Latest Public Sector News

01.08.15

BT returns £129m to councils to reinvest in superfast broadband

High take-up rates of superfast broadband have activated a clause in the government’s contract with BT that mean the company will return £129m to the public purse, writes Poppy Murray.

The money will be given to councils to reinvest in providing further superfast broadband coverage to even more homes and businesses, much earlier than originally planned, the government says.

The Broadband Delivery UK programme (BDUK) amalgamates private sector and government investment to supply 90% of the UK with superfast broadband. 

Under the contract, if broadband take-up was higher than the 20% estimated in BT’s original business case, the company would return some money for reinvestment into further broadband coverage across the UK. 

BT based its original 20% assumptions on international comparisons and its experience in its own commercial roll-out, but the high take-up means it has reviewed the assumption upwards to 30%.

Culture secretary John Whittingdale MP said: “It’s fantastic to see that the roll-out of superfast broadband is delivering for customers and for the taxpayer. The government was clear from the start that as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would reimburse the taxpayer for reinvesting into further coverage across the UK. This now means that BT will be providing up to £129m cashback for some of the most hard-to-reach areas.

“Our £1.7bn superfast broadband programme is on track to reach at least 95% of the UK by 2017, and it is great to see homes and businesses making the most of everything that superfast speeds have to offer.”

Gavin Patterson, CEO of BT was also “delighted” by the news, adding that the company was glad to “share that success” by making the extra cash available to extend the roll-out to more BDUK homes and businesses, “earlier than planned and at no extra cost to the taxpayer”.

Earlier this year, BDUK commissioned Oxera to undertake an independent evaluation of the national broadband scheme, to examine its effectiveness and ensure it complied with the terms of the European’s Commission decision to grant the scheme ‘state aid clearance’. That report, which was generally positive, is here.  

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