Super-fast broadband rollout 'faces £1bn funding shortfall'

Academics have described the government's super-fast broadband goal as "optimistic".

The government will need private sector sources to plug a £1.1 billion gap in its plan to fund the super-fast broadband rollout, according to academics at the London School of Economics (LSE).

A study commissioned by customer management software provider Convergys found that public funding for next-generation broadband projects currently totals £1.3 billion, the Financial Times reports.

This leaves a shortfall of more than £1 billion that will have to be met in order to achieve culture secretary Jeremy Hunt's aim of building the best super-fast network in Europe by 2015.

The LSE's report said this goal "seems optimistic" at the moment, although the plan to deliver basic broadband speeds to homes and businesses throughout the UK is currently on track.

"The target of 100 per cent coverage by basic broadband by 2015 is likely to be met, but it is less clear when targets of 90 per cent coverage by superfast broadband, and 100 per cent coverage by fast broadband, are likely to be met," the researchers commented.

Citing findings published by the University of Munich, the report said a ten per cent increase in broadband penetration leads to a rise of between 0.9 per cent and 1.5 per cent in GDP a head.

In March, the government identified the ten 'Super-connected Cities' that will be awarded a shared funding package of £100 million for the rollout of 'ultra-fast' broadband (services with a minimum download speed of at least 80Mbps).

The four UK capitals, as well as Birmingham, Bristol, Leeds & Bradford, Newcastle and Manchester, are due to receive this investment. Chancellor George Osborne said an additional £50 million fund will be created to bring ultra-fast broadband to more cities across the country.

In addition, it was announced that all but two local authorities had submitted their initial broadband plans before the deadline.