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Half of UK tech firms fear missing out on Covid-19 state support

Written by Mon 6 Apr 2020

Responding to a new industry survey, many also fear border blockages might disrupt supply chains

UK tech trade body techUK has released a second Covid-19 survey investigating the effects of the pandemic on the nation’s technology sector, building on an initial survey published last month that indicated the sector might be insulated from much of the impact.

Over 100 technology organisations responded to the updated urvey – half of them small businesses with less than 50 employees. techUK counts 850 companies as members that collectively employ almost half of UK tech sector employees.

Overall, the sector still seems cautiously optimistic that the most extreme economic effects of the outbreak can be avoided, with only 6 percent fearing a halt to trading in the short-term. Longer term, businesses are more uncertain, with 30 percent concerned about their ability to trade if restrictions are extended.

Supply chain disruption is second behind lost income and productivity on organisations’ list of Covid-19-related fears, with 40 percent noting it as a concern in the short and long-term. techUK members anticipate tempering in the movement of goods and people as the number of officials at borders and ports declines.

“It will be vital to ensure that essential goods, such as telecoms and IT equipment continue to be able to move quickly through the border during this period to maintain digital resilience,” wrote Vinous Ali, associate director for policy, techUK.

Financial uncertainty

Last month, UK Chancellor Rishi Sunak launched an unprecedented package of financial support to help UK businesses weather the outbreak, including the Coronavirus Job Retention Scheme, which offers grants of up to 80 percent of an employee’s wage for all employment costs – up to a cap of £2,500 per month.

While 70 percent of the nation’s tech sector has reached out to this lifeline, half of respondents fear they are ineligible for Government financial support, such as loans for the self-employed earning more than the £50,000 threshold. techUK said several of its members — mostly SMEs — were also having trouble with liquidity and access to finance and called on the Government to take action.

“The UK’s tech sector has long been a bright star in the UK economy, growing at six times the rate of the rest of the economy, accounting for 7.7% of UK GVA,” said Ali. “It will be vital to the UK’s recovery as a whole that the sector is supported through this period of disruption and uncertainty.”

techUK is also launching a new national campaign to explore how technology and innovation in UK cities and regions can help people and businesses respond to the crisis and contribute towards the economic recovery of the UK.

The Building The Future We Need campaign will invite UK individuals, businesses, community leaders and policymakers to discuss the actions that can drive recovery, contribute to long-term prosperity and guarantee digital infrastructure resilience for “decades to come”.

In recent weeks, techUK has been working hard to clarify the UK tech sector’s rights and responsibilities during this turbulent period. The trade body successfully lobbied the UK Government to ensure data centre workers were recognised as critical workers and was instrumental in the creation of a dedicated team to support the data centre sector throughout the outbreak.

Written by Mon 6 Apr 2020

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