What’s in the autumn budget for digital tech businesses? Key impacts unpacked

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Rachel Reeves, the Chancellor of the Exchequer presented her Autumn Budget to Parliament on Wednesday 30 October 2024. The UK’s Autumn Budget 2024 has arrived with bold ambitions for digital transformation, promising substantial investments aimed at reshaping the tech landscape.

From expanding digital infrastructure in underserved areas to pushing the adoption of advanced technologies in small and medium-sized enterprises (SMEs), the government is billing this budget as a tech-forward initiative.

Yet, while the promises sound impressive, tech businesses may find the fine print lacking clarity, with implementation plans thin and timelines uncertain.

In today’s briefing let us explore key takeaways from the Autumn budget 2024.

A Major push for public investment in technology

Central to the Autumn Budget is a substantial ￡100 billion commitment to capital investments over the next five years, with a focus on digital transformation and infrastructure.

The government has allocated a remarkable ￡131 billion for capital Departmental Expenditure Limits (DEL) for 2025-26, which includes a 9.9% increase from the previous year.

This boost is expected to fund improvements across transport, housing, research, and the NHS—areas that will see digital tech enhancements aimed at enhancing productivity and modernizing essential services.

"Public investment is crucial for driving long-term economic growth, and this budget underlines our commitment to a technology-led approach," said the Chancellor, emphasizing the role of digital transformation in bolstering the UK economy.

While ￡131 billion has been earmarked for capital expenditures in 2025-26, specific breakdowns on how funds will be allocated across departments or sectors are sorely missing. The absence of these details makes it difficult for digital tech businesses to assess potential opportunities or make informed strategic plans.

“It’s great to see a headline number, but without any concrete plans, it’s all just talk,” commented a frustrated tech CEO. “If they want to boost private sector engagement, they need to be specific about how businesses can participate and benefit.”

Digital transformation in public services: Efficiency and better outcomes

The UK government is also rethinking public service delivery by embedding technology across all its departments.

The budget signals a "technology-enabled" approach, with the Department for Science, Innovation, and Technology (DSIT) designated as the new digital nucleus within the government.

This department will champion the digital transformation initiatives, ensuring tech solutions are applied to improve efficiency, reduce costs, and deliver better outcomes for citizens.

Analysts note that this approach may help address challenges in healthcare, law enforcement, and social services, where technology can streamline processes and enhance service delivery.

With DSIT at the helm, experts predict that the UK will see greater consistency in tech policy, likely benefiting tech companies through increased public sector tech contracts and innovative projects.

A particularly high-profile part of the budget is the NHS’s digital transformation, receiving over ￡2 billion to modernize its digital framework. This funding will support electronic patient records, cybersecurity measures, and the expansion of services through the NHS app, which allows patients to manage appointments, access health records, and receive reminders.

This digital push in the NHS could present opportunities for health tech companies that specialize in digital records, data security, and patient management solutions. The improved digital infrastructure in healthcare is expected to lead to significant cost savings, better patient outcomes, and a more efficient NHS.

However, experts notes that implementing technology across large public institutions like the NHS or local councils is no small feat, requiring years of planning, procurement, and integration.

Without a clear execution plan, these ambitious promises may fall victim to bureaucratic inertia and slow-moving processes. Tech businesses may find themselves caught up in prolonged bidding processes with no guarantee of viable contracts or timely payouts.

Supporting SMEs: Doubling down on the “Made Smarter” programme

For SMEs, which make up the backbone of the UK economy, this budget has carved out specific provisions to help them adopt digital tools.

The Made Smarter Adoption programme, initially piloted in selected regions, will expand nationwide with its funding doubled to ￡16 million by 2025-26.

This programme is a game-changer for manufacturing businesses looking to adopt advanced digital technologies, offering grants, expert consultations, and training resources to ease the transition into a digitally enabled business model.

The SME Digital Adoption Taskforce, now extended, will work to support smaller businesses outside of manufacturing.

The government has set aside an additional ￡4 million for pilot packages that encourage broader tech adoption among SMEs, providing a targeted boost to the sector's productivity and competitive edge.

While doubling sounds positive, ￡16 million across nine English regions is only a drop in the ocean given the thousands of SMEs needing support to adopt new technologies.

The same applies to the SME Digital Adoption Taskforce, which lacks specific plans or accessible funding pathways to make a tangible difference for the smaller companies it claims to support.

Tech industry experts warn that without a more comprehensive approach, these programmes will likely fall short of making the digital impact required for SMEs to compete globally.

Many SMEs need more than small grants—they require sustained investment, practical guidance, and a tech-friendly regulatory environment.

Bridging the digital divide: Project Gigabit and the shared Rural Network

With over ￡500 million dedicated to digital infrastructure, the budget addresses a long-standing issue—unequal access to high-speed broadband, particularly in rural areas.

Project Gigabit and the Shared Rural Network aim to extend gigabit broadband and mobile network coverage to underserved areas, bringing high-speed internet to more UK households and businesses.

"Expanding broadband access is not just about connectivity; it’s about equality," noted the DSIT. "With faster internet, businesses can grow, rural communities can thrive, and we can close the urban-rural divide."

For some comentators,the government’s goal of achieving nationwide gigabit broadband coverage by 2030 feels out of reach given the current pace and previous delays on similar infrastructure projects.

The digital divide remains a serious issue in rural and remote areas, where businesses, schools, and communities struggle with inadequate connectivity.

But by focusing on broad timelines and avoiding specific regional commitments, the budget leaves too much room for further delay and potential cost overruns.

“This government has promised high-speed broadband for years, yet we’re still lagging. What guarantee do we have that this time will be different?” voiced a rural business owner.

Unlocking innovation with a national data library

Innovation in the tech sector heavily depends on data, and the government is stepping up by announcing a National Data Library.

This initiative will make a range of public data available to researchers and businesses, providing valuable insights that can spur product development, drive scientific research, and improve service delivery across various sectors.

The National Data Library could give tech companies access to structured datasets that fuel data-driven solutions, potentially leading to breakthroughs in healthcare, environmental monitoring, and urban planning.

However, there are concerns over privacy, ethical considerations, and security risks. Privacy advocates warn that without clear guidelines, this library could become a bureaucratic quagmire, with risks of misuse and overreach.

For tech companies considering partnerships, the lack of regulatory guardrails raises concerns over liability and reputational damage, making the initiative potentially more trouble than it’s worth.

A Simpler tax system: Easing dministrative burdens for businesses

The budget also signals a streamlined tax system that may ease the administrative load on digital businesses.

The government has committed to improving customer service from HMRC, with initiatives like the upcoming electronic invoicing consultation in 2025.

A further expansion of Making Tax Digital for income tax self-assessment is set to roll out, which will require more businesses to digitize their tax records and submissions.

For digital tech business owners, these moves signal reduced bureaucracy, allowing them to focus more on innovation and growth.

Analysts remind that the move towards electronic invoicing and digital tax self-assessment may require additional software and compliance costs, instead of simplification, these policies may also create more complexity for businesses navigating the new requirements.

Key Concerns: Implementation and Talent Shortage

Despite the optimistic tone, there are some industry concerns about how effectively these ambitious plans will be executed.

While funding is high, detailed implementation plans are still unclear, prompting some tech business owners to call for greater clarity on timelines and specific allocation strategies.

Additionally, there is concern that an overly cautious approach to spending, particularly in public tech procurements, could lead to stifled innovation.

The digital tech sector also faces a skills shortage, and the budget’s silence on workforce development could leave a gap in the industry’s growth potential.

Tech businesses are hopeful for future policies that emphasize talent attraction, training, and retention to ensure the UK remains a competitive tech hub.

The bottom line

While the 2023 budget focused on establishing the UK as a leading tech ecosystem in Europe, the 2024 budget emphasizes a more mission-led and reform-driven approach to public spending, with technology serving as a key enabler.

In all, the Autumn Budget 2024 lays a strong foundation for digital growth in the UK, opening doors for tech entrepreneurs, digital innovators, and SMEs. From public service tech transformations and digital infrastructure boosts to simplified tax systems and strategic support for SMEs, the government’s tech-forward approach holds promise.

Digital tech leaders now have ample opportunities to participate in this evolving landscape, and by working alongside government initiatives, they can help steer the UK towards a more connected, productive, and innovative future.