The IT industry in the UK is calling on the government to introduce new measures to stimulate job creation for start-ups and encourage skills development.

Ahead of the Chancellor's budget announcement tomorrow, Techworld polled a selection of representatives from the IT industry in the UK. The overwhelming majority said that the government should be doing more to ensure local talent is nurtured so that companies do not resort to outsourcing or using cheap labour from abroad.

“There are a great number of young people, including graduates, that are out of work, and this cannot bode well for the future. There should be a major dividend to companies that invest in talent,” said Jonathan Pheils, transition and quality assurance manager for P&O Ferries.

One IT Consultant from Taunton, who uses the online name of Bottman, told Techworld that the government should stop insisting that more workers need to be brought in from outside of the UK.

“We have plenty of adequately trained people currently not working because they cannot get a job; and yet we regularly hear that ministers are quoting 'studies' that show there is a shortage of people,” he said.

Another theme was the need for apprenticeships. Adel Al-Shehab, Chief Operating Officer of Inframon, (previously director of ICT at West Midlands Police), said that the government needs to invest in apprenticeship schemes to unlock the talent of young people.

This sentiment was echoed by Mark Ridley, IT director at recruitment firm Reed Online, who also said that apprenticeships need to be supported with streamlined grants for regional technology hubs and incubator schemes.

Sara Kelly, executive director of the Coalition For A Digital Economy (Coadec), focused on the need for financial incentives, calling for Capital Gains Relief (CGR) under the Seed Enterprise Investment Scheme (SEIS) to be extended for another year.

“To help stimulate job-creation for startups, we also need to see measures in the budget cutting red tape for companies looking to take on new staff, making it easier for businesses to scale up or scale down quickly as required,” she said.

Robert Marcus, CEO of QuantumWave Capital, an investment bank specialising in M&A for technology start-ups, added that an injection of capital is needed to help trigger technology innovation in addition to corporation taxes for large firms.

“Further investment and a ring-fenced approach to apprenticeship funding will help cement London’s place as one of the most important tech hubs in the world,” said Marcus.

However, Bottman asserted that investment in the 'Silicon Roundabout' area in East London will actually achieve very little, and more needs to be done to encourage IT startups in areas outside of London.

The industry's focus on skills was reinforced by members of the vendor community. Stuart Drew, European Vice President at HCL Technologies, said that the Prime Minister's apparent shift towards welcoming skilled Indian students to the UK is a clear sign that all is not well when it comes to the development of IT skills.

“I'd like to see Mr Osbourne committing to offering 'innovation incentives' in his budget speech in the shape of grants and subsidies to organisations that are able to demonstrate that they are safeguarding the next generation of IT skills,” said Drew.

Gary Calcott, technical product manager at Progress Software, added that many of the nation's small businesses lack the skills they need to drive innovation.

“It's clear that programming language skills need to be on the curriculum and taught in schools if we want to encourage the next generation of developers,” said Calcott.

“The only way for Britain to be a genuine innovation leader in the years to come is if the government can produce and integrate world-class developers throughout the country's small businesses. This in turn will reduce our economic dependency on the banking industry.”

Intellect, the trade association for the UK tech sector, has outlined a three-point plan for profit ahead of the budget, calling on the government to incentivise large technology firms to nurture young businesses, encourage lending, and allocate ring-fenced apprenticeships funding.

The organisation said the Chancellor must take decisive action to tip the scales in favour of growth and support the upsurge of tech in the UK if the country is to avoid a triple dip recession.