Cheshire ducks broadband roll-out criticism

The way broadband has been rolled out to rural UK areas has been criticised in a damning report by MPs. The Commons Public Accounts Committee (PAC) said the government had failed to ensure proper competition by awarding all 26 rural broadband contracts to BT, including across Cheshire.

But Cheshire East Council insists that the broadband rollout in rural areas locally is "right on track" and that the first village, as yet unnamed, will be connected by Christmas.

Councillor David Brown told a recent Chester East cabinet meeting: "Plans are going remarkably well. The infrastructure rollout is right on track. We are well ahead of the game."

Cheshire East says it is well on target to deliver broadband to 96% of rural areas by 2015 and is actively seeking funding to connect the remaining 4% within the same timeframe,

Nevertheless, nationally the Department for Culture, Media and Sport has been accused of giving away public money without proper checks. The government defended the process as fair and BT said it was "disturbed" by a report that was "simply wrong".

The Department for Culture, Media and Sport said in a statement: "We put in place a fair commercial process and encouraged different suppliers to bid.

"We are disappointed that the PAC fails to recognise that thousands of rural premises who have never had a decent broadband supply are now getting one, something that is vital for farmers, rural businesses and all those who live outside major cities."

Culture Minister Ed Vaizey said the broadband programme is ''very good value for money''
Making sure that those living in the countryside get broadband speeds comparable to those living in towns and cities has long been something the government has grappled with.

Commercial firms such as Virgin Media and BT see little profit in rolling out services to areas with few people living in them.

So, as an incentive, the government provided a subsidy pot of £230m, with an extra £250m available after 2015, and awarded contracts on a county-by-county basis. Each county also contributed funds to bring superfast broadband to their areas.

But only Fujitsu and BT entered the bidding competition, with Fujitsu later withdrawing. BT has so far been chosen in 26 counties and is expected to win the 18 remaining contracts.

The company has said it will commit £2.5bn to the project.

"The Department for Culture, Media and Sport's design of the rural broadband programme has failed to deliver the intended competition for contracts, with the result that BT has strengthened its already strong position in the market," summarised the PAC report.

It said that its contract terms were "overly generous" to BT and did not "promote value for money".

It also accused the department of failing to check that BT's bids were reasonably priced and said there had been "wildly inaccurate" estimates of costs.

"Local authorities are contributing over £230m more to the programme than the department assumed in its 2011 business case and BT over £200m less, yet BT will ultimately benefit from £1.2bn of public funding," the report said.

BT was also criticised in the report for failing to provide local authorities with full information about where exactly it would roll out superfast broadband services, which in turn hampered rivals from drawing up alternatives.

The UK's target is 90% coverage by 2017 but at the lower speed of 24Mbps. This is modest compared with France which plans almost universal coverage at 100Mbps by 2020 while Germany expects to have around 70% coverage at 50Mbps by 2014.

Even countries that have been in financial crisis are aiming higher with Greece wanting 100% of citizens to have access to 30Mbps by 2020, while Ireland plans 100Mbps for all by 2020.

This article is from our news archive. As a result pictures or videos originally associated with it may have been removed and some of the content may no longer be accurate or relevant.