Sunak's defunct SaaS scheme spent seven percent of budget designed to help 100,000 SMEs

A local software subsidy scheme launched by UK PM Rishi Sunak, designed to help struggling small businesses following the pandemic, has spent less than seven percent of its £300 million budget.

After last week's Spring Budget, officials from the Department for Business and Trade said initial analysis of the Help to Grow: Digital scheme, launched in 2021, estimated total spend to be £31.4 million.

However, further detailed work revealed the actual spending for the three financial years of the SaaS credits program (2021/22 to 2023/24) was actually due to be nearer to £20 million, the Department told us.

Help to Grow: Digital was launched by Sunak in spring 2021, while he was serving as the UK's chief finance minister, in a move designed to help boost business growth.

At the time, Sunak said: "With the pandemic, many businesses have moved online. This has been a challenge, but we want to turn it into an opportunity. We're going to help small businesses develop digital skills by giving them free expert training and a 50 percent discount on new productivity-enhancing software worth up to £5,000 each," Sunak told the House of Commons.

The government said at the time that UK had relatively low adoption of digital technologies and software compared to international competitors, while UK SMEs are less likely to use formal management practices than SMEs in peer countries.

In 2021, the government said 100,000 businesses would be eligible for up to £5,000 software discounts each, and the figures in the 2021 budget [PDF] indicated that Help to Grow: digital was forecast to spend £50 million in 2021/22, £115 million in 2022/23 and £130 million in 2023/24 – a total of £295 million.

In the 2022 budget, the UK government reaffirmed its commitment to the plan, but later that year it announced the scheme's early closure. In December 2022, it said businesses had less than two months to apply for the scheme, and that discounts for eligible software should be redeemed within 30 days from issue date.

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At that time, a government statement declared: "Despite a marketing campaign, expanded eligibility of the scheme, and positive feedback from users of the scheme, it did not have the takeup expected."

It admitted that fewer than 1,000 of the 100,000 available vouchers had been redeemed by SMEs.

Sunak has had a difficult history marrying technology vision with reality. Last year, he tried to rebrand the UK as the Unicorn Kingdom in an effort to attract AI investment in the nation state. Also last year, he took on the role of interviewer in a sycophantic love-in with Tesla and Twitter/X CEO Elon Musk. The prime minister – who if opinion polls are anything to go by only has months left in office – has also launched a plan make the UK a "science and technology superpower by 2030."

According to a review [PDF] of the Help to Grow scheme, inflexibility was one of the reasons behind its shortfall.

While vouchers were deemed very effective in getting SMEs to apply to the scheme and redeem their value, some found the range of software insufficient and the scheme itself inflexible in how the voucher could be used, according to a report from RSM UK Consulting, commissioned by Department for Business, Energy & Industrial Strategy (BEIS), which was running the scheme. ®