Finance · 22 November 2017

Autumn Budget 2017: National Productivity Investment Fund increased to 31bn

National Productivity Investment Fund gets extension
The National Productivity Investment Fund has been boosted?
In this afternoon’s Budget announcement, chancellor Philip Hammond has announced the National Productivity Investment Fund has been extended for another year, and expanded to be worth more than 31bn.

Some 2.3bn extra will be allocated for research and development (R&D), 20bn for business investment, and 500m for projects like AI, 5G and broadband. In addition, the R&D tax credit will be increased to 12 per cent.

The move comes in response to the UK’s poor productivity figures. The Office of Budget Responsibility has downgraded the forecast for productivity growth and GDP which is now expected to grow at 1.5 per cent in 2017 as opposed to two per cent.

regrettably, our productivity performance continues to disappoint, said Hammond, claiming that investment in infrastructure and research will help rectify this.

Hammond initially announced the introduction of the new National Productivity Investment Fund in last year’s Autumn Statement.

The fund was launched to add 23bn in investment from 2017-28 to 2021-22, with spending targeted at areas critical for productivity, including housing, R&D and economic infrastructure.
The spending was originally earmarked for the following:
? 7.2 billion to support the construction of new homes, including spending by Housing Associations
? 4.7 billion to enhance the UK’s position as a world leader in science and innovation
? 2.6 billion to tackle congestion and ensure the UK’s transport networks are fit for the future
? 0.7 billion to support the market to roll out full-fibre connections and future 5G communications.

Responding to the increased productivity fund, Alan Laing, MD UK and Ireland at Sage, said: We welcome the 500m investment into the UK’s technology sector, universities and R&D, but cannot overlook the need to invest in a wider understanding around bias and ethics to ensure that we are fully aware of how these technologies are being developed prior to applying them to our businesses.

there is absolutely no need to fear AI if it is approached with the correct framework in mind, such as the ethics of code Sage produced.

‘sage research recently revealed public and business understanding of AI is optimistic: four out of every five people believe this technology has the potential to make their lives better.


 
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ABOUT THE EXPERT

Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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