Taxpayer-backed Digital Region project loses £14m over 12 months

The latest accounts for Digital Region Ltd also show exceptional costs of £62.9m reflecting the potential loss in the value of the company’s assets if a new operator cannot be found and the superfast broadband network is broken up.

Last night Digital Region insisted the hunt for a company to take over day-to-day control of the business is “on track” with 29 expressions of interest whittled down to two.

Chief operating officer David Cowell said: “Whilst these financial results appear disappointing, they are in line with the forecasts for the business so this outcome is not unexpected.

“The intention remains to select a new operator that will ensure the network delivers on its original remit of digital transformation across the region, and provide quality and value for money for South Yorkshire residents and businesses.”

Digital Region began as an ambitious scheme, backed by a £27m EU grant and taxpayer-funded loans, to bring superfast broadband to South Yorkshire. But while a network of fibre cables has been laid over the past three years, it has struggled to attract customers.

The Yorkshire Post revealed last year that the four local authorities in South Yorkshire had been forced to put millions of pounds of extra investment into the project and write-off earlier loans.

A spokesperson for the four councils said superfast broadband was “vital” for the area, adding: “Like all such projects this has never been without risk and each of the four authorities, who form only a small shareholding in the company, and central government have always been mindful of the cost and have taken every step possible to protect taxpayers.”