IT industry wants infrastructure, tax breaks and SME support from Budget [March 21, 2012]
Chancellor George Osborne will announce the Budget at midday tomorrow, and IT businesses are calling for useful tax breaks and good national infrastructure, with support for small enterprises.
The government needed to ensure the UK has the right technical infrastructure in place to support business growth, according to Morag Lucey, senior VP at converged IT and billing firm Convergys Smart Revenue Solutions.
"We will be specifically hoping that the government finally puts its money where its mouth is and invests more in the rollout of superfast broadband in the UK," she said.
There was "a sizeable gap between the money committed by the public sector and the private sector" for broadband, she said. "There is a questionable commercial case for communications service providers to bridge that gap alone, but absolutely no question as to the societal and economic benefits the UK will reap from universally-available superfast broadband."
Open source software providers also expressed their frustration at the perceived barriers to non-proprietary system adoption, and said the government needed to tackle the problem.
Jim Shaw, general manager for Europe at Acquia, said that in spite of the government recently launching an open source toolkit on the Cabinet Office website in order to provide a level playing field, cultural barriers were holding departments back from making the change.
"An entrenched culture of scepticism against open source adoption is still rife in the public sector and these barriers need to be broken down for the huge range of benefits the technology offers to be realised," he said. In spite of open source systems powering the Cabinet Office website and some DirectGov services, as well as Transport for London's Oystercard using an open source infrastructure, he said, the UK trailed the US and France for adoption.
"With potentially huge savings to be made through efficient public sector IT initiatives, the UK cannot afford to maintain a lukewarm approach to open source adoption."
Small businesses said the Chancellor needed to offer them tax breaks, as well as assisting with effective ways to prevent late payment by their suppliers.
David Ballard, chief executive at IT consultancy Northdoor, said the government needed to consider "lowering the threshold for entrepreneurial relief to encourage a greater distribution of stake ownerships and including smaller owners or employees". He added: "Although there is increasingly generous relief for entrepreneurs, the government has set a 5 percent minimum stake to qualify for ownership."
The Budget needed to reflect the fact that "many of the green shoots we have seen recently have come from smaller businesses, such as the tech start-ups in London's Silicon Roundabout", he added.
The Forum of Private Business said the Chancellor must tackle late payment, as well as provide better information for supporting the new National Loan Guarantee Scheme that is aimed at ensuring businesses can access credit.
"Small business owners are being expected to drive the economy forward yet find that relentless cost increases, mounting late payments and continued credit restrictions severely hinder their ability to control cash flow," said FPB senior policy adviser Alex Jackman. "Cash is the lifeblood of any business and there must be definite action in the Budget if we are to mend this cash flow crisis among small firms."
While the National Loan Guarantee Scheme was "a welcome step towards bringing down the steep cost of lending", Jackman said the UK industry needs "more competition allowing non-bank funders to compete more effectively in small business finance markets dominated by the big banks".
"Particularly, we want support for innovative crowdsourced funding models that are less dependent on automated risk criteria, the over-reliance on these being a central criticism levelled at major lenders in recent years," he said.
Annette Iafrate, managing director at online marketing firm Constant Contact, said access to credit needed to be under a "simple, clear-cut scheme" that operated quickly.
Small businesses could help greatly with national job creation, given the right resources, Ballard at Northdoor said. "I would also like to see a Budget supporting SMEs in developing and deploying their own graduate programmes, which unlike large corporations, have relatively limited resources and experiences in developing such schemes."
Gary Stewart, director at IT and business change organisation Xceed, agreed. "If the government hopes to encourage private businesses to take up the slack of public sector redundancies then they need to give them the tools to become job creators. The restrictions of red tape, regulation, poor availability of credit and tax burdens all need to be stripped back if SMBs are to help bolster economic growth."