By John Thornton | 1 March 2013
More government investment in broadband should be a no-brainer for Britain. It would boost the economy and help bring us up to speed with other countries
Reliable and efficient infrastructure networks form the backbone of a modern economy. With UK growth stalling, spending on transport and communications can provide a powerful catalyst for unlocking additional investment and raising productivity.
Much of our physical infrastructure dates back to investment by the Victorians and comparisons are often made with the pace of change and innovation 150 to 200 years ago. The first passenger-carrying railway was pioneered in the UK in 1825 and the national rail network was largely completed within 25 years.
Contrast this with London’s Crossrail. The original idea dates back to the 1940s, the Crossrail Bill went through Parliament in 2005 and the first trains are now expected to run in 2018.
However, this is probably an unfair comparison as tunnelling under a highly developed London, with modern planning controls, health & safety and consultation processes, is undoubtedly more challenging in engineering, financial and political terms than it would have been in Victorian times.
By contrast, implementing broadband ought to be a much simpler task. ‘Data’ is the raw material for the twenty-first century and broadband is the infrastructure that is used to deliver it and turn it into products and services. Between 2004 and 2009, the internet economy contributed 23% of economic growth. In 2010 alone, it accounted for 8% of gross domestic product and this proportion is expected to rise to almost 12.5% in 2016. It contributes more to GDP in the UK than in any other Group of Twenty country.
As with Victorian spending on infrastructure, the growth and speed of investment in broadband has largely been driven by the private sector, with some regulation to increase competition. Provision has responded to market forces, which means services are cheaper than in many other developed economies, but not as fast or extensive.
In 2010, the new coalition government set an ambition for the UK to have the ‘best’ superfast broadband network in Europe by 2015. This was refined in 2012 to include being the ‘fastest’. Ministers have backed this strategy with £530m of funding, plus a further £300m to support ‘super-connected cities’ and the extension of mobile coverage.
Combined with additional local funding and European Union support, the total public investment should be over £1.3bn.
However, there is a hill to climb.We are ranked eighteenth in the world in terms of speed; we have less fibre-optic connection than any other country in Europe; and we lagged behind other G20 countries in rolling out fourth-generation – 4G ¬ mobile networks.
A recent report from the Policy Exchange think-tank, The superfast and the furious, looks at the priorities for broadband policy in the UK. It concludes that the government should ‘recast’ its policy on broadband connectivity, focusing explicitly on economic and social outcomes, rather than pursuing ‘speed’ as a proxy for progress.
This includes ensuring minimum speed requirements are maintained and updated to support evolution in services, providing access for all who want it, together with proposals to better empower consumers.
The government should regulate only where it is possible that the market will not provide adequate services, for example in rural communities.
Broadband access and speed are particularly important for public service bodies as we move faster towards the government’s policy of ‘digital by default’. However, there is a real danger that the modernisation of online public services could be massively degraded by the requirement to cater for the lowest (slowest) common denominator, rather than anticipating and stimulating fast and responsive services.
John Thornton is director of e-ssential Resources, and an independent adviser and writer on innovation, business transformation and financial management [email protected]
This article first appeared in the March edition of Public Finance
