How and why BDUK turned gold into dross and stuffed DCMS

My recent blog “Has BDUK stuffed DCMS” struck a chord. My attention was drawn to the “Freedom of Information Act” request by Ian Grant . Five months on and the details of who was paid to advise BDUK on its framework contracts have not yet been provided. More recently,  the FoI request from Bill Lewis goes to the heart of the problem by directly calling in question the understanding those advisors have with regard to state aid rules – with a specific example. Meanwhile that paid by Westminster and Kensington councils for technical and legal advice on their recent deal with O2 would probably not have bought a fortnight from one of the Pinsent Mason lawyers or KPMG procurement process consultants retained to advise BDUK.

The careful wording of the initial reply to Ian Grant’s FoI request may be because, to save time, BDUK did not go out to tender for advice. Instead it appears to have used consultants retained under an Infrastructure UK contract. This is said by some to be the cause of their problems. I disagree. I believe the problem goes deeper. It is symptomatic of the widespread belief that Whitehall, advised by the most expensive lawyers and consultants it can buy, will know best. BDUK is not the first, and will not be the last, agency to be stuffed and to stuff its department and its department’s ministers in consequence.

Broadband is an integral part of the national infrastucture. There is a good case for merging BDUK and Infrastructure UK (along with the relevant parts of Ofcom, Ofgem, OfWat et al and of DCMS and DECC!). Those retained by Infrastructure UK for expertise in private sector procurement processes are, however, most unlikely to have an understanding of the state aid and public sector procurement rules akin to that possessed by local councils and their advisors, who have had to live with these for their entire careers.

Hence the conflicts and mud-slinging over attempts to impose ill-thought (and possibly even illegal) national frameworks and processes on better (and more cheaply) advised local authorities. I will leave aside the additonal problems said to arise from the consultants’ lack of understanding of how traditional, let alone modern, communications networks operate.

I am told there may now be attempts to blame the consequent delays with spending the £100 million allocated for City centre broadband projects on Brussells. The problem is, however, that funding which could have been legitimately supplied in support of job creation, economic regeneration or social inclusion projects (which happened to require the provision of ubiquitous and affordable broadband to the target area) has been turned into a multi-level bureaucratic nighmare with attempts to second guess markets and technologies.   

It is a sad example of how a sensible high level policy can be turned into “a scandal in the making” when Central Government tries to tell Local Government “how to …” rather than “what to …”

Luckily this is not a case where the doctrine of ministerial infallibity could or should be cited to defend the indefensible. Ministers have never said how the funding allocation processes, let alone the subsequent procurements should be done. It is not too late for them to order a radical simplification – and leave local authorities to get on with the job – asking the National Audit Office (or who-ever will take over the job from the Audit Commission) to check that they followed the law and got value for money.

There is, however, a much wider lesson. The recent haemorrhage of talent and expertise from Whitehall greatly increases the risk of central diktat over-riding local common sense.  That is not to say “Town Hall good, Whitehall bad”. It is, however, rather easier to take corrective action when a Local Authority makes a hash of things – or at least it used to be – before the Audit Commission lost its way under the last Government.  

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