£150m declared as underspend by BDUK process
Deciphering fact from well meaning myths and plain old untruths is a big part of any Government contract and the media coverage surrounding it, and this applies even more so to the gain share money coming back out of the current BDUK projects and also the latest announcement of £150m of underspend being available from the processes central funding.
The £150m underspend was announced by Chris Townsend CEO of BDUK while talking at the Connected Britain conference and is in addition to the £258m that has been released via the gain share (claw back) mechanism so far. None of this is new money but rather the £150m is the result of BT producing smaller invoices and so was never in the BT bank account.
Some of the gain share has already been accounted for by the wave of announcements on extension work since summer 2015. How the £150m will be spent is a big unknown and it may result in the paths between Westminster and Local Authorities diverging with some keen to extend existing contracts where possible and others wanting totally new procurement and a focus on non BT based solutions. Another complication is that some councils may be keen to see if the money can be unlocked and removed from any broadband investment to assist in balancing council budgets elsewhere, the 7 year nature of the BDUK contracts may interfere with this desire though.
Hopefully the BDUK programme is not the first Government intervention project where money is being underspent but it does seem a very rare thing and for all the faults it should be applauded for delivering what it has and is it fair to say it is under budget?
The question of whether the BDUK project was a waste of time and resources is a common one and at the simplest level what the project has done is force the hand of BT to deploy faster broadband to a much larger area of the UK than would otherwise have happened by now. Crucially for those who feel BT is too dominant by concentrating their engineering teams on the BDUK roll-out for a couple of years this gave competitors an opportunity to build their own networks in the most commercial areas, alas apart from the rapid growth of Hyperoptic who are the second largest FTTH/FTTB UK operator, CityFibre while generating lots of positive Gigabit press and share pricing has yet to make an impact outside the metro network and business sector. With the new Openreach CEO (and changes started by previous incumbents) there is more of an ultrafast focus and thus this easy period looks to be ending, particularly given that Virgin Media Project Lightning is starting to deliver in volume too.
Back to the £150m its too early to say how it will be spent with and what it will deliver technology wise, but it makes the likelihood of the UK hitting 97% superfast broadband coverage more certain.