N.Ireland Broadband Project – How to Spend EUR1.3m on Kit Worth 30k

A new report from Northern Ireland’s Public Accounts Committee has blasted the EU funded Bytel project after it “grossly mishandled” public funding and spent £920k on unused equipment that should have cost just £21.3k+. The 2004 scheme aimed to provide “high-speed broadband” between Belfast, Craigavon, Armagh, Dundalk and Dublin

The cross-border project required effective co-operation between the departments in Northern Ireland and the Republic, yet the report identifies “serious failings” in the handling of the project and points to various examples of “mismanagement, poor communication and inadequate responses to warnings“.

In the end a review of the project concluded that 97% of the €4.3 million grant paid to Bytel was “irregular” and the project was then withdrawn from the EU Interreg programme. The withdrawal of the project from this programme meant that DETI had to fund €2m from its own budget and that a further €2m of available EU funding was lost to the Northern Ireland block.

Some of those irregularities mentioned above involved Bytel’s purchase of €1.3m worth of broadband related hardware from one of its “sister companies“, although the PAC found that this kit (Nortel racks) was “obsolete“, “worth only €30,000” and it was never even used in the project! Apparently the incident only came to light after a whistle-blower raised the alarm.

The Report also found that over €2m of grant was paid for the final claim based on a single-page statement from Bytel that contained no substantive information to justify the payment. In the Committee’s view, this claim had “no validity whatsoever“.

Michaela Boyle MLA, PAC Chairman, said:

“Instead of properly examining grant claims to ensure they were appropriate and monies used properly, [the Department of Enterprise, Trade and Investment] were more concerned with internal pressures to meet grant expenditure targets. The Committee has concluded that this was a fundamental failure on the part of DETI to meet its responsibilities.

The appalling mismanagement of this project led to it delivering very poor value for money. Because of the financial irregularities, EU funding was withdrawn. Not only was DETI required to fund €2m from its own budget but also €2m of available EU funding was lost from the Government budget. The Committee finds it very hard to believe that no one within the Department has faced any disciplinary action for the many serious shortcomings in this project.

This is not the first time that this Committee has found poor management has cost the Government vast sums of money. While we have been assured that management systems have been improved, we cannot afford, in this financial climate, to lose funding in this way.”

So for lessons in how not to conduct a publicly funded broadband project.. go here. Mind you the UK has a few other examples of similar screw-ups, not least with the huge fiasco that was South Yorkshire’s failed Digital Region project (here).