The Public Accounts Committee (PAC) has attacked the rural broadband rollout which intends to provide superfast broadband services to 90% of UK homes by 2015. The PAC claimed that BT has monopolised the contracts, and that the Department for Culture, Media and Sport designed the programme poorly. All 26 BDUK deals awarded so far have gone to BT, and it is likely to win the remaining 18.
According to the PAC “the department accepted contract terms that were overly generous to BT and do not promote value for money, such as confidentiality clauses over bid costs and roll-out plans. The Department also failed to negotiate the full access it needed to BT’s cost information to validate that bids from BT for local projects were reasonably priced; a key control over value for money on a programme where there is no competitive tension in individual procurements.”
PAC chairman Margaret Hodge said: “The sole provider, BT, has been placed in a quasi-monopolistic position which it is exploiting by restricting access to cost and roll-out information. The consumer is failing to get the benefits of healthy competition and BT will end up owning assets created from £1.2bn of public money. The department’s approach to procurement failed to deliver any meaningful competition to drive down prices and maximise coverage.”
The scheme has made multiple failings as costs have risen and targets have been revised. The scheme was also criticised for not being clear about what ‘superfast’ broadband would mean.
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