Welsh Government Sees Opportunity to Review Gigabit Broadband Plan

The First Minister of Wales, Vaughan Gething (Labour), has jumped on the recent 2024 General Election result by indicating that it gives them a “window of opportunity” to re-engage with the new Labour-led UK Government – in the hope of “putting right what’s gone wrong” with Project Gigabit‘s broadband roll-out plan. But big changes risk big delays.

Just to recap. The £5bn (state aid) Project Gigabit broadband scheme (i.e. aiming for 85% gigabit coverage of the UK by 2025 and “nationwide” [c.99%] by 2030) has previously indicated that a total of 327,174 premises in Wales might ultimately need state aid help in order to access gigabit-capable broadband connections in the future (rising up to 984,806 premises if planned commercial builds fail to deliver on their promises).

However, Project Gigabit has been slow in some areas, such as with respect to the award of some major subsidised deployment contracts (e.g. Wales, Scotland etc.). Part of that delay stemmed from the prior debate over whether or not the Welsh Government or the central Building Digital UK (BDUK) agency would ultimately be in control of the scheme for Wales. In the end, BDUK has largely retained control, which is already known.

Vaughan Gething, First Minister of Wales, said:

“What we now have is, there was an additional programme [Project Gigabit] and there’s been a conversation with the previous Government about whether that would be delivered by the Welsh Government, as, if you like, agents to deliver that—because we have a great deal of understanding and we have established relationships with different people—or whether the UK Government would do that.

And the UK Government then said it would do it, and for the simple reason that it both wanted control, and, after all, it’s a reserved area of responsibility, but it’s also about the fact that the deal they were offering would have meant that Welsh Government’s time and resources would still have been soaked up into that in a way that wouldn’t have been recognised in the funding model.”

BDUK currently have two Cross-Regional (Type C) procurements related to Wales in their Project Gigabit programme. Openreach (BT) is the preferred bidder for Type C contracts, which targets premises (i.e. subsidise the design, build and operation of a new gigabit network) in areas where no or no appropriate market interest has been expressed before to BDUK, or areas that have been de-scoped or terminated from a prior plan. Such areas are often skipped due to being too expensive (difficult) for other, often smaller, suppliers to tackle.

The first one (Call-Off 2) – targeted at West and North Devon, North West, Mid and South East Wales – is valued at £139.1m and could benefit 47,100 hard-to-reach premises. This is in live procurement and is due to be awarded by around the end of summer.

The second one (Call-Off 3) – targeted at East and South Shropshire, North Herefordshire, North Wales, and South West Wales – is valued at £136.1m and could benefit 49,600 premises. This is in the process of becoming a live procurement and could be awarded by the end of 2024.

However, such plans could be open to change, which follows after the First Minister indicated (yesterday) that the Welsh Government were looking to have “conversations” with the new government in Westminster about enhancing or changing the project.

Vaughan Gething added:

“Now, I’m still not convinced that the programme that the current UK Government is inheriting will deliver for all of our communities. So, there is a window of opportunity to talk about that, but it’s the challenge of how quickly you can put right what’s gone wrong. So, yes, there will be conversations.

The Cabinet Secretary for the economy is the lead Minister on this still. I think that’s the right place for leadership across the Government on this. And I am expecting now to get deeper into all of the challenges under the bonnet, and digital connectivity will be one of those, and I think there is a level of ambition and recognition that this is an important—[Inaudible.]—urban or rural Wales or urban or rural Britain.”

At this stage there’s no detail on what sort of tweaks the Welsh Government might be looking to make, although the Labour Party’s 2024 General Election Manifesto (here) has previously made clear that they would be making a “renewed push to fulfil the ambition of full gigabit and national 5G coverage by 2030.” But so far we’ve only really heard about their desire for more flexibility in the planning system (here) and not much in the way of how they might tweak Project Gigabit itself.

The new government has previously given mild support to Project Gigabit and appears to be aware that any big changes would risk adding further delays to the programme, which might be counter-productive to the roll-out. But it remains difficult to judge what impact any changes might have before we know what those changes are going to be. At this stage we are not anticipating any major changes to existing procurements, but you never know.