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Last Wednesday (25/11/2020) the Chancellor
of the Exchequer presented his Spending Review to the House of Commons. It is a
one year settlement for Government departments and for devolved administrations
because of the damage caused by the pandemic and uncertainty as to the nature
of the UK’s exit from Europe.
The Office for Budget Responsibility (OBR)
forecasts that the economy will have contracted by 11.3% this year. That’s the
largest drop for 300 years. The forecasts suggest that the economy will grow by
5.5% next year and by 6.6% the year after. The economy is expected to reach
pre-crisis levels no earlier than the end of 2022.
This blog post will cover the important announcements
that matter for the UK’s video games and interactive entertainment industries.
UK Games Fund
Firstly, we are delighted
that the Government announced an additional £1 million for the UK Games Fund,
rolling it over for a further year.
Over the last five years the UK Games Fund has supported over 100
projects to create brilliant games and has built a community of well over 5,000
UK games developers. This work has created jobs, enhanced skills and promoted
new and diverse teams, all of which has a significant and positive economic
impact.
UK Games
Fund Founder and Chief Executive Paul Durrant said:
"We're
delighted to be able to provide 'business as usual' to our community next year.
Five years in and we're seeing the impacts from our work snowball in terms of
games published, investments and acquisitions. It's great to have Ukie
supporting our community and we'll continue to work with them to build on what
we've done and increase our reach in the future."
Ukie continues to argue for an expansion of the UK Games Fund to put
rocket boosters under our fantastic sector, and we will push hard for this in the
2021 Budget and Spending Review.
Jobs, education and skills
Many people
have unfortunately lost their jobs during the pandemic, despite furlough and
other schemes. Unemployment is expected to rise to a peak of 7.5% (2.6 million
people) by the middle of 2021. To help combat this, the Chancellor announced
nearly £3 billion of funding for the Department for Work and Pensions. This is
to deliver a three-year 'Restart' programme, which will help one million people
who have been unemployed for a year or more find work.
The
Government is also concerned with preparing people for jobs of the future. To
this end the Spending Review includes £291 million for Further Education in
2021-22 and £375 million from the National Skills Fund. This will support
in-demand technical courses, training boot camps, traineeships, and sector-based work academy placements. The Chancellor also announced an additional £2.5
billion of funding for apprenticeships and improving the employer experience.
Ukie will continue to work with the Government, and in particular through the
Creative Industries Council, to ensure that the games industry is able to make
full use of this support.
Digital infrastructure
Buried away
in the National Infrastructure Strategy, which was published alongside the
Spending Review, was a rowing back on the Government’s commitment to have “full
fibre and gigabit capable broadband available for every home and business
across the UK by 2025”. The National Infrastructure Strategy now says that the
Government is aiming for a “minimum of 85% gigabit capable coverage by 2025”.
Despite,
the Spending Review included £1.25 billion to support gigabit rollout and £200
million for digital infrastructure programmes such as the Shared Rural Network
and 5G Testbeds and Trials.
We know how
important high quality digital infrastructure is to the games industry,
especially as the pandemic has accelerated the trend towards working from home.
Ukie will continue to push the Government to be ambitious on the rollout of
full fibre and gigabit capable broadband to boost the productivity of the whole
UK.
Research
and Development
The
Chancellor announced that just under £15 billion has been committed to R&D
spending next year. The games industry is naturally innovative and undertakes
novel and important research and development. Games businesses have been
leaders in the development and deployment of virtual reality, artificial
intelligence and much more beyond. We will continue to work with the industry
to access this pot to accelerate the games industry’s world leading research
and development activity.
Also
announced was a £45 million fund for “digital technologies and data” that will
aim to drive growth while promoting safety and security.
Levelling
Up Fund
The
Spending Review also served as the launch for a £4 billion “Levelling Up Fund”.
This Fund will invest in projects around the UK chosen by local areas and will
be required to have support from the relevant Member of Parliament.
The UK
games industry is uniquely placed to support the Government’s ambitions for the levelling up agenda with over 20
clusters across the whole of the UK – over 55% of game development jobs are
based outside of London and the South East – contributing significantly to local
communities. Ukie will work with interested members to ensure that the value of
games can be boosted via the Levelling Up Fund.
If any members would like to discuss the Spending Review please do
not hestitate to get in contact with Tim or Grace.