Virgin Media has written to the Chancellor George Osborne ahead of the budget to call on him to re-purpose the money allocated to the 15 cities that is meant to deliver ubiquitous wireless broadband coverage and provide ultra fast connectivity. The purpose being that Virgin Media believes that a good proportion of the money would be better invested in improving the digital skills of small businesses.
As the Government prepares for the 2013 Budget, Virgin Media sees a huge opportunity for you to boost efforts to drive economic growth through the expansion of digital skills across UK businesses.
As you are acutely aware, driving growth amongst SMEs is critical to the future success of the UK economy, and increasing uptake of digital technologies amongst those businesses is central to that goal. The economic value to be derived from a more digitally mature UK small business sector is estimated at £18.8 billion  and 58,000 extra jobs by 2017, with the most digitally mature three times more likely to have seen growth than those who operate entirely offline.
Yet the potential benefits offered by digital technologies are not currently being realised by UK businesses. Only two-thirds have a website and a third sell goods and services online. Both the Government’s own ‘Digital Champion’ and e-skills delivery body identify the central barrier to small businesses realising those benefits as a lack of practical, digital skills and shortage of resources to undertake digital training.
Seizing this opportunity to drive the UK’s economic recovery will therefore require action from Government to support small businesses to better understand and utilise the benefits of digital. Specifically, this means:
- Ensuring a minimum of 50% of the £150m Urban Broadband Fund is allocated to Government efforts to boost the training and digital capability of SMEs, including through existing programmes such as Web-Fuelled Businesses.
- Enhancing the role of the Minister for Broadband by giving the post an explicit remit to promote economic growth, and oversee cross-departmental work on digital capability as recommended by Policy Exchange.
These are measures that will strengthen the UK’s economic capabilities and can be taken without further expenditure. As you prepare your Budget, we therefore urge you to seize the opportunity to provide a much needed boost to the UK economy and the growth prospects of SMEs across the nation.Yours sincerely,
Neil Berkett, CEO, Virgin MediaCopy of letter to Chancellor ahead of Budget
It is very easy when immersed in the tech industry on a day to day basis to forget how complicated things can seem to those whose core business is not centered around the Internet. Digital Skills does not neccessarily mean that every business will end up with someone trained to write their company website, but to at least have the knowledge to understand the benefits an online presence can bring and also the pitfalls and how to interact with customers online.
The Government response to this letter may well be that the projects will cover some of this, but there is something perverse about spending money on digital skills in just 15 cities, when the reality is that broadband and the improvements from the BDUK projects and the numerous independent projects mean that an office in a converted cow shed can just as easily do business online as one in a swanky nice building in East London given a reasonable broadband connection.
We are also not sure that the Urban fund will deliver what the Government thinks it will, ultra fast connections are available in all the 15 cities already, admittedly the price may not be too SME friendly at this time, but by balancing the price of office space versus connectivity something reasonable can often be found (e.g. fast FTTC or FTTP via Openreach, or a cable connection from Virgin Media business arm or one of the other smaller providers).
If the Urban broadband fund continues along the path it is following, we are expecting that the Openreach fibre on demand product will be a big beneficiary, with vouchers available as part of the funding, not unlike the Broadband Support Scheme in Wales. There is a real risk if it is just a voucher type scheme that it will be as popular as the £5,000 electric car grant, where those benefiting tend to be the ones who could probably have afforded the electric car already rather than kick start a surge in the digital economy.