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Government announces £440m boost for rural broadband rollout

Thursday, December 22nd 2016 by Phil Wilkinson-Jones

More than £440m is to be spent on taking superfast broadband to 600,000 homes in some of the remotest parts of the UK, the government has announced.

The cash comes from a combination of “efficiency savings” and money already invested in the Broadband Delivery UK (BDUK) project that is now being returned by BT.

Culture secretary Karen Bradley said the investment would give families and businesses in “hard-to-reach areas” fast and reliable internet connections.

The BDUK rollout, funded by the government and delivered mostly by BT, has given around 4.5m premises access to superfast broadband.

And take-up levels are good enough to trigger a clawback mechanism inserted into the original deal, which means BT has to repay some of the original subsidy so it can be reinvested in the rollout.

New figures show that around 1.5m homes and businesses in areas connected by BDUK have signed up for fibre connections.

That’s a take-up rate of around 30% – easily above the 20% target set at the project’s outset.

As a result, BT will be releasing £292m to fund extra connections, with a further £150m coming from savings made during delivery of the first phase of the programme.

Mrs Bradley said: “Our Broadband Delivery UK programme is giving families and businesses in hard-to-reach areas the fast and reliable internet connections which are increasingly at the heart of modern life.

“Strong take-up and robust value-for-money measures mean £440m will be available for reinvestment where it matters – putting more connections in the ground.

“This will benefit around 600,000 extra premises and is a further sign of our commitment to build a country that works for everyone.”

She said more people signing up will unlock extra funding and help connect even more homes.

'Serious progress'

Malcolm Corbett, chief executive of INCA, the Independent Networks Co-operative Association, said the extra funding should be put out to competitive tender.

“Just this week we have seen the announcement that rural fibre provider Gigaclear has been awarded new contracts in Devon and Somerset to deliver full fibre connections to more than 35,000 underserved rural properties.

“For the local councils, citizens and businesses the deal is fantastic. Gigaclear will contribute more than two thirds of the £62.25m project costs.

“If the additional £440m of grant funding clawed back from BT could achieve anything like the same level of private sector match investment we will make serious progress towards the government’s goal of a ‘full fibre and 5G’ digital infrastructure.”

Dr Charles Trotman, rural business adviser for the CLA, which represents landowners and rural businesses, said: “It is entirely right that BT Group, which is providing the additional cash, recycles money from the windfalls received from the programme back into the scheme.

“BT Group is both the main recipient of public money, provided to BT Openreach to fund the roll out of infrastructure, and is also the main commercial provider of internet services to homes and businesses once they are connected.”

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