More superfast broadband funding unlocked to improve UK broadband landscape
Santa has arrived a little early over at DCMS but best to get this delivery done before the more exciting run with lots of toys, the gift is the news of a £440m windfall of funding for superfast broadband. This is comprised of money from the clawback mechanism and apparently efficiency savings identified by BT. It must be pointed out that the £440m is not new money, but the cumulative total that includes previous clawback money which started with £129 million announced in July 2015.
"Our Broadband Delivery UK programme is giving families and businesses in hard-to-reach areas the fast and reliable internet connections which are increasingly at the heart of modern life.
Strong take-up and robust value-for-money measures mean £440 million will be available for reinvestment where it matters – putting more connections in the ground.
This will benefit around 600,000 extra premises and is a further sign of our commitment to build a country that works for everyone.Culture Secretary Karen Bradley
The increased clawback has been triggered by take-up for the gap funded roll-out rising to some 1.5 million premises and the table of take-up rates show that it is far from uniform. This lack of uniformity is thought to be largely down to factors such as the timescale for delivery via the various projects, but will also reflect different demographics in how keen people are to upgrade to a superfast broadband service, and as set-up fees continue to increase along with the price premium the decision is not always automatic even when people do know something faster and better is available.
|East of England||34.2%||£18,900,000|
|North East England||29.55%||£3,450,000|
|North West England||29.32%||£15,590,000|
|South East England||35.59%||£18,405,000|
|South West England||29.91%||£8,827,000|
|Yorkshire & Humber||31.12%||£13,559,000|
The gainshare allocation totals £133,807,498 with a UK wide take-up rate of 30.62% and what happens with this and money from efficiency savings is down to the local authority or devolved administration working in conjunction with BT. It is possible for areas that have already set the course for 100% superfast coverage that nothing will change, and thus the money will sit waiting to be paid back at the end of the seven year contract, but we expect the majority of the BDUK projects to make use of the extra money to push coverage further, or change the technology used, for example a business park that was earmarked for VDSL2, might see infill FTTP for the business premises.
So good news, but the devil is in the detail and we will not have that until the New Year and as with previous gainshare news it will probably take some months for projects to make their own individual announcements. So while this announcement is great and shows the Government in a very positive light, the key is how this actually works in practice. One interesting aspect is that the press release talks about 'BT will be releasing £292 million for extra connections with £133m already allocated', which seems to say BT has not released the £292m yet and thus raises the question of when BT will release it. What is interesting is to read our previous clawback announcement a year ago which mentioned the £150m efficiency saving way back then and that every 10% of take-up should deliver £129m of clawback funding.
Prior to this news everyone was relatively hopeful of hitting 96% superfast coverage by 2020, but DCMS is pushing the boat a bit further with the hope that the extra money along with other changes will mean superfast coverage pushes to 97% and thus breaks (or at least means it needs some tweaking) the model that Ofcom announced last week in a good way, as this should mean even less premises will need help to meet the 10 Mbps USO once it finally becomes law in 2020.