{"id":36844,"date":"2024-01-15T09:04:48","date_gmt":"2024-01-15T09:04:48","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36844"},"modified":"2024-01-15T09:11:37","modified_gmt":"2024-01-15T09:11:37","slug":"devon-uk-use-bt-broadband-gainshare-to-tackle-council-deficit","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/01\/devon-uk-use-bt-broadband-gainshare-to-tackle-council-deficit.html","title":{"rendered":"Devon UK Use BT Broadband Gainshare to Tackle Council Deficit"},"content":{"rendered":"

The Devon County Council (DCC) in England has confirmed that it plans to use \u00a37.8 million returned by BT<\/a>, which relates to the clawback (gainshare) mechanism in past rural broadband upgrade contracts, to help plug the local authority’s financial deficit – instead of reinvesting it into further broadband upgrades.<\/p>\n

Just to recap. The UK Government’s original Superfast Broadband<\/strong> (SFBB) programme, which was managed under the Building Digital UK<\/a> (BDUK) framework, included a clawback (gainshare) clause in its state aid supported contracts with network operators like BT<\/a> (Openreach<\/a>). This essentially required the operator to return part of the public investment once take-up (customer installs) passed a certain point in their intervention areas (usually 20%).<\/p>\n

NOTE:<\/strong> The original SFBB project attracted around \u00a32bn of public investment from both the government and local bodies (councils etc.), which helped to extend fixed “superfast broadband<\/em>” (30Mbps+) ISP networks – mostly via FTTC<\/a> technology (plus some wireless and FTTP<\/a> solutions) – to reach around 97-98% of UK premises.<\/div>\n

The value of this grew as take-up grew, and the government generally pushed to see this funding being reinvested back into further broadband improvements, which did generally happen – often as part of various extension contracts. But outside of the contractual period (often c.7 years, though this may vary), each council would eventually reach a point where they gained greater freedom over how the clawback could be reinvested (i.e. it could be reinvested in non-broadband areas too).<\/p>\n

According to the final evaluation report<\/a> for the original SFBB programme, network providers were expected to return \u00a3147m to the public sector (in 2019 prices) because delivery costs were overstated. Network providers were also expected to return a further \u00a3714m (in 2019 prices) to the public sector due to higher-than-expected take-up (largely driven by the bigger Phase 1 contracts that all went to BT). But the exact total won’t be known until all of the related contracts, across several phases, have fully run their course (potentially c.\u00a3900m for clawback).<\/p>\n

All of this brings us to the latest budget monitoring report from the Devon County Council (DCC). The report clearly notes that the local authority plans to use the money they get back from BT via clawback to help plug their budget deficit, rather than push it back toward future broadband upgrades, which in the current climate is perhaps much more understandable.<\/p>\n

Extract from DCC’s Budget Report<\/strong><\/p>\n

Non-service items, which include capital financing costs, interest earned and business rates pooling gain income, are now forecast to underspend by \u00a35.9 million, an improvement of \u00a39.5 million from Month 6.<\/p>\n

The most significant elements of this change are the Authority\u2019s \u00a37.8 million provisional estimate (with final sum expected to be confirmed in March 2024) of its share of income from the clawback from Connecting Devon and Somerset Broadband phase 1 contract (now expected to be released a year earlier than anticipated) and the release of \u00a31.5 million from the transformation contingency.<\/p><\/blockquote>\n

A related report from the Midweek Herald<\/a> includes feedback from a council spokesperson, which appears to suggest that the local authority doesn’t need to use the clawback to support further broadband-related investments because the UK Government’s new \u00a35bn Project Gigabit programme essentially supersedes it.<\/p>\n

“As a result, councils who are facing huge financial pressures are looking to reinvest their remaining share of the gainshare money to protect vital public services and minimise the need for budget reductions<\/em>,” added the spokesperson.<\/p>\n

Project Gigabit aims to extend networks capable of delivering download speeds of at least 1000Mbps (1Gbps) and uploads of at least 200Mbps to 85% or more of UK premises by the end of 2025, before rising to \u201cnationwide<\/em>\u201d coverage by around 2030 (here<\/a>).<\/p>\n

However, it’s important to note that not even Project Gigabit expects to achieve 100% coverage (government statements use c.99%), as some areas are simply too expensive to reach via full fibre (FTTP<\/a>). Likewise, 99% is more of a target than a guarantee, so there’s always the potential to fall short.<\/p>\n

Each local authority can of course choose for itself how to reinvest the clawback post-contract, and many are reinvesting it into broadband – often by harnessing temporary loans (until clawback is formally released to pay those off) or extending existing contracts with BT etc.<\/p>\n

In other cases, some councils have linked clawback to funding boosts alongside the government’s gigabit voucher schemes or the launch of new community broadband initiatives. But clearly Devon is taking a different approach, which further down the road may leave them with less flexibility to tackle any remaining gaps in connectivity.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Devon County Council (DCC) in England has confirmed that it plans to use \u00a37.8 million returned by BT, which relates to the clawback (gainshare) mechanism in past rural broadband upgrade contracts, to help plug the local authority’s financial deficit – instead of reinvesting it into further broadband upgrades.<\/p>\n","protected":false},"author":1,"featured_media":23098,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[471,438,38,439],"class_list":["post-36844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bduk","tag-devon","tag-politics","tag-somerset"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111759169267793650","error":""},"yoast_head":"\nDevon UK Use BT Broadband Gainshare to Tackle Council Deficit - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The Devon County Council (DCC) in England has confirmed that it plans to use \u00a37.8 million returned by BT, which relates to the clawback (gainshare)\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2024\/01\/devon-uk-use-bt-broadband-gainshare-to-tackle-council-deficit.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Devon UK Use BT Broadband Gainshare to Tackle Council Deficit - 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