Public Accounts Committee report teases but gives no answers
The Public Accounts Committee (PAC) has published its report on a meeting held in January 2014. The report provides the official summary of the meeting that we covered in our news eight weeks ago, and have also been covering significant progress from the actual projects themselves.
The PAC exists to ensure that value for money is delivered with public money, but aligning this with commercial realities and the complex nature of the real world is never easy. The persistent complaint by the PAC is over the level of mapping information published, but as an outsider from the BDUK process the fragmentation of the UK into 44 projects was bound to lead to 44 different ways of doing things, if we as a nation wanted a consistency then larger projects or a firmer grip by DCMS on the process was needed.
In terms of transparency and value for money the day that the DCMS started the ball rolling on the projects that were not part of the original pilot scheme was the day it all fell apart. Three years ago a £50m pilot programme was announced, but none of these have completed to allow for full inspection and given the pressure of the 2015 date to reach 90% coverage of superfast broadband across the UK it was always unlikely to happen.
Looking forward, one cannot but wonder what potential investors looking at bidding for the next round of projects are thinking, perhaps trying to assess what the costs will be for the paperwork involved in a Government procurement project and the financial impact of criticism by PAC. BT may be evil in wanting to protect information about its commercial model, but we suspect almost every other commercial body that might be interested in a gap funded project would have similar concerns.
Competition has been held up as the gold medal of procurement for some years now, but the BDUK process was meant to be operating in an area where commercial competition had failed, in essence throwing money at something that has already failed tends to discourage firms to try and do better in the first place. So in effect BT has known since around 2008-2009 that it could do the easier bit of its fibre roll-out and rely on a good chunk of funding to go further.
The problem for those living in the final third of the UK, (the majority of which is not rural) is such that many millions care little about political battles and just want online order checkers at the big household name providers to say they can order a faster service. The debates over whether BT is giving value for money will only really be known in 2025 when either the digital economy becomes a 21st century British Leyland or we are home to many new companies who pay UK tax but trade globally and underpin a prosperous United Kingdom.
Until 2025 we can argue over the morals of not rolling out to one cabinet because the costs were seen as higher and changing the plans through to what levels of overlap are predatory or not with existing commercial roll-outs (e.g. Virgin Media) or community led projects.
The funding to take coverage to 95% superfast across the UK (Scotland has a lesser 95% with fibre based coverage target) is likely to go to BT, mainly because of time pressures and the cost of running another complete procurement exercise. The experimental funding for the next 5% cannot all go to BT, the maximum any one commercial operator can win is 1/3rd of the funding, so maybe its third time lucky and an opportunity for more firms to find out why you always charge more if working with a local authority to account for the extra administration costs involved.
A final sound-bite, if in the UK we had wanted to do it right, we would have set-up a national FTTP roll-out scheme with committed funding of £1bn per year for the next 15 years to add to commercial funding and create a brand new infrastructure operator, i.e. rebuild the GPO of a bygone era, but then should they use GPON or point to point fibre?