Super-fast broadband rollout is super-slow, says audit office

The National Audit Office says the chancellor's favourite project - super-fast broadband rollout - isn't going as planned. And BT's been behaving badly...

by Emma Haslett
Last Updated: 26 Sep 2013
As surely as the sun rises in the east, as surely as night follows day, so the chancellor will make an announcement about super-fast broadband during any review or speech to do with public spending. Budget? Super-fast broadband. Autumn statement? Super-fast broadband. Spending review? You guessed it…

It’s an easy win for the government, really – whack a couple of million in the direction of broadband infrastructure providers and let them do the rest.

Except, apparently they’re not: a new review of government-funded high speed internet projects by the National Audit Office has found that only nine of the 44 rural areas the government has identified as in need of the service will meet their targets by 2015. Four areas (Highlands and Islands, Cumbria, Norfolk and Suffolk) will even miss a revised target of 2017.

The funding for this particular super-fast broadband project stems from a 2011 announcement by then-culture secretary Jeremy Hunt, who wanted to create the ‘best super-fast broadband network in Europe’ by providing £530m (which has now risen to £1.2bn) for local councils on the condition that they also stumped up cash. The idea was that 90% of the homes and businesses in the UK should have access to internet speeds above 24MB per second by May 2015.

Alas, the EU didn’t share Hunt’s ambitions, taking more time over approving the scheme than had been anticipated. The result was that, in George Osborne’s spending review last week, he changed the goalposts, saying he now wants 95% of properties to have access to super-fast broadband by 2017. Which is, eagle-eyed readers will note, way after the next general election.

Competition is also a problem. Originally, 16 organisations showed interest in the project, but the NAO reckons the only beneficiary of the £1.2bn the government has provided to build the infrastructure will be BT.

That’s because the bidding process was ‘difficult and complicated’, and favoured large companies. By early this year, of the original 16 only BT and Fujitsu were left in the running. In March, Fujitsu dropped out, saying that winning the project had become ‘unattractive’.

For its part, BT hasn’t exactly played nice: the company has apparently said 40% of its costs would be on staffing, which the NAO says is ‘hard to verify’. It also pointed out that BT has been caught overcharging for management costs to the tune of £3m. But what’s £3m between friends, eh?

The NAO adds that BT’s figures are based on the assumption that only 20% of properties will sign up to super-fast broadband within seven years of it being provided. There’s a ‘clawback’ clause in its contract, which says the government gets some of its money back if the take-up rate is any higher than that – but the NAO reckons government workers would have to spend hours poring over customers’ invoices to see whether this happened. So it isn’t really practical (although the government did sign up to it – so it’s not really fair to blame BT for that bit).

What happens now? As with all things NAO, things will move at a glacial pace – but what it does mean is more super-fast broadband announcements in parliament. We can hardly wait…

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