Government claws back £129m from BT as UK superfast broadband target looks set to be exceeded

Clawback clause invoked as take-up of FTTP/FTTC exceeds expectations, money to be used to fund other rollout plans

BT is to return up to £129m to local governments in a move that should help councils to expand the reach of superfast broadband.

Under a government scheme known as Broadband Delivery UK (BDUK), BT agreed that if a 20 per cent take-up was reached, a clawback mechanism would be activated and funds redirected to local authorities in order to help fund rollout to areas of the country BT cannot reach, or has no commercial interest in.

"It's fantastic to see that the rollout of superfast broadband is delivering for customers and for the taxpayer," said John Whittingdale, secretary of state for culture, media and sport in a statement released today.

"The government was clear from the start that as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would reimburse the taxpayer for reinvesting into further coverage across the UK. This now means that BT will be providing up to £129m cashback for some of the most hard-to-reach areas."

The Department of Culture, Media and Sport confirmed to Computing this morning that BT was effectively bankrolling much of the additional expansion of broadband itself, in a situation a spokesman described as a "win-win" for the government.

The £129m, the Department told us, will be split between other organisations that are rolling out broadband, such as Hyperoptic - a FTTP startup that is currently extending fast broadband across outlying suburbs of London.

However, a BT spokesperson later added that local councils are not confirmed to have "picked a route yet" in terms of reinvestment of the funds, and that "some may even choose not to spend it on broadband at all."

The Department of Culture, Media and Sport and BT both confirmed, however, that local authorities are still also free to choose BT for superfast broadband in their area, and suggested that many will do so.

According to Whittingdale, the superfast rollout is now on track to reach "at least 95 per cent" of the country by 2017.

Gavin Patterson, CEO of BT, expressed delight at being forced to give £129m back to the government.

"We are delighted to be able to share that [take-up] success by making up to £129m available to extend the rollout to more BDUK homes and businesses, earlier than planned and at no extra cost to the taxpayer.

"BT will work with local bodies over the coming months to identify where these funds can be provided early to enable the local bodies to invest in increased fibre coverage sooner than would previously have been the case."