Future of government broadband scheme in doubt as demand falls

A third of the UK's regional development agencies have pulled out of a government-sponsored broadband initiative for the public...

A third of the UK's regional development agencies have pulled out of a government-sponsored broadband initiative for the public sector and the rest are considering their position after the scheme attracted minimal demand.

The Department of Trade and Industry last year launched a three-year demand aggregation initiative to help the public sector strike cost-effective broadband deals with suppliers. It estimated that the scheme could generate up to £1bn in orders.

The UK's nine regional development agencies agreed to set up broadband aggregation boards in a scheme which was also aimed at making it cost effective for telecoms suppliers to roll out services to rural areas.

The DTI spent £15m setting up the scheme, but is now winding up its central broadband aggregation department. A DTI spokesman said the latest figures for business done through the scheme totalled £9m and resulted in savings of £8m to users - excluding the scheme's set-up costs.

The DTI said the development agencies were still considering whether to go ahead with broadband deals worth a total of £200m, but said there was no guarantee these would be signed.

A spokeswoman at BT, which is part of the scheme, said, "Activity has not been as great as originally expected." She said this was partly down to public sector organisations going directly to suppliers and the fact that broadband facillities were now more widely available.

Core business has not materialised

The three development agencies that have pulled out of the scheme are the South East, South West and the North West.  

A Northwest Regional Development Agency (NWDA) spokeswoman said, "This is because the core business originally envisaged from the NHS and the Department for Education and Skills has not materialised." 

A spokesman from the South West England Regional Development Agency said, "By summer 2005, nearly all people and businesses in the south west will have access to broadband services. With widespread availability now achieved, along with increased public-sector take-up, the board will be withdrawing from the promotion of public sector aggregation."  

The South East England Development Agency and the development agency for Yorkshire and Humberside said they were both considering whether to stay with the programme.

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