Government failed at promoting competition over BDUK, say MPs

The government has consistently failed to promote competition during the roll-out of rural broadband across the UK, according to the PAC.

The government has continued to fail at promoting competition during the roll-out of rural broadband across the UK, according to the influential Public Accounts Committee (PAC).

Margaret Hodge MP, chair of the PAC, said: “The government has failed to deliver meaningful competition in the procurement of its £1.2bn rural broadband programme, leaving BT effectively in a monopoly position.”

The Broadband Delivery UK (BDUK) programme was launched to help rural areas of the UK to get broadband by 2017. These are areas where commercial broadband infrastructure providers currently have no plans to invest.

“Since our hearing in July last year, when 26 of the 44 contracts to deliver this were with BT, all remaining contracts have now also gone to BT,” said Hodge. “Despite our warnings last September, the Department for Culture, Media and Sport [DCMS] has allowed poor cost transparency and the lack of detailed broadband roll-out plans to create conditions whereby alternative suppliers may be crowded out.”

The PAC today published a follow-up report on the rural broadband programme. The committee received a response from the government to its previous report in September 2013, but it said the DCMS had “failed to engage constructively with our conclusions and recommendations”.

The committee recalled the DCMS and BT to give further evidence in January 2014, and its conclusions were published today.

Hodge added: “While BT claims it is making further concessions, this is not impacting on rural communities. Local authorities are still contractually prevented from sharing information to see if they are securing the best terms for the public money they spend.”

Unable to access data

Smaller, local broadband providers have faced difficulties over the BDUK roll-out because they are unable to access the detailed data needed to understand which geographical areas BT’s scheme will cover.

“Other broadband providers might be squeezed out of the rural market by BT’s actions,” said Hodge.

She also said BT’s monopoly position should have been a “red flag” for the DCMS. Also, the lack of transparency on cost resulting from the supplier’s non-disclosure agreements is “exploiting its monopoly position to the detriment of the taxpayer, local authorities and those seeking to access high-speed broadband in rural areas”, she said.

Hodge said there was a lack of communication over the BDUK roll-outs: the PAC was told by Cumbria County Council that BT was not letting it release detailed roll-out information, but the DCMS thought the council was allowed to publish the data.

The committee has called for the DCMS to work with local councils urgently to publish detailed mapping of implementation plans, including full postcode details.

“The department should collect, analyse and publish data on deployment costs in the current programme, to inform its consideration of bids from suppliers under the next round of funding,” said Hodge. “And before that next round of funding is released, the department should work with local authorities to ensure there is real competition and value for money.

“If we don’t hear that the department is making significant progress on our recommendations, we will require a further hearing to find out why it is not improving its approach to protecting public funds.”

DCMS said it strongly disagrees that its existing approach failed to deliver value for money or meaningful competition.

“Contrary to what the Public Accounts Committee (PAC) would have the public believe, the government’s nationwide roll-out of superfast broadband represents tremendous value for money," said communications minister Ed Vaizey. 

"Not only is the programme ahead of schedule, but the competitive procurement process and robust checks and balances in place have delivered a project that is set to deliver £20 benefit for each £1 of public money invested. Clearly the PAC has an important role to play, but as we approach the milestone of connecting 500,000 homes under our programme, and overtake Germany in terms of broadband connectivity, people would be forgiven for thinking this latest outburst from the PAC has completely missed the point.”

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