Here's what UK tech thinks of the £400m promised for VC startup investment

Lynsey Barber
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A boost for startups came in the Autumn Statement (Source: Getty)

Startups are set for a boost from the chancellor's Autumn Statement, as Philip Hammond announced plans to plough £400m into venture capital.

The funds will come via the British Business Bank and it's expected to unlock as much as £1bn for startups itching to scale up as it will encourage private investment.

Of particular focus will be the fintech, digital and life sciences sectors and the first investments are expected to kick of in mid-2017.

The move was welcomed by the tech industry as a step in the right direction, but some experts believe it does not go far enough.

Read more: Here's exactly what the £2bn boost for UK R&D entails

“This announcement was a timely acknowledgment that our long-term investment culture in the UK, as far as tech start-ups are concerned at least, is lagging behind the likes of the US and China," said KPMG's Tech Growth practice co-head, Patrick Imbach.

Do we think it’s a game-changer? No, we don’t. The reality is £400m is a drop in the ocean when you look at historic levels of investment into the UK start-up community.

He said it was also unlikely that the funds would go far enough to bridge the late-stage funding gap for startups which is often credited as being one of the reasons companies often sell out to larger firms.

However, he also noted that it could go some way to plugging any potential gap in funding from the European Investment Fund.

One of the crucial areas in tech the chancellor failed to address was access to talent and skills.

Read more: Autumn Statement TL;DR? Here's our at-a-glance guide

“The measures introduced by the government today miss half of the picture," said Tech London Advocates founder Russ Shaw.

They will not be a silver bullet, and crucially do not address the tech sector’s number one issue – access to talent. The Prime Minister must take positive steps to safeguard our tech talent pipeline and allow companies to access workers with the right skills.

This requires a more functional immigration policy to attract world class talent, and an investment in digital skills to train up our existing home-grown talent. Financial incentives can only be successful if we have skilled workers that can use them to innovate and create value.”

"Plans to address the UK's digital skills gap were missing," said Tech UK's policy director Charlotte Holloway who welcomed the £400m funding and further measures such as the additional £2bn for R&D.

Similarly, there was a missed opportunity to ensure that the benefits of digital are at the heart of the Government’s devolution ambitions. We will be looking to the Government to reconsider these areas in the next Budget.

The question of talent was also raised in Parliament by MP Stephen Metcalfe who chairs the House of Commons Science and Technology Committee.

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