Government Set to Raise Value of UK Gigabit Broadband Vouchers

The Government’s Building Digital UK (BDUK) team has informed ISPs of several forthcoming changes to their Gigabit Broadband Voucher Scheme (GBVS), which helps those in rural areas to get a gigabit-capable internet connection installed. The big news is that the maximum voucher values are to be increased.

The GBVS scheme normally offers vouchers worth up to £1,500 for homes or £3,500 for businesses to help them get a gigabit-capable broadband (1000Mbps) service installed, which is available to areas with broadband speeds of less than 100Mbps available – assuming there are also no near-term plans for a gigabit deployment in the same area (either via commercial or state aid supported builds).

Some local authorities have also provided top-up funding for this, which in many cases has effectively doubled the value of these vouchers. Naturally, vouchers with bigger values are handy because they enable operators to deploy into increasingly remote areas, where the build costs would normally be too high for such networks to proceed.

However, the scheme has had a bit of a rocky existence since it was re-launched last year, which is in no small part due to the difficulty that BDUK has had with balancing it against Project Gigabit’s larger deployment contracts under the Gigabit Infrastructure Subsidy (GIS) programme.

Both schemes target roughly the same sort of rural areas (e.g. Ofcom’s Area 3) and thus have to avoid duplicating their public investment, which has caused some delays and disruptions (example). It doesn’t help that Openreach’s own complementary Fibre Community Partnership (FCP) scheme is also still on hold (here), although many alternative networks continue to work with the voucher scheme.

What’s Changing with GBVS?

The feedback from ISPs suggests that BDUK will implement a series of changes from 5th December 2022, although some of the specifics have yet to be revealed. For example, voucher eligibility will now be determined based on commercial coverage data returns consolidated from recent Open Market Reviews (OMR) and Public Reviews, which have been conducted to inform their Project Gigabit procurements. The reviews identify commercial coverage for the next 3 years, thus enabling BDUK to target public funding toward areas of market failure.

The BDUK team are also working to improve how they process vouchers (inc. better documentation of this) and will be launching a new funding platform too, which is intended to make it easier for suppliers to interact with the scheme. Supplier reporting obligations will also be more clearly defined. All of this sounds positive, although the proof will be in how suppliers react once they’ve had a chance to engage with the new approach.

However, the biggest change is the confirmation that the government will raise the maximum voucher values for both homes and businesses, although at the time of writing BDUK has not yet confirmed what the new values will be (it’s still pending approval from HM Treasury). But as above, bigger vouchers enable suppliers to push faster broadband speeds into increasingly remote locations.

One issue to be aware of here is that BDUK may sometimes need to control subsidy, due to value for money requirements, and when that happens they’ll now constrain the volume of vouchers as opposed to reducing their maximum value (the goal here is to reduce the risk for suppliers when reaching the most rural communities, while also reducing the number of transactions).

We’ll report back as soon as the new voucher values are announced.