bleaker reality.”

Andrew Insley, chief financial officer, Advania UK

“This increase in capital gains tax will have a profoundly negative impact on the UK economy and businesses.

“Incentive for individuals and corporations to invest will diminish, as the potential returns would be significantly reduced.

“This is likely to stifle entrepreneurial activity, hinder innovation, and ultimately lead to a less dynamic and competitive economy.

“The uncertainty created by such a policy change is likely to deter investors, who would be less likely to take risks on new ventures or expansions.

“This will limit the availability of capital for businesses, hindering their growth and job creation potential.

“Increased employer national insurance (NI) contributions is a mixed bag.

“It will have a big impact on us as we employ 1,600 staff in the UK.

“We recognise our duty to hire and nurture young tech talent as we grow the business. Taxing these job roles more, does not support this aim.

“However, this does provide a much-needed sense of certainty that UK businesses have been craving.

“Unfortunately, it’s likely to hinder investment and economic growth for the UK economy due to increased costs.

“Still, this newfound certainty will empower long-awaited decisions from our clients on investments in areas like infrastructure, AI, and computing, which UK businesses have hesitated to pursue due to the uncertainty of the last 15 months.”