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Spending Review: Survival of rural broadband plans good news, say SMEs

Small business groups have welcomed the government's plans not to put super-fast broadband in rural areas on ice.

Small business groups have welcomed the government's plans not to put super-fast broadband in rural areas on ice.

Peter Scargill, national IT chairman at the Federation of Small Businesses, said, "Although taking the money from the BBC is not exactly new, the decision not to cut funding for rural broadband will be welcomed by the many thousands of rural businesses who currently do not have acceptable levels of broadband."

It is vital that broadband is available to all businesses who need it and this is a step in the right direction, he said. "Government support is vital to rural areas, where take-up levels may not make good business sense for commercial suppliers but where reliable connectivity is essential," he added.

Jane Bennett, campaign manager at the Forum of Private Business, agreed that this was important news for small businesses in rural areas, but said deep cuts in the public sector could have a serious effect on SMEs who rely on government contracts.

"Philip Green's recent report seemed to suggest that a more centralised procurement process could help the government to save money. But this could mean that smaller companies don't get a look in. For example, if computers for local government are bought through large corporations by central government rather than local councils using small PC businesses," she said.

However, Gayna Hart, managing director of software provider Quicksilva, is optimisitic that the spending review could create more opportunities for small suppliers.

The broadband announcement was made by chancellor George Osborne in the government's spending review. Deployment will go ahead in the Highlands & Islands, North Yorkshire, Cumbria and Herefordshire, with the projects funded by the BBC, which will contribute £530m to the plan over the next four years.

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