Autumn Budget: Prioritising Great Digital Connectivity in the UK

Firstly to recap, as Budget-watchers will remember that last year (Autumn 2016) the Government established a National Productivity Innovation Fund (NPIF) totalling £23Bn over the period to 2020/21 to boost UK productivity in general. The fund covers areas crucial for productivity eg. housing, transport, R&D and digital communications. Part of this increase relates to a £1.7 Bn ‘Transforming cities’ fund. Out of this, £740 million was identified to support the market to roll out ‘full-fibre’ and to enable UK to develop leadership in 5G technologies and services. In terms of digital communications interests, key features from NPIF included:

  • a new 100% business rates relief for new (only) full-fibre infrastructure for a 5 year period from 1 April 2017;
  • funding to local areas to support investment in a much bigger fibre ‘spine’ across the UK, prioritising full-fibre connections for businesses and bringing together public sector demand. A call for evidence on delivery approaches will be published shortly after the Autumn Statement;
  • funding for a programme of integrated fibre and 5G trials, aimed at enabling UK leadership in 5G technology and services.

In addition to NPIF, a further £400 million via the Digital Infrastructure Investment Fund (DIIF) was allocated, to be at least matched by private finance, for investment in new full fibre networks over the next 4 years, helping to boost market ambitions to deploy such networks to premises by 2020.

The Autumn 2017 Budget extends some of these initiatives with funding to 2022/23 and adds some new initiatives. The overall funding for NPIF is increased to £31 billion to cover the above extended period. Overall R&D spending of £ 4.745 Bn to 2020/21 now goes up by £ 2.3475 Bn to 2022/23.

In terms of digital communications, the Government is planning to invest a further £160 million from the original NPIF ‘pot’ on projects including,

  • £10 million to create facilities to test in conjunction with the National Cyber Security Centre, security of 5G networks can be tested;
  • £5 million for a trial, starting in 2018, to test 5G applications and deployment on roads, including exploring productivity benefits from self-driving cars;
  • launch of a £190 million Challenge Fund that local areas can bid for to deliver faster rollout of full-fibre networks by industry.

Government also intends to consult on commercial options to improve mobile communications for rail passengers with a planned investment of up to £35 million to enable trials. This will include upgrading the Network Rail test track in Melton Mowbray; install trackside infrastructure along the Trans-Pennine route between Manchester, Leeds and York; and support the rollout of full-fibre and 5G networks.

Phase 1 of the 5G Testbed and Trials Programme is currently undergoing competitive process, with further details about Phase 2 expected in 2018.

Raj Sivalingam, techUK’s Executive Director of Telecoms commented “We welcome the positioning of great digital connectivity in the UK as a strategic priority for the future economic and social welfare of the country. One immediate priority is that the number of 5G and fibre initiatives described above are properly co-ordinated to avoid duplication and ensure dissemination for national scale up. It is also vital that awareness of the project opportunities are spread far and wide across the digital communications and adjacent sectors in the UK. This is no trivial task and Government alone cannot achieve this. With our position at the heart of the UK’s digital industries, we look forward to contributing our insights and connections in helping to shape these initiatives for ultimate success.”

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More information is available on techUK’s Communications Infrastructure Programme.

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