More Broadband Connection Voucher Tweaks to Boost Business Uptake

As expected the Government has today moved to boost the low uptake of their Connection Vouchers scheme, which offers grants worth between £200 and £3,000 to help small and medium sized businesses install a superfast broadband (30Mbps+) service in any of 22 cities across the United Kingdom, by making further changes.

The voucher scheme forms a significant part (roughly £100m) of the wider “Super-Connected Cities” initiative, which itself stems from the £150m Urban Broadband Fund (UBF). But uptake remains low, with only around 4% of the fund (1,500 approved applications) being consumed by July 2014 (here), although the latest data states that approved applications have risen to 3,000 (out of around 6,000 total submissions).

But that 3,000 still equates to roughly £7.5m and thus apparently the average value of a voucher is now £2,500. Several attempts to address the problem have already been made, such as by reducing the minimum voucher value from £250 to £200 and making the scheme available to smaller firms, self-employed individuals and start-ups. Most recently some of the 22 cities, such as Bristol, have even expanded the schemes availability to reach outside of the city (here).

Now the Government has decided to give their vouchers a big push via a new £2m advertising campaign to help raise awareness of the scheme and they’re also carrying out an earlier promise to simplify the application process, which should make it easier and faster for SME firms to secure a grant before the March 2015 deadline.

Sajid Javid, Secretary of State for Culture, Media and Sport, said:

“We want to make sure that small businesses have the help and support they need to grow and prosper in our digital age. That is why we are providing these grants to help small businesses meet their challenges.

I urge all eligible small businesses to apply straight away and help boost their businesses with faster broadband.”

Matthew Hancock, Business Minister, added:

“In today’s economy, not being online is simply not an option and nearly every small firm I meet says that a fast, reliable broadband connection is vital for growth. So I urge our small businesses to make the most of this opportunity and apply for broadband vouchers.

Making sure that all our businesses can access the resources they need to grow is grow is an important part of our long-term economic plan, and we are determined to make Britain the best place in the world to start and grow a business.”

In fairness it’s sometimes easy to forget that the demand-led voucher scheme was hastily setup last year after fears of network overbuilding triggered legal challenges by BT and Virgin Media (here), with Europe also expressing competition concerns about putting state aid into urban areas, where the private sector should have less trouble making a case for investment (here).

Meanwhile opponents of the scheme would have rather the money be put towards improving broadband connectivity in more isolated rural areas through the wider Broadband Delivery UK (BDUK) programme. We could still see that happening if the funding isn’t consumed, although equally the Government may simply choose to extend the end-date past March 2015.

UPDATE 9:51am

We’ve just added a comment below from CityFibre.

Mark Collins, CityFibre’s Director of Strategy, told ISPreview.co.uk:

“All the evidence shows that high-speed digital connectivity is essential to the success of businesses in an increasingly digital economy. Around the country businesses are struggling to grow and compete, suffocated by a lack of bandwidth. The Federation of Small Business (FSB) recently found that just 12% of the UK’s small businesses have a fibre broadband connection and 1 per cent (around 45,000 businesses) still use dial up. This is despite 94 per cent of small businesses viewing a reliable Internet connection as critical to their on-going success.

It is with this in mind that we are hugely supportive of the government’s connection voucher scheme as an initiative to accelerate the growth of businesses’ digital capabilities. Ultra-fast connectivity enables our companies to embrace the new generation of cloud services and online tools that provide the functionality and flexibility they need to grow. What is more, in cities where our competitive pure fibre infrastructure exists, businesses can gain even further advantage by accessing a range of affordable gigabit-speed services of 1000Mbps that will catapult them to the front of the pack.

The voucher scheme is a powerful mechanism that addresses an undeniable need for better connectivity from the businesses at the backbone of our economy. As an infrastructure partner of this scheme and with our local internet service provider partners offering game-changing services over our gigabit fibre networks we would urge businesses to take advantage of the voucher funding and upgrade their connectivity today.”