Academics and industry figures have broadly welcomed chancellor George Osborne’s Autumn Statement, which included £600m for the UK’s scientific research infrastructure and £270m to fund improvements to further-education colleges.
Financial incentives for investing in plant and equipment, tax incentives for shale gas and confirmation of £1bn for a business bank designed to address the long-term structural gap in lending to small businesses were also announced in a raft of measures aimed at unlocking new business.
‘Starting on 1 January and for the next two years, I am… going to increase by 10-fold the Annual Investment Allowance in plant and machinery,’ said Osborne. ‘Instead of £25,000 worth of investment being eligible for 100 per cent relief, £250,000 worth of investment will now qualify.’
He added that the new business bank will be provided with £1bn of extra capital that is expected to ‘lever in private lending to help small and medium-sized firms and bring together existing schemes’, and that support would be provided for industries and technologies where the UK has a leading position.
‘With my right honourable friend the business secretary’s support, we will extend our global lead in aerospace and support the supply chains of advance manufacturing,’ he said.
To this end, an extra £120m will be invested in supply chains to encourage companies to invest in Britain and a new £1.5bn export finance facility has been launched to support the purchase of British exports.
Similarly, UK Trade & Investment (UKTI) has had its funding increased to help small and medium-sized business export abroad.
Dr Christos Tsinopoulos, senior lecturer in operations and project management at Durham University Business School, said: ‘Initiatives that are aimed at supporting the UK’s supply chain are always welcome.
‘The devil is always in detail, which is not yet available, and one could argue that, given the potential overall impact of the sector, the proposed sum is not significant.
‘Nevertheless, such initiatives send a positive signal about the importance of manufacturing in the UK’s economy and the role that the government wants to play in supporting it.’
Research is being supported with £600m of investment in facilities for technological research and development (R&D) and Research Council infrastructure.
According to Research Councils UK, the investment will support the development of innovative technologies and strengthen the UK’s competitive advantage in areas including big data and energy-efficient computing, synthetic biology, energy storage and advanced materials.
In a statement, Prof Rick Rylance, chair of Research Councils UK, said: ‘The funds made available today will underpin the key areas for capital and infrastructure investment identified in our new Strategic Framework for Capital Investment, announced just last month by the chancellor.
‘Such vital investment allows the Research Councils, collectively, to provide an infrastructure essential for the future sustainability of UK research competitiveness and it will support the UK in maximising its innovation potential and driving economic growth.’
Imran Khan, director of the Campaign for Science and Engineering, added: ‘We were hoping that the chancellor would continue his trend of supporting science and engineering and are really delighted with this new commitment — the total amount of new funding since 2010 has now reached almost £2bn.
‘Osborne’s consistency shows that he understands the UK must invest in becoming a high-tech nation. In the coming decades, we won’t be able to compete internationally on natural resources or cheap labour, so the government’s plan to build British excellence in areas such as synthetic biology and energy-efficient computing instead is absolutely critical.
‘We applaud the chancellor for supporting not only fundamental research, but also making science a bigger part of the UK’s industrial strategy.’
Britain’s road and rail infrastructure also received a boost with four major new road working schemes announced and a £1bn loan and a guarantee to extend London Underground’s Northern Line to Battersea Power Station.
Plans to extend High Speed 2 (HS2) to the north west and West Yorkshire will be announced by the transport secretary in 2013.
David Tonkin, Atkins’ UK chief executive officer, said: ‘Infrastructure is one of the few areas of investment that allows governments to deliver short-term gains in a way that has long-term benefits.
‘This is why it continues to play such a fundamental role in the UK economy. The funding schemes announced to support the extension of the Northern Line to Battersea Power Station and the accompanied redevelopment, major upgrades for four trunk roads and motorways… and the next phase of HS2 will provide a welcome boost for jobs and the economy. At the same time, they will help provide the backbone for the country to meet its long-term needs.’
Nick Baveystock, director-general of the Institution of Civil Engineers (ICE), added: ‘Clearly government has heeded the advice of many across the industry to increase capital expenditure on infrastructure and get shovel-ready road schemes moving — demonstrating to investors that the National Infrastructure Plan [NIP] is leading to visible activity.
‘The danger, however, as with the £5bn capital boost announced this time last year, is that this will fail to materialise and breed further scepticism. The Highways Agency will have a crucial role to play here, accelerating the delivery of the schemes while still ensuring they deliver value for money.
‘Progressing short-term projects to stimulate jobs and growth is vital, but it is important to remember that the NIP was intended as a long-term plan, with 70 per cent of investment to come from the private sector.’