High Demand Causes UK Gov to Reduce Gigabit Broadband Vouchers UPDATE

The government has today revealed that 7,000 UK businesses and surrounding homes have taken advantage of their £67m Gigabit Broadband Voucher Scheme (GBVS), but strong demand means they now expect the funding to dry up a year sooner than expected. In response the top voucher values have been cut to £2,500.

The GBVS scheme, which was officially launched in March 2018 following a successful pilot (here), forms part of the Government’s wider Local Full Fibre Networks (LFFN) programme. Essentially it offered vouchers with a value going up to £3,000 for businesses (SME), or £500 for residents, to help them with the costs of connecting to “full fibre” (FTTP/H) broadband or leased line from an approved ISP.

All of this is intended to help support the government’s commitment to making Gigabit (1Gbps+) capable “full fibre” broadband available to at least 10 million UK homes and businesses by 2022, which will be followed by 15 million in 2025 and then there’s also an as yet unfunded aspiration to achieve “nationwide” coverage by the end of 2033.

We should point out that the GBVS is more business orientated and the only way for residents to benefit is as part of a local community group, which must include small businesses. But the good news is that they’ve now made it easier for more residents to participate (up to 10 residents can now participate for every one SME).

However, the GBVS may have become a victim of its own success. The £67 million scheme was initially expected to run until March 2021, but “high demand” (7,000 vouchers have already been issued) means that their funding is now “expected” to dry up a year, or possibly even sooner, than originally expected (i.e. around the end of 2019 or early 2020).

Margot James MP, UK Minister for Digital, said:

“Our modern Industrial Strategy is clear on the importance of connectivity, as we build a full fibre Britain that is fit for the future. These vouchers provide practical and immediate help to firms struggling with slow broadband speeds.I encourage small businesses around the UK to apply now.”

Mike Cherry, FSB National Chairman, said:

“Access to good broadband is vital for small businesses across the UK, and with the clock ticking on this scheme, it’s important small businesses don’t delay if they want to apply for funding.”

To date, demand for the scheme has been strongest in the South West, followed by the South East, Yorkshire and the North West of England. But in order to ensure that there are enough vouchers left, the Government has now reduced the maximum value of each from up to £3,000 to £2,500 in a move that they hope “will encourage neighbouring businesses to ‘pool’ their vouchers.”

The Department for Digital, Culture, Media and Sport (DCMS) said they now “expect more than 1,000 additional businesses and homes to benefit,” although this could be problematic since the original announcement correctly noted that “in some areas the value of a single voucher will not fully meet the installation costs of a gigabit capable full fibre connection” (hence the ‘pool’ remark above).

Regional/Nations Breakdown of Vouchers Issued (30th Oct 2018 Data)

Gigabit Broadband Voucher Scheme (GBVS)
https://gigabitvoucher.culture.gov.uk

UPDATE 4:04pm

We’ve been informed that 1,197 vouchers have so far been issued to homes (as opposed to businesses), which comes out of the 7,000 total.

UPDATE 13th Nov 2018 @ 11:01am

We’ve had a new ISP comment.

James Warner, Glide Business Director of Sales and Marketing, said:

“The Government’s announcement of a decrease in the maximum value of vouchers available for businesses to claim off the install of gigabit capable services is disappointing.

Whilst it is an encouraging sign that there is a high demand of vouchers, the change to the maximum value of £2,500 instead of £3,000, poses a very real risk to thousands of companies who need this incentive.

Through the Gigabit Broadband Voucher Scheme, Glide have been working tirelessly to support over 600 businesses to connect to the ultrafast broadband that is vital to their day to day operations, and competing well into the future. Whilst we echo Margot James’ sentiment that the vouchers give both a practical and immediate value, our fear is that this announcement will dilute the importance of full fibre and its roll out.

It also puts more pressure for ISPs such as Glide to invest even more in their networks to support the ever-growing demand. Although Glide remains committed to unleashing fibre connectivity across the country, this decision perhaps will be detrimental in slowing down both ISPs’ pace and ability to reach the businesses which have oft been forgotten by the incumbent.”

UPDATE 13th Nov 2018 @ 1:58pm

We’ve also added a comment from Zen Internet.

Paul Stobart, CEO of Zen, told ISPreview.co.uk:

“Britain has often been called a nation of shopkeepers, and the Government’s plan to bring its small businesses into the 21st century is a good one, but it needs to go further. It’s clear there’s huge demand from them for better broadband, especially for those that rely on it for everything from fulfilling orders to building or maintaining a presence online.

The Government must continually invest in these areas if it wants to strengthen the backbone of the UK, and we hope to see projects like this as just the start of things to come.”