UK - NAO report forecasts 2-year delay on rural broadband availability, BT is sole supplier and costs are not transparent to HMG

The National Audit Office (NAO) has published a report on a government initiative to improve access to broadband in rural areas:

A government programme to make superfast broadband available to 90 per cent of premises in each area of the UK is currently expected to be delivered nearly two years later than initially planned, the National Audit Office has reported.

The design of the competitive framework had the advantages of ensuring affordability and transferring risk but, together with State aid conditions and other commercial factors, led to potential suppliers withdrawing from the bidding process. BT was left as the only active participant in the framework and is likely to win all 44 local projects.

In addition, the Department has secured only limited transparency over the costs in BT’s bids. It does not have strong assurance that costs, take-up assumptions and the extent of contingency contained in BT’s bids are reasonable.

The project funding contributed by BT has so far been lower than originally modelled – the Department now expects the company to provide just 23 per cent of the overall projected funding of £1.5 billion, some £207 million less than it modelled in 2011. At the same time, by the end of the programme, BT is likely to have benefited from £1.2 billion of public money.