Shropshire’s Deputy Leader Attacks Critics of Local Broadband Project

The deputy leader of Shropshire County Council in England, Steve Charmley, has taken the unusual step of published an Open Letter in order to “dispel some of the myths perpetrated by detractors” of the local Connecting Shropshire project, which is working with BT to roll-out “fibre broadband” services.

The first £26m contract is currently still on-going and aims to make “fibre broadband” (FTTC/P) connectivity available to 93% of local premises by the end of Spring 2016 (note: 87% will get “superfast” 24Mbps+ speeds), which will benefit around 63,000 premises in total, and a second contract has just been signed that will reach another 4,000 premises.

Never the less the local authority has struggled under the weight of Government mandated budget cuts (austerity) and at the same time they’ve been challenged by the opposing need to find extra funding in order to match with the Broadband Delivery UK commitment of £11,380,000 for the second contract (Superfast Extension Programme).

Sadly the council was not able to find a solution in time and as such only £4,725,209 of the BDUK funding ended up being used for the latest contract, with BT committing another £900,000 for a total value of £5.625m. The resultant deal certainly looks poor next to the original, although the increasingly rural focus was always destined to push up costs and Shropshire has promised to resolve this by arranging a third contract towards the end of 2015.

It’s in this climate that the council’s deputy leader has chosen to publish an Open Letter in defence of the project, which given its tendency to meander through various topics from state aid to current project progress will probably fall into the ‘too long; didn’t read‘ (tl;dr) category for most locals.

But Charmley does admit that the “bid may be perceived as disappointing“, largely because of its failure to address all of the 15,500+ premises that still require help, yet he similarly points out that the county has been “recognised as having the most challenging geography and network topology” (i.e. higher costs to deliver) and claims that this is often not recognised by the schemes detractors. A snippet from the letter can be found below.

Steve Charmley’s Open Letter

We now have a balance of BDUK funds of £6.68m that can be used together with the Marches LEP’s Local Growth Fund allocation of £5.02m. We intend to use this funding towards a further procurement exercise. At the same time we will continue to explore options with our partners BT as part of the process, but not under exclusivity and with no obligations on the Authority.

The unallocated funds provide Shropshire Council with a clear opportunity to reassess the wider market as outlined in the December paper. It is anticipated that the process of ‘soft market’ testing will encourage ‘Procurement competition’ and the use of new technologies which will be essential to providing greater reach to those most impacted by the lack of fibre broadband coverage.

It is important to again refer to the State Aid constraints and the need to meet the obligations outlined above. It is expected that a new umbrella State Aid agreement will be negotiated with the European Commission later this summer which will include similar constraints. This agreement will again be very clear how authorities can spend public money on broadband infrastructure.

Connecting Shropshire has already started having conversations with alternative suppliers and regularly engages with the wider BDUK Programme network to understand what opportunities are available. In particular, we will be engaging directly with those authorities that have undertaken Official Journal of the European Union (OJEU) procurements, which includes Berkshire, Gloucestershire, Swindon and Kent. We already have close working relationships with our neighbour LEP authorities and are already working collectively on utilising European funding streams to support broadband initiatives.

The funding woes are of course by no means unique to Shropshire and we’ve also seen a few other Broadband Delivery UK based local authority projects struggle to find the necessary funding to match with the Government’s commitment.

Indeed in today’s climate it can be easy to forget that the UK is still struggling under a mountain of debt. Back in Q1 2015 UK government debt amounted to £1.56 trillion, or 81.58% of total GDP and the annual cost of paying just the interest on that amounts to around £43bn (roughly 3% of GDP or 8% of UK government tax income).

So no, we haven’t recovered, not even close. On the other hand broadband is still one of the best investments that a council can make in order to spice up the local, as well as national, economy and in that sense we’d hope that Shropshire can overcome their problems enough to see real purpose in pushing beyond today’s dilemma.

Similarly Local Authorities should not become too dependent upon BT for a solution as they too will find it increasingly challenging to push better connectivity out into the remotest of rural areas, which in some cases could result in no bids being made for related contracts. As such it’s good to see Shropshire eyeing up alternatives, although talk and action remain too very different things and Europe has a part to play here too (more flexible state aid rules, perhaps?).

The situation could always be much worse (Greece).