SCCM Current Branch (1702).
Automatic Deployment Rule was running without error but not doing anything. Downloading updates manually was working so not a problem with Internet connection etc.
The share/folder on the SCCM Site Server where the software updates were meant to download to (the Package Source folder) needed a tweak to the permissions.
Add the server SYSTEM account to the permissions for the folder and the share with the appropriate rights to be able to write to both.