Gov Expand CityFibre’s Project Gigabit Broadband Rollouts in 9 UK Contracts UPDATE2

The Government’s Department for Science, Innovation and Technology (DSIT) has published contract modification notices for CityFibre’s state aid funded Project Gigabit broadband roll-outs across four regions – Hampshire (Lot 27), Suffolk (Lot 2), Cambridgeshire (Lot 5) and Norfolk (Lot 7). The changes increase the level of committed public funding and often also the contracted scope.

Just to recap. The original announcement in July 2024 (here) pledged £114m for Norfolk to help CityFibre expand their full fibre (FTTP) network to reach an additional 62,200 homes and businesses in hard-to-reach rural areas, while Suffolk saw a commitment of £100m to reach 79,500 premises and Hampshire got £104m for 75,500 premises (this excludes the impact from CityFibre’s complementary commercial builds).

Separately, during March 2023, the operator also secured £69m to reach a further 45,000 premises in Cambridgeshire and adjacent areas under the same project (here). Since then, CityFibre has begun construction work on all of these projects, as well as several other Project Gigabit contracts.

However, today we’re only focused on the above four contracts, where the government has just published formal contract modification notices, which increases the level of committed public funding for each.

CityFibre’s BDUK Contract Modifications

Hampshire (Lot 27)

Original figure: £104m

Awarded value after modification £127,875,417, increase in value of £23,700,419.

Suffolk (Lot 2)

Original figure: £100m

Awarded value after modification £116,015,193, increase in value of £15,615,917

Cambridgeshire (Lot 5)

Original figure: £69m

Awarded value after modification £73,466,901 increase in value of £4,830,110.

Norfolk (Lot 7)

Original figure: £114m

Awarded value after modification £128,804,454, increase in value of £14,587,891.

The reality is that such contracts are not static and their scope, as well as committed levels of public funding, can change over time for a number of different reasons (as instructed by regular ‘Public Reviews’ of UK deployment plans). For example, commercial operators may expand or reduce their deployment plans in the same region, which can reduce or grow the scope for public investment within a contracted area.

The contracted operator could also find the deployment more expensive or even cheaper than previously envisaged, such as due to changes in build costs and interest rates / inflation, as well as any unexpected obstacles to street works or greater efficiencies of build than planned or expected.

In other cases, such as in Norfolk, we already know that a big chunk of the recent funding increase was because, at the time of the original award, several thousand additional premises were still being reviewed for future inclusion into the contract (here). But officially the latest contract modifications only list the following reasons, without giving any specifics.

Reasons for modification

Need for additional works, services or supplies by the original contractor/concessionaire.

Description of the economic or technical reasons and the inconvenience or duplication of cost preventing a change of contractor:

Additional scope added to the contract in accordance with the UK subsidy control regime

The new notices make no mention of the numerical impact upon premises passed, although the latest documentation from the Government’s executive Building Digital UK (BDUK) agency now lists each contract as having the following coverage targets: Hampshire (86,371 premises – up from 75.5k), Suffolk (88,970 – up from 79.5k), Cambridgeshire (47,154 – up from 45k) and Norfolk (75,587 – up from 62.2k).

Suffice to say, the deployments may now cost a fair bit more, but they’re also going to reach more premises than originally planned. This could of course also mean that they’ll take a bit longer to reach completion than originally envisaged, as there’s now more work to be done.

On the flip side, BDUK do seem to pump out a lot of different figures – in different places – for the same contracts, which can be confusing and could easily be cleared up if they just centralised how they communicate all these changes and updates. We should add that BDUK are aware of this problem and have been looking to tidy things up in the near future.

UPDATE 7th Feb 2025 @ 1:31pm

Several more contract modification notices have now been issued for CityFibre’s other deals. The details are as follows (we don’t currently have data on the ‘premises passed’ changes for these):

Bedfordshire and Hertfordshire

Awarded value after modification £51,262,631, decrease in value of £176,369

Berkshire, Buckinghamshire and Oxfordshire (Lot 26)

Awarded value after modification £64,933,480, increase in value of £6,174,480

Kent (Lot 29)

Awarded value after modification £119,499,328, increase in value of £7,217,328

East and West Sussex

Awarded value after modification £105,650,972, increase in value of £5,013,972

Leicestershire and Warwickshire (Lot 11)

Awarded value after modification £77,738,400, increase in value of £6,198,400

UPDATE 24th Feb 2025

The gov has tweaked the premises count for the Hampshire lot again, which will now deliver 86,371. This largely reflects changes in commercial build plans/coverage.