It was pleasing to see that scaleups were referenced in a number of areas of the Chancellor’s Budget speech and in the accompanying documents. These included:

  • The specific recognition of the value of patient capital in allowing businesses to scale up, with the Chancellor noting the publication of the Government’s Action Plan “to unlock over £20 billion of new investment in UK scale-up businesses.”
  • An increase in the allocation for funding in R&D by £2.3bn and increasing the allocation for R&D tax credits to 12%.
  • Expansion of support under UKEF for exporters and a new campaign under the GREAT brand.
  • The announcement of a £10m Regulators Pioneers Fund augmenting ‘sandbox’ opportunities.
  • Broader initiatives to support skills, particularly computing skills, including through investment in lifelong learning.

We have pulled out those areas in the Budget which are most pertinent to scaleups and set them against our core themes of talent, leadership, access to markets, finance and infrastructure.

Economic and fiscal context

The Chancellor delivered a broad budget against a challenging fiscal backdrop. He was able to report that UK debt is forecast to peak at 86.5% of GDP in 2017-18, and then to fall in every year to 79.1% of GDP in 2022-23. This means that the Office of Budget Responsibility expects the structural debt target to be met early in 201819, leading to £14.8bn of headroom in the target year of 2022.

However, UK productivity is forecast to slip with GDP growth significantly below the OECD average for the immediate future. Revised OBR statistics report UK GDP growth of 1.5% in 2017, and forecast further slippage to 1.4% in 2018 and 1.3% in both 2019 and 2020, before picking back up to 1.5% in 2021 and 1.6% in 2022. For each of these years the UK will be growing at less than half of the current average for global growth (3.6% for 2017 and 3.7% for 2018).

In this context, the Chancellor focused specifically upon productivity and investment. The challenges which were identified most strongly by scaleup businesses in our Scaleup Business Survey 2017 are well represented by initiatives within the budget.


Skills and lifelong learning

The government will invest £42m to pilot a Teacher Development Premium. This will test the impact of a £1,000 budget for high-quality professional development for teachers working in areas that have fallen behind. This is intended to support the government’s ambition to address regional productivity disparities through reducing the regional skills gap.

The Government will ensure that every secondary school has a fully qualified computer science GCSE teacher, by committing £84m to upskill 8,000 computer science teachers by the end of this Parliament.

The government will also work with industry to set up a new National Centre for Computing to produce training material and support schools.

In the area of lifelong learning, the government will enter into a formal skills partnership with the TUC and the CBI to develop the National Retraining Scheme. Together they will help set the strategic priorities for the scheme and oversee its implementation, working with new Skills Advisory Panels to ensure that local economies’ needs are reflected.

As a first step, the National Retraining Partnership will oversee targeted short-term action in sectors with skills shortages, initially focussing on construction and digital skills. The government will invest £30m to test the use of AI and innovative EdTech in online digital skills courses so that learners can benefit from this emerging technology, wherever they are in the country.

The government will provide £8.5m over the next two years to support Unionlearn, an organisation of the Trades Union Congress to boost learning in the workplace.

Overseas Talent

Following the announcement before the budget to double the number of visas under the Tech City Scheme to 4,000, the Chancellor further noted that they will “invest £21m over the next four years to expand Tech City UK’s reach – to become ‘Tech Nation’ – and support regional tech companies and start-ups to fulfil their potential. Tech Nation will roll out a dedicated sector programme for leading UK tech specialisms, including AI and FinTech…Regional hubs will be located in Cambridge, Bristol and Bath, Manchester, Newcastle, Leeds and Sheffield, Reading, Birmingham, Edinburgh and Glasgow, Belfast and Cardiff.”


The Chancellor noted that programmes to improve local growth and help businesses would be announced in more detail in the Industrial Strategy White Paper.

“The UK is already one of the best places in the world to start a business, but some of the UK’s most innovative start-ups do not grow to scale due to lack of finance.

“The Budget provides businesses with additional support to grow and also to export. The government’s Industrial Strategy will provide further detail of how businesses in every part of the country will get the help they need to access support and improve their productivity.”

For more about the scaleup focus of the Industrial Strategy White Paper, see our separate blog post.

Access to markets


Support for exporters was announced: UK Export Finance (UKEF) will introduce a new guarantee to banks designed to increase liquidity in the supply chain. This is intended to improve exporters’ access to capital and enable their suppliers to fulfil new orders.

UKEF will also launch a targeted campaign to promote the support they offer to exporters and overseas buyers, as part of the wider GREAT campaign. The Department for International Trade will also set out details of their new export strategy review.


The government will establish a new £10m Regulators’ Pioneer Fund. This will help regulators to develop innovative approaches aimed at getting new products and services to market.


The ‘Action Plan’ to unlock over £20bn of new investment in UK scale-up businesses is set out in detail in the Government response to the Financing Growth in Innovative Firms Consultation. The highlights include:  

  • Establishing a new £2.5bn Investment Fund incubated in the British Business Bank (BBB) with the intention to float or sell once it has established a track record. By co-investing with the private sector, a total of £7.5bn of investment will be unlocked
  • Doubling the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme, and introducing a new test to reduce the scope for and redirect low-risk investment, together unlocking over £7bn of growth investment
  • Investing in a series of private sector fund-of-funds of scale. The BBB will seed the first wave of investment with up to £500m, unlocking double its investment in private capital. Up to three waves will be launched, supporting a total of up to £4bn investment
  • Backing new and emerging fund managers through the BBB’s established Enterprise Capital Fund programme, unlocking at least £1.5bn of new investment.
  • Backing overseas investment in UK venture capital through the Department for International Trade. The government expects this to unlock £1bn of investment.

The government will also support long-term investment by:

  • giving pension funds confidence that they can invest in assets supporting innovative firms as part of a diverse portfolio. The Pensions Regulator will clarify guidance on investments with long-term investment horizons. With over £2trn in UK pension funds, small changes in investment have the potential to transform the supply of capital to innovative firms
  • changing the qualifying rules in Entrepreneurs’ Relief to remove the disincentive to accept external investment and consulting on the detailed implementation of that
  • launching a National Security Strategic Investment Fund to invest in advanced technologies to contribute to the national security mission. The BBB will also support developing clusters of business angels outside London through a new commercial investment programme
  • extending the BBB’s Enterprise Finance Guarantee to March 2022 and expanding the programme to support up to £500m of loans per annum.
  • working with businesses, lenders, insurers, the BBB and the Intellectual Property Office (IPO) to overcome the barriers to high growth, intellectual property-rich firms, such as those in the creative and digital sector, using their intellectual property to access growth funding.



The Chancellor announced that he would increase the aggregated spend for the National Productivity Investment fund in the year of 2022/23. This fund represents an aggregated spend that encompasses:

  • R&D funding – notably by allocating a further £2.3bn for investment in R&D, and increasing the main R&D Tax credit to 12%.
  • Accelerated construction – through affordable housing, Housing Infrastructure Fund, small sites infrastructure and remediation, and a Land Assembly Fund
  • Transport – Roads and local transport, Next Generation Vehicles, digital railway enhancements, the Cambridge/Milton Keynes/Oxford corridor, the Transforming Cities Fund, the Tyne & Wear Metro.
  • Digital Communications – specifically including fibre and 5G investment


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