Budget: Hammond 'between a rock and a hard place'

Jessica Figueras, chief analyst at GlobalData explains that Philip Hammond had to choose between several difficult options in this budget

No Chancellor can please everyone, but Philip Hammond was between a rock and a hard place. The UK is already the slowest-growing G7 economy and forecasts show our economic prospects worsening. Yet demands for more spending in health, education, housing, public sector wages and benefits just continue to get louder.

Hammond and his government are not politically strong enough to offer a major break with past policy, so the Budget was mainly about tweaking existing plans. Technology will continue to play a role in helping the public sector cope with strapped budgets. For example, £2.6bn will help local clusters of NHS organisations fund their transformation plans.

For the tech industry, Industrial Strategy is absolutely the area to watch - it's clear this is a genuine government priority, and it's good news that there is cross-party consensus on its importance. We'd already heard some of the announcements, such as a £1.7bn transforming cities fund announced last week, which will focus on transport links and economic development in city regions. The GovTech Catalyst was also pre-announced; £20m to support innovators won't go far, but it's a statement of support for GDS that it will host the unit.

Otherwise there's not much new cash for technology initiatives, although we saw a little more detail about how previously announced funding will be spent, in advance of the big Industry Strategy launch next Monday 27th. That will tell us what the government's partnership with industry will look like. The Made Smarter Review launched last week, a major piece of work commissioned by the government and led by firms including Siemens, Cisco, IBM, Accenture and Atos, laid down some big challenges on digital investment, commercialisation and training - we'll be watching with interest to see which recommendations are adopted.

It was good today to see some new strategic bodies to support the UK's strengths in key technology areas; the Centre for Data Ethics and Innovation with £75m funding for AI, and the Geospatial Commission, both being set up away from GDS and Whitehall. Today's Budget also featured more tactical tech funding pledges; £30m for digital skills funding, and £84m for computer science teacher training - not a guaranteed winner given that previous initiatives suffered from lack of trainee uptake.

There was £160m for 5G mobile networks, which sounds as if the National 5G Innovation Network that received £16m funding earlier this year is scaling up; presumably a sign of positive results so far. There's also more cash for full-fibre broadband networks; whilst that's a feature of most recent budgets, at this rate it will be many years until the UK's broadband infrastructure catches up with its peers.

There wasn't much on Brexit, which will have a significant impact on the Whitehall departments most exposed to EU policy. The government had already funded £250m contingency plans for a no-deal Brexit, which are earmarked to enable HMRC, Defra, Home Office and the Department for Transport plan for the possibility of new border controls. The Treasury could also tap into £12bn of contingency reserves if needed.

HMRC continues to benefit from tech investment; the UK is already pretty good at collecting tax revenues, and an extra £155 million announced today will help it to continue its data-driven mission to bear down on tax evasion and avoidance.

Jessica Figueras is chief analyst at GlobalData