Chancellor Rishi Sunak has announced a £3.8bn investment in skills – a rise of 48 per cent over the course of this parliament. He also set out plans for a new national numeracy programme to improve maths skills for adults.
There was good news on the minimum wage and green initiatives but His £22bn-a-year target for spending on research and development will be delayed by two years, although public sector investment in R&D will rise to 0.7 to 1.1 per cent by the end of the parliament. He told MPs: “We are making the country a science and tech super power.”
The first successful bids for the “Levelling Up Fund” to tackle regional inequality were also announced. The government will spend £1.7bn on projects in 100 areas, including Aberdeen, Clwyd South, Stoke-on-Trent, Ashton-under-Lyne, Sunderland, Doncaster and West Leeds.
He also said borrowing was set to fall as a percentage of GDP from 7.9 per cent this year to 3.3 per cent in 2022, followed by 2.4 per cent, 1.7 per cent, 1.7 per cent and 1.5 per cent.
Business was quick to react to the key points of his statement. Mariano Dima, President of Soldo, said the Chancellor was faced with the “unenviable task of fixing public debt after a year of record spending”.
She added: “Many of the six million SMEs in the UK remain exposed post-pandemic. Intelligent investment is needed to stimulate economic growth, which should in turn should support a reduction in the UK’s public debt.”
it is essential that firms continue to review the support they have in place and what else they could be doing to meet employees’ changing needs
Michelle Ovens, Founder of Small Business Britain, described is as a ‘back to business’ budget”, adding: “Many small businesses still have a way to go to get their business ‘back to thriving’ again.
“Investment in infrastructure, skills and innovation are welcome, and the business rates relief for retail, hospitality and leisure is a very positive, timely step and will go a long way to help small businesses in these hard-hit sectors,” she said.
On jobs, Amanda Simpson, (left) CEO of the business service specialists, SVC Solutions, said: “Although any wage increase can help the current economy, it won’t solve the problems now facing the UK’s jobs market.
“Brexit and the pandemic created a perfect storm that has resulted in a serious labour shortage within the UK. Raising the National Living Wage to £9.50 per hour will not on its own alleviate the pressure on the jobs market, particularly as any impact from this will not come into effect until next April.”
Steve Bee, director of WorkLife by OpenMoney, welcomed any increase to the national living wage, adding that it “just addresses part of a much bigger problem. Our latest Small Business Monitor research found that some 27 per cent of SMEs have been approached by employees with concerns about their personal finances since April alone.
“This reflects the extent to which many UK workers are still feeling the financial strain brought on by the pandemic. Poor financial health can easily impact people’s mental wellbeing too, so it is essential that firms continue to review the support they have in place and what else they could be doing to meet employees’ changing needs.”
Rod Flavell, CEO of the technology training company FDM Group, said: “The Covid pandemic has devastated businesses as well as disrupting the education and careers of millions of people from across the country. The Chancellor’s proposals for skills bootcamps, extra funding for digital training and other lifelong learning initiatives is a positive step in the right direction, but so much more needs to be done.
“Far too many young people are still avoiding a career in critical subjects like computer science and coding, at a time when businesses are crying out for candidates with proficient technical expertise.”
Although any wage increase can help the current economy, it won’t solve the problems now facing the UK’s jobs market
Technology expert Sridhar Iyengar, Managing Director, Zoho Europe, welcomed skills training bootcamps, but added: “As part of the recovery, companies should also take the necessary steps to re-engage their people, particularly with the widespread adoption of hybrid and remote working, which can leave staff feeling isolated and out of the loop in terms of decision-making.
“This means modernising digital capabilities and implementing the necessary collaboration technologies, to bring people together in terms of managing workloads, interacting via video and team updates, ensuring everyone feels included and engaged.”
Dr Nik Kotecha, (left) Chairman of Morningside Pharmaceuticals, said is was a landmark budget which covered a number of very important parts of the economy, where extra investment and rate reliefs will stimulate growth now and well into the future.
“The Chancellor’s £7 billion tax cuts in Business Rate Relief for the Retail, Hospitality and Leisure sectors – the largest in 30 years – will go a long way to supporting areas of the economy which have been most significantly damaged by the Covid-19 pandemic and lockdowns,” he said.
Sandra Rowley at card payment solutions provider takepayments.com said:”While the announcement of the rise of the minimum wage is welcomed for workers, for small businesses owners this is another cost challenge to running their business.
“On top of the increase in energy bills, increase in petrol costs, rise in inflation and the confirmed national insurance increase, this 6.6 per cent increase would require an additional £1,000 per year for minimum wage full time workers.
Entrepreneurs and businesses need to be assisted on their journey – making sure they are supported and are receiving the right amount of funding
“Whilst there is some welcome news in the budget for hospitality, the overall business environment will remain challenging for those small, independent businesses in the UK.”
Sarah Barber, CEO of Jenson Funding Partners, said: “The Government’s investment towards R&D and innovation is welcome but there needs to be encouragement at the early stage investment level in order to ensure this innovation results in growth.
“Entrepreneurs and businesses need to be assisted on their journey – making sure they are supported and are receiving the right amount of funding. The Government’s skills pledge is part of this assistance, startups need access to talent. However, you would also hope there will be an emphasis on developing business skills to create future leaders – this is often overlooked.”
Benjamin Craig, Senior Manager R&D Tax Incentives at Ayming said: “It’s always encouraging to see the Government place such a strong emphasis on research and development, recognising its significance in stimulating economic growth. But while today’s numbers sound impressive – £20bn a year spent on R&D by the end of this parliament – the announcement may leave many in our industry scratching their heads as to where that investment is going to come from.”
Sunak jobs boost puts AI at the forefront