2025 Local Digital Index Calls for Biz Rates Relief to Boost UK Full Fibre and 5G

TechUK, which represents many of the UK’s key technology firms, has today drawn on 23 indicators from across the economy, connectivity, and skills to paint a regional and national picture of the tech ecosystem via their 2025 Local Digital Index. But the report also calls on the government to “fast-track” completion of its broadband and mobile projects to tackle slow spots, ideally alongside relief from business rates.

The new index shows that while the UK tech sector continues to outperform most of the economy – now contributing £101bn in Gross Value Added (GVA) and employing 1.7 million people – growth remains uneven. The index highlights some dramatic progress since 2020, such as in terms of the gigabit broadband roll-out, but it also identifies that growth and investment remain “too heavily concentrated” in London, Oxford, and Cambridge.

Overall growth for the digital sector has a forecast of 8.9%, which is above the general UK average. However, the projected rate has decreased slightly since last year’s index (10%). The report also warns that, despite the improvements in digital infrastructure, “too many communities and business parks still face slow or unreliable connectivity“.

In response, techUK has “urged” the UK Government to treat business connectivity as Critical National Infrastructure (CNI) and to start “fast-tracking” the completion of their £5bn Project Gigabit broadband roll-out and the industry-led Shared Rural Network (SRN) for boosting 4G mobile coverage, while expanding coverage measurements to include commercial sites, not just homes (Ofcom’s reports often focus on residential properties).

Matthew Evans, Director of Markets and COO at techUK, said:

“Our Index shows that there is incredible innovation happening across the whole of the UK. However, only some of the regions are reaping the benefits. We must ensure the benefits of innovation reach every region and community. If we invest now in infrastructure, capital, and skills, we can build a digital economy that delivers growth and prosperity everywhere.”

In fairness, both Project Gigabit and the SRN have so far met their initial targets, although Project Gigabit did recently delay its coverage target (99% of UK premises) from 2030 to 2032 (here). Suffice to say, the notion of “fast-tracking” may not be very realistic; much of this is down to the network operators and their ability to deliver in some very challenging areas, although there’s still some scope for the government to remove red tape (planning / road permissions and MDU access etc.).

Overall, the new report makes three key recommendations for action, and the ones for digital infrastructure are particularly interesting.

The Three Priority Areas for Action

• Catalyse investment beyond the Golden Triangle:

Investment remains at the heart of innovation; yet capital, both public and private, is still clustered in the South East.

techUK calls for a deliberate effort to channel investment into high-potential regional ecosystems, ensuring that scale-ups from across the UK can access the finance they need to grow. This includes expanding regional investment funds, aligning Innovate UK and the British Business Bank to support early-stage innovation pipelines, and establishing a Digital Technologies Office for Investment to showcase UK strengths to global investors.

• Accelerate digital infrastructure for business connectivity:

The UK’s digital infrastructure has strengthened significantly since 2020, yet too many communities and business parks still face slow or unreliable connectivity. techUK urges Government to treat business connectivity as critical national infrastructure, fast-tracking the completion of Project Gigabit and the Shared Rural Network while expanding coverage measurement to include commercial sites, not just homes.

 

To incentivise deployment, techUK proposes “targeted business rates relief for next-generation fibre and 5G standalone networks“, alongside support for alternative technologies such as satellite to close the rural gap.

• Align skills supply and demand to drive regional growth:

The UK produces exceptional digital talent, but the Index shows growing disparities between where people train and where they find work. Some regions risk becoming “training grounds” for talent that relocates elsewhere.

 

techUK calls for a more flexible, regionally empowered approach to digital skills. Reforming the Growth and Skills Levy would allow employers to fund short, modular training aligned with emerging technologies such as AI, semiconductors, and cyber security. Local and devolved authorities should also be empowered to reinvest levy underspends into digital inclusion and community-based upskilling.

 

Universities, meanwhile, should act as anchor institutions for digital adoption, helping local SMEs modernise management practices and embed digital tools across supply chains.

Regular readers will know that the Government has recently been facing heavy criticism from network operators, particularly bigger players like BT and Virgin Media (here and here), over their plans to reform business rates; this may actually increase the tax on broadband operators and at a time when they’re trying to invest in the deployment of new networks.

However, so far, there’s been no indication that the government might consider “targeted business rates relief” for fibre and 5G networks. Failing to address this may thus risk causing a slowdown or even abandonment of some deployment plans, at least that’s what Openreach have been warning (here).

The prospects are better for the government to introduce greater support for alternative rural broadband technologies in rural areas, which could perhaps take the form of a new voucher scheme. The new agreement between BT (EE) and Starlink also looks set to target this area next year (here), although we’re still of the view that foreign owned satellite networks should be considered a stop gap solution, with fibre in the ground remaining the ultimate goal.

The difficulty for the government is that they’re extremely strapped for cash, due to the level of debt and related repayments that has accumulated in recent years. The flexibility may not exist to do everything the industry might want.