Been a big struggle since the recession, but things are very slowly improving.
This country is facing ever increasing cheap competition from abroad with software development as code can be developed and uploaded to a server from anywhere in the world. More and more companies are realizing they can save development costs by doing this.
There are several major global project / developer matching websites, where going rates are $10-20 per hour, with money being safely held in escrow accounts, until the customer accepts the milestone or the completed software. These sites are dominated by Indian, South American and East European developers as they can afford to work for these hourly rates.
In 20 years time I think UK software development will be as common as UK shipyards building merchant vessels. There will still be small niche suppliers like their are for boats, but that's all.
This is also reflected that the UK's global percentage of computer games developed here, has been and is continuing to decline. The main countries benefiting from this are France and Canada due to large tax breaks and new studios (many owned or part owned by the big publishers) in Eastern Europe, South America and some Asian countries.