UK rural broadband rollout criticised by auditors

 

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The government's rollout of "superfast" broadband to rural areas is about two years behind its original schedule, an official audit has found.

The report said only nine of 44 rural areas would reach targets for high-speed internet by 2015, and four areas could also miss a revised 2017 target.

The National Audit Office also raised concerns that BT would be the only firm likely to win contracts.

It said the company would benefit from £1.2bn of public funds as a result.

"The rural broadband project is moving forward late and without the benefit of strong competition to protect public value," said auditor general Amyas Morse.

"For this we will have to rely on [the Department for Culture Media and Sport's] active use of the controls it has negotiated and strong supervision by [the regulator] Ofcom."

He added the scheme was also expected to cost the taxpayer more than first thought.

Revised targets

In 2011, then Culture Secretary Jeremy Hunt announced that 90% of premises in every local authority area of the UK should have access to internet speeds above 24 megabits per second by May 2015 and a minimum of 2Mbps for others.

Superfast broadband availability

Ofcom map of Superfast broadband availability

To do this he pledged £530m of cash for rural broadband projects which would become available to councils if they also provided funds.

He said this would give the country the "best superfast broadband network in Europe".

However, the scheme was hit by delays, in part because it took longer than expected to get approval from the EU.

The NAO said once officials revised their projections, they found it was going to take 22 months longer than first envisaged for 40 of the areas to reach the goal.

Last week the Treasury revised its target, saying it now wanted 95% of UK properties to have access to superfast broadband by the end of 2017, effectively shifting the goal until after the next general election.

The NAO warned four areas - Highlands and Islands, Cumbria, Norfolk and Suffolk - might still miss this new deadline because the local authorities had failed to request sufficient funds.

A spokesperson for Cumbria County Council told the BBC that since the report was compiled it had signed a contract with BT to deliver superfast broadband to 93% of Cumbrian homes by 2015.

The DCMS said that a pledge to invest an extra £250m meant it would meet the goal.

However, the NAO said that past experience suggested the "government is not strong at taking remedial action to guard against further slippage".

'Opaque data'

The revelations prompted claims that DCMS did not have a "good enough grip" on its programme and that BT had been "cagey" about its costs.

"Opaque data and limited benchmarks for comparison means the department has no idea if BT is being reasonable or adding in big mark ups," said Labour MP Margaret Hodge, who is the chair of Parliament's Public Accounts Committee.

However, a spokesman for the DCMS said its efforts to deliver value-for-money were "strong and robust".

"We agree that effective enforcement of the contracts is important and are working with local authorities to ensure this," he said.

Person on laptop Faster speeds let users stream higher quality video and download documents more quickly

"As the NAO report makes clear, the project's funding model greatly reduced the cost and financial risk to the taxpayer."

BT also defended its record.

"There was strong competition when prices were set at the start of the process and that has ensured counties have benefited from the best possible terms," it said.

"Deploying fibre broadband is an expensive long-term business and so it was no surprise that others dropped out as the going got tough."

Dropouts

Sixteen organisations had originally shown interest in competing for the rural broadband projects.

The NAO noted that "competition was envisaged to be a key value-for-money safeguard".

However, it said suppliers had complained the bidding process was "difficult and complicated" and that the process favoured large companies with secure revenue streams.

By early 2013 only BT and Fujitsu were left in the running, and in March Fujitsu dropped out after it said various factors had made winning the work unattractive.

The audit highlighted that officials only scored BT's financial model eight out of 20 - the minimum pass rate.

It said it remained unclear how much of the firm's bids covered "contingency costs" - a safety-cushion to protect it against unexpected charges.

David Corner, from the National Audit Office, said the delay was due to a high number of negotiations around the country

It also raised concern that BT said 40% of its costs would be on staffing - a figure the NAO said was hard to verify.

The report revealed that there had already been one instance when BT had been caught overcharging for management costs by £3m.

It also pointed out that BT's figures were based on the assumption that only 20% of properties would sign up to superfast broadband within seven years of it being enabled.

The study said this was lower than the figure suggested by both industry experts and international comparisons.

A clawback rule is supposed to ensure that if uptake is higher the firm should share the extra profits with the public.

However, the NAO said government workers would have to scrutinise hundreds of thousands of invoices to make sure this happened, and that some councils have already said they might not have enough resources to do this.

 

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  • rate this
    0

    Comment number 114.

    I live in not-so rural Sth Yorks. BT have run fibre optics within 500m but I cannot have use and receive perhaps 3mb via Sky or 2mb from BT.
    Really they are looking only for profit and are not interested in offering good service!

  • rate this
    +1

    Comment number 113.

    Providing usable broadband is not a big enough money earner for the profiteering brigade and requires significant investment for limited return.
    Whatever promises are made by gov't it either will not happen and excuses will be made or it will happen very slowly.
    Alternatively if the situation changes and significant money can be made watch the money men rush in and the gov't take the credit.

  • rate this
    0

    Comment number 112.

    58.BeesAreTrendy
    "I'm quite happy with my 75meg !"

    75meg!!!

    Count yourself lucky. Here am I, struggling along on 50meg.....

  • rate this
    0

    Comment number 111.

    Mandatory WiFi-equipped dashcams/blackboxes in all motor vehicles. The Space Agencies have been working on deep-space Internet - unreliable, super long packet transit times - for donkey's years. The latency would be bad, but rural communites could download po^h^hdata by the truckload.

  • rate this
    +5

    Comment number 110.

    So, yet another government program that's behind schedule and over budget. A recent report revealed similar government bungling has led to HS2's costs soaring, but only by £10Billion.

    If government had to actually perform, like a private business, without the guaranteed income of our mandatory tax £s, they'd be bankrupt and on the street by now.

    They personify incompetence.

  • rate this
    +1

    Comment number 109.

    BBC your UK map title is misleading - it should read "Superfast broadband availability" - as it can otherwise be interpreted as a speed or performance map. See the the Ofcom link under the map....

  • rate this
    +2

    Comment number 108.

    Delays because of approval which needed to be sought from the EU? Its a shame we cannot comment on the referendum bill which is happening today.

  • rate this
    +1

    Comment number 107.

    Blame Dr Beeching, a lot of rural areas have no access, other than digging the road up, which is extremely costly. Laying fibre along existing railway lines is easy and cost effective.

  • rate this
    +1

    Comment number 106.

    650 MPs in the UK, each about to get a 10k pay rise. Over say, 5 years to roll out SFBB to rural areas - there's 32.5million to help out....

  • rate this
    +16

    Comment number 105.

    Taunton Here. 50 yards across the road from me has fibre optic broadband, my house and area "There are currently NO plans to install fibre optic in your area". Amazing!!!

  • rate this
    0

    Comment number 104.

    We'd settle for a mobile phone network in our village, never mind broadband, or gosh even mains gas! One of the first villages to get the telegraph back at the start of the 1900s and we are still waiting for gas, footpaths and mobile... broad band faster than a snail would be the holy grail!!

  • rate this
    0

    Comment number 103.

    I live out in the wilds. We are planning to use a 4G mobile connection rather than waiting for a fibre optic connection. We should get 4G next January. By the time the high speed broadband project gets to us, there will be better alternatives.

  • rate this
    +1

    Comment number 102.

    Problem is that running mile upon mile of cable plus all the infrastructure required at each end is hardly going to be cost effective for three houses stuck out in the middle of nowhere. Whoever ran that lot would never get it's money back on those installations, that's why there's no competition out there.

  • rate this
    0

    Comment number 101.

    I can't log on !

  • rate this
    +5

    Comment number 100.

    Central Bath here, about 500 meters from the exchange. Fibre is *never* coming here. 12Mbs DSL is the best we will be able to get for the forseeable, which isn't dire, but isn't ideal for a city that's supposedly a "tech hub".

  • rate this
    -1

    Comment number 99.

    The rollout for my area is scheduled to be looked at next year but if BT decide that it's not worth doing, they won't do it. Neither Sky nor Virgin are interested either. Broadband provision shouldn't be left up to the major corporations in this way, it should be the role of Government to ensure that competitive choices are available to everyone, not just those who live in the big cities.

  • rate this
    -1

    Comment number 98.

    The problem seems to be BT. Once it was a nationalised monopoly - which had its downsides in terms of efficiency, but at least Govt could put pressure on to get these sorts of jobs done. Now it is (effectively) a privatised monopoly, which has the same downsides, but none of the advantages. Their priority now is to make money for their shareholders - not to serve the wider public

  • rate this
    +1

    Comment number 97.

    Trouble is politicians from both sides of the house just haven't got a clue about technology and just don't GET how much this could give a massive boost to the whole economy.

    The cost is frankly insignificant compared to the £40bn that HS2 is costing (with only regionalised benefits).

    The private sector won't pick up the cost, this is national infrastructure as much as roads, bridges & rail

  • Comment number 96.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 95.

    66.Mad Max and Satan Dog Paddy
    "In rural areas I wonder why it's not possible to Modulate Broadband along the mains electricity cables ?"


    They've got electricity out there?

    When did that happen?

 

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