Villages miss out on broadband cash through ‘absurd’ fund rules

A report published today by the House of Lords communications committee attacks the Government’s “flawed” Rural Community Broadband Fund and calls for it to be replaced with a “more coherent mechanism” to bring faster internet speeds to remote areas.

The committee, which includes the Chancellor of Leeds University, Labour peer and broadcaster Lord Bragg, warns Ministers have “misjudged” a strategy for improving internet access and sets out an alternative vision based around the installation of an accessible broadband ‘hub’ in every community. Such an idea was set out by David Cameron in 2010, but the report warns this vision has since been allowed to “drift”.

“The Government’s strategy lacks just that – strategy,” said committee chairman Lord Inglewood. “The complex issues involved were not thought through from first principle, and it is far from clear that the Government’s policy will deliver the broadband infrastructure that we need for the decades to come.”

The coalition has set aside £540m to improve internet services in more remote areas which are unlikely to receive significant investment from private firms such as BT or Virgin.

North Yorkshire has been the first beneficiary of that fund, named as one of four pilot areas and signing a contract earlier this month to construct an improved broadband network.

The Government wants every property in the country to have a minimum internet connection of 2Mbps by 2015 and most to have access to so-called “superfast” broadband, with speeds of at least 25Mbps.

But the Lords committee warns the Government has become “preoccupied by speed” and should instead be working to close the so-called “digital divide” caused by the huge disparities in access across the country.

Rural areas have long suffered from a lack of communications infrastructure, and the Department for Environment, Food and Rural Affairs (Defra) set up its £20m broadband fund for countryside communities last year.

So far not a penny of the money has been spent, and the new report savages the “absurd” process which means community projects bidding for a share of the fund must first find all the money themselves and implement their project before claiming back the cash at a later date.

“Problems with the fund are startling,” the report warns. “In our view, it is ludicrous to expect all remote communities to be able to provide the levels of funding required to build broadband access networks in their areas. While there may be some which can, inevitably others will not be able to do so.”

A Defra spokeswoman said EU funding rules were to blame for the way the fund operates.

But the report states: “Whether the stipulation derives from a Europe-wide policy or is one of the Government’s own making... does not alter the absurdity of its assumptions, which must be resolved. We urge the Government to provide a more coherent mechanism for the provision of enhanced broadband infrastructure. A new mechanism for distributing funds must meet the criticism that its predecessor was flawed in assuming all communities have the capital required, up front, to invest in their own access network.”

Defra said it has received 85 expressions of interest from community projects for funding, of which 16 have so far been encouraged to return with a full application. One is in Yorkshire in the Dales village of Austwick.

Communities have to raise half of the costs to ensure limited public funds are spread across as many areas as possible.

A Defra spokeswoman added: “Rural communities will not be expected to pay for the setting up of their broadband network until their application has been fully approved and their grant funding has been guaranteed.”