By Richard Johnstone | 5 July 2013
The £1.5bn plan to make superfast broadband available to 90% of UK homes and businesses will be achieved almost two years later than planned, auditors warned today.
The National Audit Office found the plan to expand provision to 4.6 million extra homes and businesses, mainly in rural areas, had been delayed by the need to comply with European Union state aid rules. This took six months longer than expected, meaning only 9 of 44 local projects will meet the target by the original deadline of May 2015, a report has found.
Last month, the Department for Culture, Media and Sport revised the deadline to December 2016.
Under the scheme, the department is responsible for awarding grants to a local authority or a group of authorities, which then procure the superfast broadband services for their areas.
The department developed a standard contract for local bodies to use, in an effort to safeguard value for money.
The DCMS also intended private companies to bid for cash in a competition, to ensure that public funds were to be well spent.
However, the NAO's report, Rural broadband programme, concluded some of these safeguards had not been effective.
Competition ‘had been limited’ due to the low number of bidders. BT was eventually left as the only active participant, and is likely to win all 44 local projects and pick up an estimated £1.2bn of public money.
In addition, the department secured only limited transparency over the costs in BT’s bids. It did not have strong assurance that costs, take-up assumptions and the extent of contingency contained in the company’s bid for funds were reasonable.
But the DCMS had put in some controls on spending, such as only paying costs supported by invoices or when suppliers reach key milestones.But this meant achieving value for money would require scrutiny of hundreds of thousands of invoices, and that would depend on the level of skill and resources available in the department and in councils, the report added.
Auditor general Amyas Morse said the project was moving forward late and ‘without the benefit of strong competition to protect public value’. This meant the department would need to make ‘active use of the controls it has negotiated’ to ensure taxpayers' funds were well spent, he added.
Responding to the report, a DCMS spokeswoman agreed that effective contract enforcement was important, and said the department was working with local authorities to ensure this.
‘Government is delivering a transformation in broadband and already 100,000 more homes and businesses are getting access to superfast broadband each week,’ she added.
‘Around 88% of the country will have access to superfast broadband by December 2015, with an estimated 90% getting superfast coverage by early 2016.’
