Treasury reconsiders IT skills incentives

The Treasury could replace the Home Computing Initiative - a scheme to give employees access to cheap computers - after a number of business groups objected to government plans to scrap the scheme.

In his budget speech last month, Chancellor of the Exchequer Gordon Brown axed the scheme, which gave tax breaks for businesses that provided employees with PCs.

But following criticism from business leaders, the Treasury said it is looking at alternative ways of boosting IT skills for employees.

A Treasury spokesman told silicon.com the scheme had been abused: "There's been a lot of controversy over the Home Computing Initiative. It had to go. But the government still has initiatives for raising education and skills in IT.

"We are looking at potential vehicles to do that. There's nothing concrete yet. We are putting together the best proposals to move forward."

The Chancellor initially said the abolition of the HCI will recoup the Treasury about £150m by 2009.

Under the HCI, employees could take out tax-free loans from their companies to buy home computers. More than 500,000 households took part in the scheme.

General Secretary of the TUC Brendan Barber has welcomed signals to replace the scheme.

In a statement, he said, "While we think stories of its abuse have been exaggerated, we would have no problem with a new scheme that targeted assistance more effectively.

"Tighter rules on what the money could be used for, stopping higher rate tax payers and reducing the amount that can be spent on hardware to ensure that the help goes towards reasonable standard entry level PCs, while keeping an element for training and support on top should all be explored."

Sir Digby-Jones, director-general of the Confederation of British Industry, also criticised the Treasury, stating it would undermine attempts to boost computer literacy.

Last week he said: "This flies in the face of everything the country is trying to achieve on skills. Seventy-five per cent of people affected by this change are lower rate tax payers.

"They will want to know why the government has deprived them, and their families, of this opportunity and companies will want to know why they have only been given two weeks to work out what to do with their schemes. Computer literacy has to be a given in a globally competitive economy."