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Grant Shapps calls for £258m windfall to be spent on fast broadband
Tuesday 10 May 2016 09:52:27 by Andrew Ferguson

We know that Internet companies are more agile, but has it really taken The Telegraph and Grant Shapps ten months to notice that the first round of the BDUK clawback mechanism was announced back in July 2015. This latest item in the Better Broadband Campaign by The Telegraph while aiming to help rural areas may actually cause more problems, since it is headlining with a figure of £258m and also makes the mistake in saying the money has been returned to the Treasury.

"I fully support the Telegraph's campaign for Better Broadband."

This spare £258 million returned to the Treasury by BT could make all the difference in connecting up the most hard to reach areas.

Ensuring access to high speed broadband is one of the best ways in a modern economy for a Government to helps boost the prospects of small businesses and entrepreneurs.

It also means citizens in the countryside have the same access as everybody else to public services."

Jon Trickett MP, Shadow Communities secretary

The clawback announcements led to a wave of further announcements (e.g. Lincolnshire and Worcestershire) by councils announcing extra coverage on top of their phase 2 projects and this is the problem with the announcement, i.e. the money has already been allocated in many cases and the sum of £258m which is double the actual £129m announced is a mystery - we presume an assumption has been made that the money will be precisely match funded by the BT Group again.

Update 11th May After someone in the comments mentioned that the take-up assumptions had changed we delved back through the financials and it seems the take-up assumptions have shifted again, with the presumption being a 33% take-up, rather than the 30% announced in July 2015. This means that BT Group has 'deferred £229m of grant income', which in non accountant language we believe means that the claw back mechanism has some £229m of funding to spend, but it is still not being returned to the treasury as some assert.

Its not that we don't support the idea of further investment in bringing faster broadband to more homes and businesses in the UK, its the constant trickle of half or plain incorrect facts trotted out. The danger for campaigns that continue to make mistakes like this is the hopes of the public are falsely raised e.g. some will recall the extra £129m from 2015 and incorrectly add this latest figure of £258m and wonder why with something like £400m to spend a lot more is not being done. As importantly the decision makers will ignore almost everything said as they get used to figures always been wrong.


Posted by TheEulerID 12 months ago
Why is it that MPs (including a Shadow Secretary) and the media so clueless as to how the BDUK scheme actually works. The funds are effectively held in escrow for the BDUK local projects to reinvest and, in any event, it wasn't all Treasury Money in the first place (and it was actually "top-sliced" money from the TV licence, much of it left over after being earmarked to subsidise householders in the digital TV switchover).
Posted by TheEulerID 12 months ago
nb. to be clear, it was the Treasury money only that was "top-sliced". The match funding was local authority and that was never Treasury in the first place.
Posted by AndrueC 12 months ago
Why is it that MPs (including a Shadow Secretary) and the media so clueless?

Fixed that for you. No need to go into specifics :)
Posted by themanstan 12 months ago
Because politicians love spending the same money twice
Posted by _Mike_B_ 12 months ago
Everything Schapps seems to be publishing recently seems to have errors
Posted by WWWombat 12 months ago
The differing sums happen because they are accumulating.

The £129m announced in July was actually £100m in that quarter, added to the "deferred grant" of £29m in the quarter before; it was the change of target to 30% that was the really new part in July.

In October, another £28m was added (to make £157m); in January, another £22m was added (to make £179m).

May's announcement of increasing the take-up target again to 33% meant the quarterly deferred grant jumped to £79, and the total jumped to £258m.
Posted by WWWombat 12 months ago
Obviously it was July's target of 30% and the £129m that gained the most publicity - and was surrounded by lots of announcements about funding being available to individual LA's.

I haven't seen anything telling us how the extra accumulating funds are going to be dealt with, from any LA's at all.

I assume the extra public consultations going on, to authorise spending the "July fund", will apply equally to any extra funds that turn up in the meantime.
Posted by andrew (Favicon staff member) 12 months ago
A longer look at financials suggests 'The total amount of grants recognised is lower than last year as we have deferred £229m of grant income due to strong levels of take-up'.

Missed that snippet with all the FTTP news, and next day being back to BT is evil coverage.
Posted by themanstan 12 months ago
What i think has been forgotten is that on top of this deferred grant (returned funds) is projected underspend... NAO predicted that there will be a substantial amount of cash that would not be invoiced through economies of scale and that this will be available to for the pot too, but this will only be known when BT submits it's last invoice for phase 1 work.
Is that worth prodding BDUK and BT about Andrew? Might allow you to get an idea when phase 1 is truly complete on ground and financially.
Posted by WWWombat 12 months ago
Yes - the total grant deferred in the 2015-16 financial year became £229m, added to the £29m that happened in the final quarter of the 2014-16 year.

I think the extra 3% "assumption" works in the favour of all projects, while @themanstan's reminder of the underspend will add a variable chunk to projects too.

North Yorkshire must have finished their phase 1 "true-up" reconciliation by now... Got to be worth a prod.
Posted by andrew (Favicon staff member) 12 months ago
Too busy tracking the changes and other project work going on to do lots of leg work chasing stuff like this.
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