Local Authorities Start Planning How To Spend £129m BT BDUK Refund

Local authorities are already starting to make plans on how to spend some of the £129 million in Broadband Delivery UK (BDUK) funding BT has promised to return now that fibre adoption rates are predicted to be higher than first expected.

BT, which has won the vast majority of government funding available from BDUK, has ‘gain share’ clauses in the contracts with local councils that state if expected adoption rates exceed the 20 percent stated in BT’s original business case, it would return the funding or reinvest it into infrastructure.

The anticipated adoption rate has now increased to 30 percent – two percent more than what BT expects in non-BDUK areas – while BDUK has connected three million homes.

BDUK extra funding

The £410 million Digital Scotland project is to receive £17.8 million from BT, while Cumbria is getting £2.5 million. In Cambridgeshire, where adoption is 24 percent, an additional £5.3 million has been obtained to expand further. Suffolk has received £3.9 million and Norfolk has gained an extra £5.3 million.

“This extra money means we will be able to bring high-speed broadband to a significantly greater number of rural homes and businesses in Norfolk,” said Marie Strong at Norfolk County Council.

“An extra £5.3 million will be a great help and, by the time the project finishes, should mean that broadband inequality in the county is virtually eliminated.”

BT says it will work with local authorities to identify where further expansion can occur.

The government is aiming for 95 percent coverage by 2017 and wants to reach the entire of the UK by the end of parliament, using ‘alternative’ technologies like satellite and LTE to connect the ‘final five’ percent not covered by existing projects.

However, it is unclear where the funding will come from at a time when Chancellor George Osborne is imposing costs across government. BDUK was partly funded by ‘top-slicing’ the BBC licence fee, but this practice will end as part of a new deal with the corporation. It has been suggested that a ‘broadband levy’ will be imposed on the communications industry, but this is likely to be met with resistance.

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