Virgin Media calls on Chancellor to re-direct Super Connected funding

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.

Dear Chancellor

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 [1] and 58,000 extra jobs by 2017[2], 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 Media

Copy 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.