Public Accounts Committee slates Rural Broadband programme

The cross party Public Accounts Committee of the House of Commons today published a damming assessment of the Government’s Rural Broadband programme, which is designed to suposedly ensure that 90% of rural areas will have superfast broadband.

In my blog post on the 1st September I pointed out some of the weaknesses of the Rural Broadband initiative, with BT winning all of the contracts awarded; and now being the sole bidder taking part the fact that they would win all remaining contracts to be awarded.

Today’s PAC Report makes grim reading for the Government. The Committee believe that ‘the Department for Culture, Media and Sports design of the rural broaband programme has…failed to deliver the intended competition for contracts, with the result that BT has strengthened its already strong position in the market. The Department accepted contract terms that were overly generous to BT and do not promote value for money, such as confidentiality clauses over bid costs and roll-out plans. The Department also failed to negotiate full access it needed to BT’s cost information to validate that bids from BT for local projects were reasonably priced.’

Margaret Hodge, Chair of the Committee bluntly believes that, ‘The taxpayer has been ripped off with £1.2 billion going to the shareholders of BT.’

The Committee recommend that the Department for Culture, Media and Sport should not spend any more public money on the project until it has developed ways to achieve proper competition. It also recommends that there needs to be higher standards of cost transparency before contacting, and that BT’s roll-out plans should be published in order that other suppliers can seek to provide superfast broadband to the 10% of the country that will still be without it. The Committee also considers that the regulatory body, Ofcom, need to adress the impact on competition of BT’s wholesale pricing structure and of the terms and conditions that are attached to accessing BT’s infrastructure.

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