Government to invest £440 million to help citizens get faster broadband as BT fails to meet targets
The government has said £440m has been found so about 600,000 more premises can gain access to superfast broadband. The cash comes from “efficiency savings” and money returned by BT as part of the government’s flagship broadband rollout scheme.
Culture Secretary Karen Bradley said the funds would help to bring faster speeds to homes and businesses in some of the most remote parts of the UK.
Experts said it was not all “new money” but would still be welcomed. The cash will be made up of £150m in cost savings and the rest in the form of returned subsidies from BT, the government said.
Under a 2010 deal, the government paid BT to roll out superfast broadband in hard-to-reach areas where providers had said it was not cost-effective to install broadband infrastructure.
As part of the agreement, if more than 20% of premises in those areas bought superfast broadband, BT had to repay some of the subsidy.
On average, the take-up has been 30.6%, leading to a forecast repayment of £292m, the Department for Culture, Media and Sport said.
Ministers set up the programme so that by the end of next year 95% of UK premises would be able to buy superfast broadband – defined as 24Mbps. Such speeds enable families to stream TV on multiple devices at the same time.
The extra funds are designed to reach the remaining 5% of the UK and improve speeds where coverage is patchy.
“The key point is this is not £440m of new money,” said Andrew Ferguson, consumer telecoms expert at Think Broadband.
Of the £292m to be returned by BT, the company has already announced about £150m, he said.
Still, regardless of the source of the funds, more money going into infrastructure is “good news”, he said.
“The pace of broadband rollout doesn’t necessarily match what everyone wants and households aren’t necessarily getting as much information as they would like,” he added.
The company has faced criticism for the speed of the rollout and the quality of the broadband coverage.
However, the government and BT said it was a “win-win” in that more households were taking it up, triggering clawback payments that would help other premises access faster broadband speeds.
“We’re delighted that the success and efficiency of our delivery will mean hundreds of thousands more homes and business could get faster broadband than originally expected,” a BT spokesman said.
The government has not set a timeline for when the 600,000 premises will benefit.
It comes after Chancellor Philip Hammond announced £1.14bn in government funds in last month’s Autumn Statement to improve fibre broadband and develop 5G.