Report Claims UK Superfast Broadband Worth GBP20 for Every GBP1 Spent

The economic benefits of rolling out superfast broadband around the United Kingdom are often complex to understand but a new study commissioned by the government claims that it’s “excellent value for taxpayer money” and will deliver a net return of £20 for every £1 spent by 2024.

At present the Government are spending around £1.2 billion to ensure that 95% of UK people can be within reach of a fixed line superfast broadband (25Mbps+) connection by 2017 (99% by 2018 when you include wireless and mobile broadband). But lately they’ve had a few spots of bad press, not all of which has been justified, and so perhaps that’s one reason why a glowing study has now shown up.

The research (UK Broadband Impact Study – Impact Report) was compiled by analysts SQW (with Cambridge Econometrics) and boldly claims that the investment in superfast broadband will deliver a “major boost to the UK economy“. Indeed it’s by no means the first to make such a suggestion (examples here, here and here).

According to the study, the government’s investment will initially deliver a short-term boost to the UK economy of approximately £1.5 billion (i.e. around £0.5 billion and about 11,000 jobs in 2014 alone). By comparison long-term growth is expected to boost the Gross Value Added (GVA) by £6.3 billion a year and add 20,000 jobs by 2024.

The improvements will come from a multitude of different aspects and rural areas, which have traditionally suffered the poorest connectivity, are likely to see the biggest change. For example, household savings of £45 million per year by 2024 are expected because more people will be able to spend even longer working from home. All of that means less travel, less paper and thus less CO2 etc.

Maria Miller, DCMS Secretary of State, said:

“What this report shows us is that as well as superfast broadband being good for economic growth it will make even more of a positive impact on the way we live, helping us work more productively and get online faster.

Our broadband rollout is one of the best in Europe with almost three quarters of the UK able to access superfast speeds. This is making a real difference to people in communities across the UK from small businesses able to expand, school children being able to log on to do their homework or people being able to work from home. This investment in technology is vital for our future and will help Britain continue to compete in the global race and improve the way we live and work.”

It’s important to note that the Government’s BDUK scheme has so far only had a very minimal impact on the “three quarters of the UK” that can already benefit from superfast broadband speeds. The vast majority of that has been delivered via BT and Virgin Media’s own private investment.

By contrast the BDUK project is more about filling in the gaps between existing coverage (around 70% depending on which stats you prefer to believe) and the target of 95%, which is still predominantly focused on sub-urban areas (i.e. the most rural parts tend to exist in the final 5-10%). But the new study also states that approximately 89% of the benefits from all this fresh investment will be in areas outside London and the South East of England.

Sadly we have not yet been able to examine the report in detail because the links posted on the Government’s website return a 404 “page not found” error. Good job there.