UK scale-up policy faces Treasury criticism from former government adviser

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UK scale-up policy faces criticism

Highlights

Depledge criticized the Treasury for failing to differentiate between enterprise and scale-up policy, citing repeated resistance to her advice since 2025.
She reported that 95 per cent of UK government technology contracts go to American prime contractors, despite public commitments to support British businesses.
Depledge defended the Founders' Relief tax, granting a 10 per cent rate on up to 10 million pounds, but called for more pension fund capital for scale-ups.

Procurement reform dispute and scale-up criticism

As reported by the Financial Times, Depledge says one of the biggest obstacles during her time advising government was persuading Treasury officials to take the scale-up agenda seriously. Appointed in 2025 by then chancellor Rachel Reeves, the Resi and Hassle.com founder says officials repeatedly blurred the distinction between enterprise policy and support for scale-up companies, despite her warnings that the difference matters.

Speaking at a ScaleUp Institute conference on Monday, Depledge says she told the chancellor's office 17 times that enterprise is not the same as scale-ups. She adds that the Treasury's handling of the issue shows a lack of understanding of businesses trying to move from start-up phase into larger growth stages.

Depledge also says she was blocked after trying to appoint an external chair to lead a procurement task force. She says the resistance came from a senior permanent secretary and reflected a desire within the Treasury not to lose control of the situation.

She adds that entrepreneurs continue to face major barriers when selling to government, and says 95 per cent of government technology contracts go to American prime contractors. Depledge calls that outcome scandalous at a time when the government says it wants to open more public contracts to smaller businesses and link awards to the creation of British jobs.

Tax incentives and growth agenda under scrutiny

Depledge nevertheless defends the Budget's Founders' Relief, a tax measure she helped design that offers a 10 per cent rate on lifetime gains of up to 10 million pounds. The policy has drawn criticism for being too narrowly aimed at technology start-up founders, with tax specialist Dan Neidle arguing it would suit only a very limited group of entrepreneurs.

She says the relief backs what she describes as one of the UK's strongest levers for economic growth, but argues more urgent action is needed to direct pension fund capital into scale-ups during this parliament. Her comments place financing, procurement access and policy design at the centre of the debate over how the UK turns early-stage companies into larger employers and exporters.

James Murray, financial secretary to the Treasury, says on the sidelines of the conference that he values the challenge Depledge brought to the department while policies were being developed. He also says support for scale-ups and targeted incentives remains part of the government's plan to deliver growth across every postcode.

Earlier, we reported that Chancellor John Healey reaffirmed an IMF-backed deficit-reduction plan ahead of the October 28 Budget.

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