Budget 2017 to promise huge UK technology boost

The government’s 2017 Budget will have a major focus on technology and innovation as chancellor of the exchequer Philip Hammond allocates significant funding to secure “the UK’s position as a world leader in transformational technologies”.

This includes funding for artificial intelligence (AI), driverless cars, next-generation 5G and increased investment in research and development (R&D)

Wednesday’s budget will promise £75m funding for AI, including up to £45m to build AI capability and knowledge by increasing the number of AI PhD students to 200 a year.

Last month, Wendy Hall and Jérôme Pesenti published their report on AI, entitled Growing the artificial intelligence industry in the UK, which said the AI sector could squander a historic lead unless government, industry and academia come together to give it cohesive support. Some £9m of the AI funding in the Budget will go towards a new advisory body to remove barriers to AI development, according to Treasury sources.

In September this year, Hammond told a House of Lords select committee that he expected to see productivity improvements soon in government from the application of AI to “low-level decision-making”. 

Treasury sources said the chancellor will also announce reforms to ensure the UK leads the way in on-road testing of driverless cars, with the aim of seeing autonomous vehicles used on UK roads by 2021.

The Treasury estimates that the driverless car industry will add £28bn to the UK economy by 2035, and it wants to lead regulatory changes and remove barriers to on-road testing. The government will also launch a plan to enable organisations to explore ways of testing “self-driving technology through digital simulation”.  

Earlier this year, the government published its 5G strategy, which aims to “set out steps for the UK to become a world leader in the next wave of mobile technology and services”. 

Hammond will announce £160m to develop and launch next-generation 5G mobile networks across the country. The funding will go to the National Cyber Security Centre (NCSC) to ensure the networks work safely and securely, and will also be used to test 5G on roads to “help lay the foundation for driverless cars”.

This follows on from the government’s existing £25m funding pot to develop and test 5G mobile network technology to help cement the country’s position as a leader in 5G, which was announced in October. 

The Budget will also see £35m invested in connectivity on trains to ensure rail passengers have reliable mobile connections, with trials beginning on the trans-Pennine route.

The budget will also include £100m to train 8,000 more computer science teachers and create a new National Centre for Computing to “ensure the next generation is equipped with the skills they need to thrive in the modern world of work”, according to Treasury sources.

The government will also create a retraining partnership between the CBI, the TUC and government, including a £36m investment in digital skills courses using AI.

Earlier this month, prime minister Theresa May told the CBI conference that the UK “must embrace technological change” and said that the Industrial Strategy whitepaper – due next week – will have a significant focus on innovation and technology to ensure the future of the UK economy in a post-Brexit world. 

The government will work with industry to increase R&D spending to 2.4% of GDP by 2027 and make an extra investment of £2.3bn in 2021/22.

Business secretary Greg Clark said the Industrial Strategy will commit to “building a knowledge and innovation-led economy” and that the increase in R&D is a “landmark moment for the country”.

Commenting ahead of Wednesday’s Budget, TechUK CEO Julian David said the chancellor must give certainty to business “where little currently exists”.

“The chancellor has said he wants to put the UK at the forefront of the global technology revolution,” said David. “Now is the time to make good on that desire.

“That means getting more businesses to adopt basic digital processes that will enable them to take advantage of future productivity boosters like AI and prepare for new digital mechanism of taxation. It also means setting a clear path to meet the government’s commitment to increase R&D spending, at a time when many businesses are already feeling the pinch from uncertainty around EU programmes such as Horizon 2020.”