Network: Gordon proves a real IT boy

Last week's Budget should give a boost to Britain's hi-tech companies

GORDON BROWN'S new 10p income tax rate has dominated the headlines, but last week's Budget was good news for the IT industry too. The Chancellor announced a series of measures that should boost investment in technology- led firms, increase access to IT training and skills, and improve the climate for e-commerce in the UK.

The Government's new Small Business Service will, the Chancellor said, provide advice and assistance to small firms on e-commerce. Plans for wider employee share ownership, and tax breaks for entrepreneurs and for venture capitalists who invest in smaller firms, are also designed with the technology sector in mind. Mr Brown's team was clearly inspired by the US experience, where small start-ups in the computing and technology sectors have gone on to become household names.

The Budget's greatest impact, though, should be on computer skills and the take-up of technology in schools and homes. The Government is proposing to set up a network of a thousand computer learning centres, "one for every community in Britain", according to Mr Brown. The exact details of the scheme have not been announced, but some of the new centres will be in conventional locations, such as schools and libraries. The Government, though, is considering a more adventurous approach, and other centres will be on the high street and in Internet cafes.

The new centres will provide training courses in IT skills, which will attract tax breaks and subsidies via new, individual learning accounts. The centres will also be able to lend computers out to members of the public. Computers and software should be as readily available "as library books in the last century", the Chancellor said. The total cost of the Budget's technology measures comes to pounds 500m; the aim is to equip "the whole of Britain for the information age".

The Government is also expanding its scheme to provide school teachers with laptop computers for use at home. Two years ago, 1,000 teachers were lent machines as part of a trial. Under the Budget proposals, an extra 20,000 teachers will be able to join the scheme.

For IT companies, the shortage of skilled recruits is one of the most serious challenges. The best way to avoid a skills shortage is to increase the use of IT in schools, and to encourage life-long learning, especially in technology, for adults.

"The key to developing these skills lies in ensuring that teachers are comfortable with computers," agrees David Heath, education business unit manager at Compaq.

"Lifelong learning can only be achieved through investment, and these measures will help to ensure that relevant competencies and skills are developed within education."

Potentially even more far-reaching was Gordon Brown's announcement that companies will be able to lend computers to their staff, free of tax. Similar schemes in other European countries have been extremely popular, with the take-up greatly exceeding expectations.

In Sweden, Hewlett-Packard took part in a programme to supply shipwrights and metalworkers with PCs, printers, scanners and access to the Net. In six months, 58,000 mainly blue-collar workers had taken up the offer. HP estimates that computer sales have increased by 40 per cent in Sweden as a result of the tax breaks. "A little help from government can have a dramatic impact," explains Tina Green, UK corporate communications manager at HP.

"When these programmes work they offer something for everyone. Business and government get a skilled workforce, and employees get up-to-date technology as an investment in their career and an opportunity to support their children's education," she says.