Rural Broadband Roll-Out A 'Raw Deal', Say MPs

Written By Unknown on Kamis, 26 September 2013 | 18.55

The roll-out of superfast broadband to homes in rural towns and villages will leave users paying more than they should to get online, according to a spending watchdog.

The Public Accounts Committee (PAC) said the programme represented a "raw deal" for consumers despite a "generous public subsidy".

MPs claimed the scheme had been mismanaged by the Government and said sole provider BT would end up "owning assets created from £1.2bn of public money".

They said the Department for Culture, Media and Sport (DCMS) should cease spending on the scheme until "proper competition and value for money" could be secured.

A spokesman for BT said it was "disturbed" by the report, claiming it was "simply wrong", and insisted the network it is building would be open to its rivals.

A BT engineer at work BT says it is willing to invest in rural broadband when others are not

"We have been transparent from the start and willing to invest when others have not," he said.

"It is therefore mystifying that we are being criticised for accepting onerous terms in exchange for public subsidy, terms which drove others away.

"The taxpayer is undoubtedly getting value for money."

However, Margaret Hodge, the chairman of the PAC, said all of the 26 contracts awarded by June 2013 had gone to BT and claimed the remaining 18 were "likely to follow suit".

"The DCMS' approach to procurement failed to deliver any meaningful competition to drive down prices and maximise coverage," she said.

Margaret Hodge chairs the Public Accounts Committee PAC chair Margaret Hodge

"Without that competitive tension, it is crucial to have full access to the single supplier's cost information to check that BT's bids are reasonably priced, but the department failed to negotiate that access with the company.

"We now have a situation where local authorities are contributing over £230m more to the programme than forecast in the department's business case, while BT is committing over £200m less."

Concerns about the programme were raised when the Government revised its initial target of 90% of the UK having superfast connections by 2015 to 95% by 2017.

The tender process was also criticised after Fujitsu, which later dropped out, and BT were named as the only approved bidders.

A DCMS spokesman said the PAC's report was "at odds" with the findings of the National Audit Office.

"They found our approach reduced the cost to the taxpayer and reduced risk," he said.

"We put in place a fair commercial process and encouraged different suppliers to bid.

"We are disappointed that the PAC fails to recognise that thousands of rural premises which have never had a decent broadband supply are now getting one, something that is vital for farmers, rural businesses and all those who live outside major cities."


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