MP Criticises UK Gov Proposal to Spend Rural Broadband Money in Cities

The Shadow Technology Secretary, Andrew Griffith MP, has warned the new UK Government against a “shocking waste of taxpayers’ money” by potentially shifting public funding, which is currently earmarked for the rural-focused Project Gigabit broadband roll-out, and using it to help upgrade parts of major towns and cities (e.g. central London).

Just to recap. The £5bn Project Gigabit scheme aims to help extend 1Gbps (download) capable networks to reach at least 85% of UK premises by 2025 (we’re about to hit this target early), before aiming to achieve “nationwide” coverage (c. 99%) by 2030. Commercial investment has already delivered more than 80% of this, which leaves the government’s scheme to focus on tackling the final 10-20% (mostly rural and some sub-urban areas), where the private sector alone often fails.

The project primarily consists of several support schemes, including demand-led Gigabit Broadband Vouchers (GBVS) for specific premises (£210m), funding to extend Dark Fibre around the public sector (£110m) and general gap-funded network deployments with suppliers (rest of the funding) – known as the Gigabit Infrastructure Subsidy (GIS) programme.

Most of the project’s funding has already been committed, but around £2bn remains, and the new UK Government are known to be exploring how they could best utilise this in a second phase of the build programme. The first round of contracts and programmes are unlikely to deliver 99%+ gigabit coverage to every location, thus there’s still more work to be done on that side of things.

However, a new report in the Telegraph (via MSN) suggests that BDUK are exploring how at least some of the remaining public investment assigned to the project could be used to help tackle broadband slow-spots and “not-spots” in normally competitive urban areas, such as parts of central London. The article doesn’t specify how this would work, but it’s something the shadow (Conservative) technology secretary isn’t very happy about.

Andrew Griffith MP said:

“If confirmed, this would be a baffling decision by the Labour government that risks leaving people in the hardest to reach rural areas left in the slow lane without any credible path to fast, reliable broadband.

This programme was explicitly designed to build full-fibre to remote areas where the rollout is not economically viable for commercial providers.

To divert the funding to highly competitive areas such as central London would be a shocking waste of taxpayers’ money at a time the Government is snatching pensioners’ winter fuel allowances away.”

A government (DSIT) spokesperson said:

“We have been clear that addressing pockets of poor connectivity in all areas of the country is necessary to reach our goal of nationwide gigabit coverage by 2030 and grow the economy.

Rural areas remain a priority for us, with over a million rural premises now covered by contracts under Project Gigabit – with many more rural properties set to benefit in future. We are committed to exploring all avenues to achieve this ambition. No decisions have been made yet.”

Naturally, there is a bit of a twist to this story, which the Telegraph hasn’t picked up on. This reflects the fact that it was actually the previous government that, in 2023, began the process of exploring how the issue of urban slow and notspots could be tackled (here).

In fact, a trial solution was proposed earlier this year (here), which was due to have extended the gigabit broadband voucher scheme to be used in certain urban, as well as rural, areas (they also did something similar with the original ‘Connection Voucher’ scheme some years ago). But this may have been put on pause by the General Election, pending a decision by the new government.

The reality here is that some urban patches, which are typically dotted about like small islands inside major cities and towns, have long become notorious for being left neglected by commercial operators. The problem can be caused by all sorts of challenges (e.g. high build costs, issues with securing wayleave / access and permits or road closures etc.), while state aid and competition law often make it difficult to use public funding in such areas (i.e. locations where private investment should be able to resolve without intervention).

The easiest solution to the complex legal and competition dilemmas this can raise has typically been to use vouchers, hence the above proposal to extend the existing scheme. But it’s worth remembering that solving such complex areas isn’t always just a matter of money, and vouchers alone may not be enough.

The GBVS currently offers grants worth up to £4,500 to rural homes and businesses to help them get a gigabit-capable broadband service installed, which is available to areas with speeds of “less than 100Mbps” – assuming there are also no future plans for a gigabit deployment (either via private investment or state-aid). Some Local Authorities (LA) have, in the past, also provided top-up funding to boost the voucher values.