UK rural broadband rollout criticised by auditors

 

The BBC's Rory Cellan-Jones visits the Cotswolds, which is still waiting

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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 514.

    3rd world countries have what this gang in London tell us is so difficult and delayed. Just cut out the lies, the backhanders and the political career moves, then we will have a broadband worthy of the world stage.

  • rate this
    +1

    Comment number 513.

    I love it every one knocking BT.Nonsense talked by so called technical experts who are clueless about network fibre budgets & probably haven't the basic nous to realise most of their slow network speeds is down to not doing basic PC house keeping. I have just cleaned a PC there were more icons on the desktop than stars in the sky the result was a 40% apparent increase in network speed!

  • rate this
    0

    Comment number 512.

    To think that for the £40+bn projected cost of HS2 we could roll out high speed rural broadband and ultra fast (up to 1GB/s) urban and still have plenty left over is disgusting.

    Where railways spurred growth in the industrial era so to will the internet spur growth in the 21st century and beyond.

    If we can increase HS2's budget £10bn we can find £530m for rural broadband.

  • rate this
    0

    Comment number 511.

    also, anyone complaining about low up speeds, ADSL=== Asynchronous digital subscriber line, as in less up than download.......go for SDSL or similar tech if you want better up

  • rate this
    0

    Comment number 510.

    More of an effort should be made to ensure people in all parts of the country have access to good quality broadband. I'd rather see more investment in technology such as this than high speed trains etc.

    http://www.thewriterteam.co.uk/

  • rate this
    0

    Comment number 509.

    Pessimistically speaking, it would cost £168,000 to roll out a wimax mesh network (think wifi routers on steroids for you non-techies) plus the land to house them (which could be unused council land) plus a tower at 168 sites plus several (more the better) internet connections, a rough guesstimate of a few million, so hey, give me the money, say 1bn and I'll do it??????

  • rate this
    +1

    Comment number 508.

    Same old story. The big mobile/broadband companies haven't got the stomach to invest in the infrastructure but are happy to charge through the nose for it. And you wonder why we're so cynical??

  • rate this
    +1

    Comment number 507.

    All everybody talks about is lack of speed.

    We should be looking at content. Most of the info running down these lines is adverts, spam and junk mail - which some of us block and most others wish they didn't get.

    It annoys me intensely that some web pages still take longer to download than pages did 25 years ago on a 1275 modem - 1,2kbit download gave all the info in text only that 4Mbit can't!

  • rate this
    -1

    Comment number 506.

    Well it is a BT rip off as DCMS civil servant Mike Kiely pointed out to local government (and was sacked for doing so).

    However the NAO is wrong, it is really easy to calculate take-up. You know the number of lines served at each cabinet. Just send an audit command to the network to list the lines with VDSL enabled. Instant take-up figure at the push of a button.

  • rate this
    0

    Comment number 505.

    How cost effective is this?

    I would guess not.

  • rate this
    0

    Comment number 504.

    Katz

    Off topic i guess, but how did you come by signing this arrangement??

    Though if you work from home you can claim the tax back for driving to the office and too customers etc.

    I know many people who have business grade services into their house, garage, summer house, so it can be done. But it'll cost, i guess the best option is to run your test overnight

  • rate this
    0

    Comment number 503.

    There are clearly no incentives for the telecoms companies to do anything out of the ordinary. I live 50 yards from the Olympic Broadcast Centre in East London. I've read of other people on here complaining about 8mbs - we generally get 4mbs and that seems to be the average for the whole area. If this is Olympic London with its brand new infrastructure, what hope does the rest of the country have?

  • rate this
    +1

    Comment number 502.

    Giving over £1 Billion to a company that exercises such a monopoly over the provision of such services is an appalling misuse of public funds . They have the worst customer service record and are simply "unaccountable" . I wouldn't accept any promise from them to do anything other than continue to provide an archaic and inept service whist being able to charge a premium for it .

  • rate this
    0

    Comment number 501.

    I live 5 miles from the centre of London in a three year old development and still can not any broadband faster than 8 Mbs. BT's website provides no indication of when superfast broadband will be available. If BT or Virgin can't wire up new flats in large cities with superfast broadband than what hope is there for countryside.

  • rate this
    +1

    Comment number 500.

    I do most of my work from home. Typically I need to upload files of a gig or larger and this usually takes anywhere from 5 - 20 hours. When I visit my girlfriend, I can upload the same amount in 30 - 60 minutes. The disparity is shocking. Friends of mine on the continentget up/down speeds of 100/50. I'm sat here with 6/0.65. Absolute joke.

  • rate this
    0

    Comment number 499.

    497.TRUST ME IM A TORY MP
    Check out the "REPORT THIS COMMENT" function on any post other than your own...

    You too can push something under the noses of the Mods.

    Unless it's a pre-moderated thread, that's how a post gets Mod-ed!

    I guess the Mods then have to make a decision, but they must have rules too...

  • rate this
    0

    Comment number 498.

    494.Trytastic
    No point re HR: already done that: they wouldn't even stump up £11 for an extension cable! They explicitly exclude additional costs in the agreement.
    Not insignificant in comb with increased gas, elec etc & it's not easy to upgrade home service to a bus service unless you're actually a bus - have checked!
    I guess my best bet is to drop off connection voluntarily then reconnect!

  • Comment number 497.

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

  • rate this
    0

    Comment number 496.

    we used to be with bt who promised superfast brodband,fat chance,on a good day,4mps,on a bad day,which it was most days,less than 1mps,so we switched to virgin media,result, a cheaper deal,blisteringly fast broadband and a back up service second to none,a recent fault was repaired in less than 3 hours after it was reported,cant get better than that.

  • rate this
    0

    Comment number 495.

    if you want to see super fast , where ALL get 40 Mbps, visit the staffordshire villages of Tatenhill and Rangemore . of course if you ask the councils, BDUK etc. They will tell you they don't have this service and are pushing to spend tax pounds on a partial BT solution. The current service didn't cost anything to the Local authorities at all either.

 

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