Autumn Budget and Spending Review 2021: the tech aspects

October 27, 2021

The Treasury has announced the Autumn Budget and Spending Review 2021 which it says “takes place as the country focuses on recovering from a period of unparalleled global economic uncertainty and challenge to move towards a more promising future”. A key aim is to increase growth through expanding the use of data and digital technology and increasing innovation, while minimising digital harms to the UK’s economy, security and society.

This article considers some key announcements (which are not all new) of interest to tech lawyers and those advertising the tech sectors.

The government plans to invest £110 million for its new online safety regime through the passage and implementation of the Online Safety Bill. It also says that it will be supporting SMEs to scale up and providing bespoke support for the UK’s independent film and video game industries.

The government will also be launching a consultation on an online sales tax. The idea is that the proceeds would balance the tax imbalance between online businesses and bricks and mortar businesses and reduce business rates.

The government is increasing public R&D investment, providing £20 billion across the UK by 2024-25.  Significantly, this includes the aspiration to fund full association to Horizon Europe, enabling further collaboration with European partners. If this is not possible, the funding allocated to Horizon association will go to UK government R&D programmes, including those to support new international partnerships. £300 million for R&D programmes will aim to help commercialise low and zero emission technologies, including trials of three zero emission HGV technologies on UK roads and a multi-year clean maritime demonstration competition.

It will also establish the new Advanced Research and Invention Agency (ARIA) with £800 million allocated by 2025-26 (including £50 million from 2021-22). ARIA will carry out high-risk, high-reward research.

It will support R&D in the aerospace sector, co-investing with industry. The government is extending its long-term commitment to the aerospace sector, guaranteeing funding for the Aerospace Technology Institute (ATI) to 2031.

It also says that it will support priorities agreed by the National Science and Technology Council, such as quantum computing, AI, bioinformatics and space technologies.

It also intends to provide funding for the UK to launch a rocket into orbit in 2022, with the aim of becoming a leader in commercial small-satellite launch, as set out in the National Space Strategy.

The government is also investing in innovative green technologies in areas such as transport decarbonisation and green energy.

Alongside this, the government is reforming R&D tax reliefs to support modern research methods by expanding qualifying expenditure to include data and cloud costs, to more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK, and to target abuse and improve compliance.

In spring 2022, the government will launch visas to attract highly skilled people and support inward investment. The government is also launching a Global Talent Network to proactively find and bring talented people to the UK in key science and technology sectors.

The government has also indicated that it will support greater digital connectivity and tackling rural isolation by continuing the government’s £5 billion investment in Project Gigabit to support the rollout of gigabit capable broadband in hard-to-reach areas across the whole of the UK. Further, it will provide £180 million over the next three years as part of its £500 million investment for the Shared Rural Network, to deliver high-quality 4G mobile coverage to 95% of the UK. It will provide additional coverage to 280,000 premises with the aim of providing real benefits to rural areas.

The government also intends to continue capital investment of over £100 million to support improvements to the Foreign, Commonwealth and Development Office technology platform and cyber security infrastructure, with the aim of making the UK safer and more resilient to global threats.  It also plans to invest 37.8 million of additional funding to tackle cyber security challenges facing councils and invest in local authority cyber resilience.