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Oxfordshire – £4.2m Savings from BDUK and BT Fibre Broadband Rollout

Friday, June 24th, 2016 (8:23 am) - Score 663

The local Better Broadband for Oxfordshire project, which has already helped to make superfast broadband (24Mbps+) available to 90% of the county and is now working towards the next 95% target by the end of 2017, confirms that £4.2m of public funding will be reinvested thanks to savings.

So far the original Phase One contract with BT, which has been busy expanding their FTTC/P based “fibre broadband” network into areas that might have otherwise been left to wait a very long time for any improvement, has managed to benefit around 80,000 premises in Oxfordshire and 64,500 of those are able to order a “superfast” (24Mbps+) service if they want.

The first contract had a total value of £25 million (£10m from Oxfordshire Council, £4m from Broadband Delivery UK and £11m from BT) and today’s update confirms that high take-up of the service (26.1% in the intervention area for Q1 2016) will result in £2.55m being returned by BT through clawback and a further £4.2m will also come back via savings (total £6.75m).

Sadly we’re not told precisely what those “savings” represent, although BT did deploy less of their more expensive FTTP solution in BDUK Phase 1 than some had predicted and in other cases it may simply cost less to upgrade an area than forecast. All of this is in keeping with BDUK’s recent confirmation that clawback and savings worth a total of £408m across the UK would be used on further expanding coverage (here).

Nick Carter, County Cabinet Member, said:

“This will enable fibre broadband access for even more households and businesses, including a number of the county’s smallest communities. When considered against the County Council’s initial £10m investment and BDUK’s £4m, this shows a terrific return and is evidence of the successful collaboration with our co-funding partner BT.

We’re currently evaluating feedback from the public consultation we ran in the Spring and will use the results to help us plan how best to invest the funds that are available.”

Steve Henderson, BT’s Regional Director for Broadband, said:

“More than 270,000 premises across Oxfordshire are now able to access faster fibre broadband as a result of BT’s own investment and the Better Broadband for Oxfordshire roll-out.”

It’s worth pointing out that a couple of additional extension contracts have already been signed and related deployments are now under-way. The first of those, which is worth £5.1m (£1.2m from BT, £1.95m from BDUK and the rest from local councils), was signed in February 2015 and aims to expand “fibre broadband” services to an additional 6,500 properties (here).

After that the a third £5.58m extension contract is being supported by £2 million from the Oxfordshire Local Enterprise Partnership (LEP), £120,000 from the South East Midlands LEP and Cherwell District Council, £168,000 from Oxford City Council, £2.2 million from BDUK and £1.1 million from BT. Some 4,600 properties will benefit from that one.

As such the £6.75m of funding (reinvestment) being highlighted today will instead be put towards future contracts that push beyond the current 95% coverage target (BDUK has hinted of a 97% UK coverage aspiration), as opposed to the ones that have already been agreed. The local authority is currently drawing up a plan, which should be announced in the not too distant future.

We should perhaps point out that the future roll-out in West Oxfordshire involves a completely separate project via the Cotswolds Broadband scheme (details), which will expand superfast broadband services to another 6,000 premises by May 2017.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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16 Responses
  1. Avatar Patrick Cosgrove

    Does this mean that it will automatically be spent with BT?

    • Avatar NGA for all

      Patrick, (my opinion) the underspend belongs to OCC, that share of clawback from £129m – (not £258M)is likely to be tied to BT unless they wait for a review date.

      Missing is any discussion on BT Capital Contribution.

      Will OCC /BT comeback and do FTTP clusters beyond the cabinets? There is danger that Mission accomplished is declared, the money goes back and so an opportunity is missed to do FTTP clusters in rural.

    • Avatar Steve Jones

      Could you please stop this endless refrain about the (according to you) missing BT capital contribution? Firstly, the terms under which BT is contracted in each BDUK contract set out what is paid to BT on completion of milestones and submission of evidenced invoices. If it turns out that the contracted target is reached with an underspend, then both the BDUK project and BT will have made savings. Note that if it had worked the other way, BT would have been contractually obliged to make up the difference from its own resources.
      Of course, it to is then open to the BDUK local project to reinvest those savings should it wish.
      Secondly, the clawback or “gainshare” process means that both BT and the local BDUK get to share in the financial benefits in proportion to their share of the initial investment. All this means there is simply no room for any contracted BT capital investment to have gone missing. Whatever headline figures people may have picked up via various news items are of no relevance to how the projects work or are funded. The only thing that matters is the contractual process, and unless a fraud had been perpetuated, there is no room for missing capital investments.

    • Avatar Gadget

      @NGA I like to understand why you think BT’s capital contribution has not been verified by the contract appointed auditors, and if it has been audited by them and nothing found where the professionals have got it wrong?

    • Avatar TheFacts

      @NGA – either do your court case or get a job with BDUK to find out the detail…

    • Avatar FibreFred

      He used to have a job with them didn’t he?

      Not sure why he doesn’t now

    • Avatar NGA for all

      @Steve, If in the case of Oxford like many others, BT capital contribution was transparent then the sums in the investment funds would be larger than the ‘savings’ being announced.
      BT contribution to Oxford was to be £11m. For a programme of some 450 cabinets to cover 64,500 cabinets without much fttp in-fill then you would expect to see a larger investment fund with the underspends and the BT capital contribution due at the ‘true up’.
      For those excluded from the programme this is of interest and clarity should be provided. If it the sums feature in BT’s PR then we should seek clarity on the matter. The £258m clawback would also imply the clawback rising to £4.2m.
      £258m has emerged, it is legitimate to press to get clarity on the capital contribution.

    • Avatar Steve Jones

      @NGA

      By all means press the local BDUK contract about the details of the contract (I’m not sure what is commercially confidential though). However, it’s something of a moving target as the effect of clawback is that BT’s capital contribution goes up and that of the public funds goes down (as grants are repaid). So at which particular point do you want to measure capital contributions?

      Any original figures quoted in press releases aren’t very informative at all and there’s no way to conclude that there’s some form of missing BT capital contribution. It simply wasn’t the way the contracts were setup. In that BT’s capex can be assessed, the only thing we do know is what is published in the company accounts which is not broken down to any level of detail.

  2. Avatar NGA for all

    @Gadget & Steve, Total public funding was £13.8m. At 350 average cabinets, the total cost is less than the public funding. Hence unless there is substantive in-fill there is no need for BT capital during the build. There is even underspend against the £13.8m
    It should get recorded, or we should see signs of it in OCC Investment Fund.
    The £11m should come from the NAO £35Xm and would look to be in addition to the sum identified.

    • Avatar Steve Jones

      Please give this a rest. There is simply no mechanism to “force” BT to spend capital that you think has gone missing. The terms of the contract were call-off against a formula. As far as the cost of an “average” cabinet it concerned, you’d need access to the detailed accounts to know that (and what is included) and that simply isn’t going to happen as it’s all confidential (no way are we ever going to learn officially what BT are paying for their kit for instance).

    • Avatar NGA for all

      @The capital committed is a requirement of the state aid so it should be possible to find a means to verify its payment. The ‘clawback’ is not a substitute for the capital, the capital should feature before phase 1 is complete.

    • Avatar TheFacts

      @NGA – why do you think BDUK and the counties are not dealing with this correctly?

    • Avatar Steve Jones

      @NGA

      As you well know, the NAO commissioned an independent report (by Oxera) on the compliance of the scheme with EU state aid rules, which includes, of course, the auditing arrangements and issues such as unfair subsidy.

      https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/428381/The_UK_s_National_Broadband_Scheme_-_an_independent_evaluation.pdf

    • Avatar TheManStan

      Clearly his interpretation of all the information available is very different to those career journalists who are looking for that big scoop!

  3. Avatar NGA for all

    @Steve, Oxera was commissioned by BDUK and their report failed to have the existing State Aid measure renewed. One of the reasons could have been the fact that report did not reference LA expenditure.

    The Facts, maybe they are but it would be healthy to see them confirm the presence of BT’s capital contribution in these press releases. It should be simple to do.

    • Avatar Steve Jones

      As I understand it, the UK government wanted changes to allow for some non-competitive contracts in certain circumstances. In any event, if what had been done to date was considered to be non-compliant by the EU commission they would surely have considered legal action.

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