Govt publish evaluation of pre-2021 UK gigabit broadband voucher schemes

The Government’s Building Digital UK (BDUK) directorate has today published a final evaluation of their publicly funded pre-2021 broadband voucher schemes, including the earlier incarnation of their Gigabit Broadband Voucher Scheme (GBVS) and the Rural Gigabit Connectivity (RGC) scheme. Overall both were found to have produced various positive impacts.

Just to recap. The GBVS in this report – delivered between November 2017 and May 2020 – was originally more focused upon connecting smaller businesses (SMEs) and helping to stimulate the UK’s full-fibre broadband market. By comparison, the RGC – delivered between May 2019 and March 2021 – adapted a similar approach to the GBVS, albeit aimed at supporting delivery into rural areas only.

The full report into both of these is a bit of a dry read, but it focuses on measuring and assessing the effects of vouchers on improving connectivity, supporting business and local economic growth, delivering social and environmental benefits, and stimulating competition in the broadband market.

The previous GBVS scheme, which is not to be confused with BDUK’s existing scheme of the same name, closed to new applications in May 2020 and was used to connect 29,200 premises in total. By comparison, the RGC closed to new applications on 31st March 2021, with some projects transferring to the current gigabit voucher scheme. RGC was used to connect 12,500 premises.

We’ve attempted to summarise the new report’s findings below. However, the report itself mentions that its connectivity analysis measures download-speed changes rather than actual changes in gigabit coverage, due to the lack of granular historical coverage data.

Key findings of both

➤ The vouchers produced lasting improvements in broadband speeds. Areas receiving vouchers saw significantly larger increases in average download speeds than comparable areas without them, with the effect generally lasting for at least three years.

➤ The RGC was particularly effective at improving connectivity. RGC vouchers produced substantially larger speed gains than the earlier GBVS, and were also more cost-effective at generating additional speed. For example, the report notes that some RGC-treated postcodes saw median speed improvements of 60–240Mbps after three years.

➤ Project vouchers worked better than individual premises vouchers. Combining vouchers to support a network build produced larger and more sustained connectivity improvements than standard individual vouchers.

➤ There was a significant business benefit. By three years after receiving a voucher, supported businesses had 6.9 percentage points higher employment and 16.5 percentage points higher turnover than comparable businesses. Productivity also declined less. But these benefits are said to have largely disappeared by year four.

➤ Earlier recipients benefited more. The strongest business effects occurred among businesses receiving vouchers in 2018/19 and 2019/20. The 2020/21 cohort showed much weaker additional effects, probably because gigabit availability was by then expanding more widely anyway.

➤ The schemes appear to have helped stimulate the alternative-network market. There is strong evidence that vouchers helped smaller/newer providers expand into areas that might otherwise have been commercially difficult, and helped some attract further private investment.

➤ But they did not necessarily create local network competition. Vouchers increased competition at national and regional levels, but in many rural/high-cost areas they effectively supported one provider, rather than creating competing networks.

➤ There were some big household wellbeing benefits. The evaluation estimates £217m–£367m of wellbeing benefits over three years when indirect benefits to households connected by voucher-funded networks are included. However, these figures are modelled and therefore less robust than the business-impact estimates.

➤ There were modest environmental benefits, principally from reduced travel and commuting associated with greater homeworking — estimated at roughly 8,600 tonnes of additional CO₂e savings over three years.

➤ Overall, the schemes are said to have represented good value for money. Around £139m of programme costs generated an estimated £395m–£546m of monetised benefits, giving an overall benefit-cost ratio of 2.8–3.9:1. RGC’s estimated ratio was higher at 3.5–5.9:1, although the report cautions that much of RGC’s higher figure comes from less robust modelled wellbeing benefits

However, it’s always worth noting that trying to accurately gauge the economic impact of deploying faster broadband is notoriously difficult, not least since most premises won’t be starting from a point of zero connectivity. Likewise, we’re all very different in our consumption requirements, and not all homes and businesses get the same benefit from having access to significantly faster broadband speeds than are currently available.