BT battered by NAO report into rural broadband rollout

Rural broadband rollout is over budget and well behind schedule, claims NAO

BT has been criticised in a National Audit Office (NAO) report into the rural broadband rollout being overseen by Broadband Delivery UK (BDUK).

The NAO claims that the rollout of "superfast" broadband is now some two years behind schedule, with only nine out of 44 rural areas expected to hit the target for getting wired up by 2015.

Four further areas - Highlands and Islands, Cumbria, Norfolk and Suffolk - are also expected to miss a revised 2017 target.

The NAO also criticised BDUK, the public sector body overseeing the programme, because BT had emerged as the only company in line to win the subsidised contracts to finance the rollouts.

As a result, BT is receiving a subsidy of as much as £1.2bn from UK taxpayers, while a lack of competition means that it is difficult for local authorities to know whether BT's costing represent value for money or not.

"The rural broadband project is moving forward late and without the benefit of strong competition to protect public value," said auditor-general Amyas Morse.

Implicitly criticising the Department for Culture Media and Sport, he added: "For this we will have to rely on [the department's] active use of the controls it has negotiated and strong supervision by Ofcom."

The rural broadband rollout was kicked off in 2011 when the culture secretary at the time, Jeremy Hunt, announced that nine-tenths of premises in every local authority area in the UK ought to have access to internet speeds above 24 megabits per second (Mbps) by May 2015 - with a minimum of 2Mbps for other areas.

A total of £530m was pledged to subsidise the scheme. However, delays in getting approval from the European Union delayed the plan, which had to be revised, while a further £250m of taxpayers' money had to be pledged to help BDUK achieve the government's goals.

"Opaque data and limited benchmarks for comparison means the department has no idea if BT is being reasonable or adding in big mark-ups," said Margaret Hodge MP, chair of the Public Accounts Committee.

BT has hit back at the criticisms. In a statement, it said that the delays were nothing to do with BT, while claiming that the roll-outs represented good value for money. Furthermore, it has contributed substantial funds to support the roll out, it said.