Central Government funding
Superfast broadband is a high priority for the Government. Superfast broadband supports business growth and local job creation, particularly in rural areas, and makes it easier for people to get into work by allowing more flexible working patterns.
It also enables people to gain access to health and social care in their homes and provides new opportunities for access to education. People can keep in touch with family and friends more readily and have access to a wide range of entertainment.
Currently superfast broadband (giving access to download speeds of more than 24Mbps, which cannot be delivered through previous generation broadband technology) is available to more than 80% of UK premises. This has been delivered through commercially-funded networks via the private sector, together with publicly-funded projects to extend coverage to areas which the commercial coverage will not otherwise reach.
The programme is managed by Broadband Delivery UK (BDUK), part of the Department for Culture, Media and Sport (DCMS).
Superfast Swindon project
In June 2014, Swindon Borough Council agreed to take part in the Superfast Broadband Extension Programme. A total of £1.78m was made available as the Council’s financial contribution, with the remaining funding coming from BDUK (£1.5m) and the private sector partner.
Details of the public consultation process are also available.
Wider Superfast Broadband coverage across the Borough will contribute directly to the Council’s priority to secure, “right skills, right jobs in the right places” and offer the potential to develop innovative technical solutions that would help achieve the priorities to “together, find new ways to reduce vulnerability and improve health for all” and “work with people and families to help them fulfil their potential.
Click here to read the Swindon Borough Council Cabinet report on the decision to award the Superfast Broadband contract.
Why is public funding being used to extend superfast broadband coverage?
A range of commercial networks exist in many parts of the UK, offering a range of broadband products and speeds. Typically these networks cover urban areas, where there are sufficient potential customers to justify commercial investment in the networks.
However, big network gaps exist primarily in rural areas, where the relatively high cost of installations together with the relatively small number of potential customers does not offer an attractive commercial return.
The Government has decided that the economic benefits for the UK of having much greater Superfast Broadband coverage justify public investment to either extend existing or develop new broadband networks.
Procurement route to identify the preferred supplier
In order to qualify for the BDUK funding, the Council had to follow a formal procurement process where any provider could put forward a proposal.
An OJEU open procurement process was undertaken to identify the best value for money solution that would secure the greatest possible coverage across the Borough within the funding available.
The Council contacted all current network providers in the Borough to draw their attention to the opportunity being offered through its arrangement with BDUK.
The alternative would have been to consider a restricted framework developed by BDUK. This was rejected due to national and local concerns about evidencing value for money, given that BT has been the only provider to win work through the BDUK framework. – do we need this?
Through the procurement process the Council set out:
- how much public money was available,
- the BDUK requirement for at least 24Mbps speeds to qualify for funding,
- the requirement for coverage of at least 95% of households in the Borough
- Given that the level of funding and minimum quality of service were already established, the main evaluation criteria was the number of premises that would be covered.
BDUK had to give approval to any technical solution before confirming it would qualify for its grant funding.
Following publication of the required OJEU procurement notice by the Council on 30th October 2014, 13 organisations initially expressed an interest in the scheme. Of those, 8 returned a non-disclosure agreement giving them access to the tender documents.
- Official Journal of the European Union prior information notice
- Official Journal of the European Union contract notice
UKB Networks were the only supplier to submit a proposal and following a detailed evaluation process were awarded the contract to build a network that will increase Superfast Broadband coverage to 99.4% of households in the borough of Swindon by 2016.
The key benefits of the UKB Networks proposal are:
- Meets all state aid and BDUK requirements
- Delivers very high coverage (99.4% Superfast Broadband)
- Only uses £1.9m of public funding available (£950k Swindon Borough Council and £950k BDUK)
- Includes a 5 year network refresh so that customers can utilise the latest technology advances
- Can be rolled out across the Borough by mid-2016, with limited disruption to highways infrastructure
- The contract is based on the supplier achieving defined outcome targets, meaning that any risk around increased costs sits with the supplier
If you require any further information with respect to the Contract please complete a Freedom of Information request on the Swindon Borough Council website.
Who are UKB Networks?
UKB Networks is a sister company to UK Broadband that offers wireless broadband services to businesses and homes in parts of Swindon and central London under the name Relish. UKB Networks is a UK company wholly owned by Hong Kong Telecoms (HKT), the largest operator of fixed and mobile services in Hong Kong.
Will the public sector investment be repaid?
Under BDUK rules there is no requirement to repay either the Government or Swindon Borough Council grant funding. UKB Networks has modeled its revenues for this project over its lifecycle. If the revenues are higher than anticipated due to high levels of demand, the Swindon Council will receive a portion of its investment back as per the agreement.
Why isn’t there a fibre solution?
BDUK has acknowledged that in order to achieve the Government’s aim of delivering 100% Superfast Broadband coverage across the UK, it will be impossible to secure a full fibre solution for all areas of the UK. More cost effective alternatives technologies, such as wireless 4G LTE, are now also being used to meet the UK’s ambitious plan.
In accordance with state-aid rules, Swindon Borough Council could not specify a particular technology solution and the one bid received was for a 4G LTE wireless solution.
How is all this different to Digital City?
Digital City was a local initiative that established a joint venture in which the Council held a stake. In this project Swindon Borough Council is providing joint funding with the Government but will not own or run any part of this network.
UKB Networks are not associated with Digital City.
Have lessons been learnt from Digital City?
Yes. The council has run a full OJEU open procurement exercise to get the best offer possible. The Council has a contract which contains protected terms and it will have a parent company guarantee from a large multi-national organisation to underwrite performance.
BDUK has investigated and approved the proposed technical solution. The Council has undertaken an independent technical and project assessment implementation plan to make sure the programme runs to time.