Superfast internet will now reach 95% of population by 2017 – 1.4m more homes than originally intended, but two years later than promised
The government has abandoned its target of rolling out superfast broadband to 90% of the population by 2015, in a move that leaves 5m households waiting a further four years for a basic high-speed internet service.
Despite promising to ignore short-term pressures when setting out infrastructure plans, the chief secretary to the Treasury, Danny Alexander, on Thursday reset the target for bringing rural Britain into the digital age.
Superfast internet will now reach 95% of the population by 2017 – 1.4m more homes than originally intended, but two years later than promised. Labour also claimed that the budget for connecting the most isolated homes had been cut by £50m. Superfast broadband is accessible to nearly two-thirds of the UK currently, but government support is needed to reach the final third in difficult-to-reach parts of the UK where telecoms operators will struggle to make a profit on their investment.
The project, first announced in December 2010, will have taken up to seven years to complete. For the final 5%, Alexander said the government would "work closely with industry to ensure that at least 99% have access to superfast broadband" by 2018, whether through fixed or wireless networks, or 4G mobile phone masts. The delay means four more years in limbo for the 5m homes that cannot currently get basic broadband, hampering home working and access to taxpayer-funded services such as BBC iPlayer.
The public money spent on broadband is just a fraction of the more than £40bn in taxpayer funds committed to high-speed rail. A total of £1.2bn has been earmarked so far from central and local government budgets, and Alexander has now committed a further £250m.
However, this is less than the £300m – from BBC licence fee savings – originally earmarked for the second wave of digital investment in 2010. Labour claimed this meant the original commitment had been cut by £50m, while a government spokeswoman said the remaining money was still in the pot.
"This is the third time the government has moved the goalposts," said the shadow minister for media and communications Helen Goodman. "They are trying to make it look like a golden fleece, when they've made a pig's ear."
The coalition's record on building Britain's digital infrastructure took a hit earlier this week, when George Osborne's project to spend £150m building high-speed fibre networks in "super-connected cities" was torn up and replaced with a voucher scheme for small businesses.
Alexander gave no update on a widely trailed reorganisation of Broadband Delivery UK (BDUK), the team of civil servants charged with commissioning companies to build rural networks. BDUK has been widely criticised for handing all the contracts to BT, while hampering the efforts of smaller broadband companies to invest in community networks.
Further delays were caused when the European commission took time to approve the process, amid fears it would simply extend BT's monopoly.
There have been suggestions the BDUK team could be reorganised along the lines of Locog, the 2012 Olympic organising committee, which was set up as a private company, hired staff with private-sector expertise and took advice from business leaders.
Locog's chief executive, Lord Deighton, has been tasked with speeding up the delivery of infrastructure projects. The report published on Thursday stated that BDUK "will be given greater operational freedom and an enhanced delivery focus, and will be equipped with the commercial skills it needs to deliver a broadband programme that will now extend to at least 2017".
Dana Tobak, managing director of the fibre internet company Hyperoptic, called for a shakeup of the rural broadband process. She said: "The government's indication that it will work more closely with industry to innovate in this area is a step in the right direction, but will certainly require looking beyond just the dominant industry players and the same old solutions."