UK to streamline business broadband subsidy scheme to boost uptake

22 Sep 2014

A GBP100 million (USD163 million) business broadband subsidy scheme is set to be overhauled by the government amid slow take-up. According to the Financial Times, just GBP7.5 million of the GBP100 million set aside to subsidise business broadband in cities has been allocated, with only six months of the scheme left to run.

As previously reported by CommsUpdate, in June 2013 it was announced that government plans to spend GBP150 million on broadband infrastructure to create 22 ‘super-connected cities’ had been scaled back following legal challenges. In its place it was revealed that funds would instead be distributed to small businesses in the form of vouchers, with these designed to pay for installation of faster broadband. The change in plan came after fixed line incumbent BT and cableco Virgin Media brought a legal complaint against the fixed line element of the original project, with both claiming it could benefit rival companies. Subsequently, the state said it had decided to scrap the funding scheme in its original form amid suggestions that it was facing a lengthy European Union (EU) investigation into State Aid infringements.

Now, following criticism the details of the voucher scheme were poorly communicated and not well understood by businesses, it is understood that the application process will be streamlined to help businesses secure funds. To support the project a GBP2 million advertising campaign will be conducted over the 22 cities where funds are available, while a number of providers will reportedly launch revised offers for businesses under the scheme. Ed Vaizey, Minister of State at the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills, was said to have rejected criticism that the scheme had struggled, however, saying simply that the proposed changes would bring a ‘step change and a change of gear’.