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Dozen more cities to get ultrafast broadband cash in gloomy UK budget

Osbo dreams of £1bn savings once UK.gov goes fully online

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Autumn Statement 2012 George Osborne promised 12 more UK cities £50m in funding to roll out ultrafast broadband during his mini-budget speech this lunchtime. He added that £1bn could be saved if public services were shifted online.

The chancellor admitted to Parliament that he had fallen short of his deficit and debt cutting targets, but insisted the British economy was slowly "healing". In his previous budget announcement, he estimated economic growth would reach 0.8 per cent, but instead it stands at -0.1 per cent.

Osborne cut corporation tax by one point to 21 per cent and said this meant "Britain was open for business" - even though it's clear big tech corporations such as Google and Facebook prefer to set up their European digs in Ireland and such places to minimise their tax bills and legally avoid HMRC's claws.

The thin-lipped occupant of Number 11, Downing Street, told the House of Commons that 12 more urban areas are earmarked for faster broadband networks, specifically locations where BT and Virgin Media haven't found a compelling case for private investment.

Roughly £50m will be shared out among York, Newport, Aberdeen, Perth, Londonderry, Brighton & Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth and Salford - with the allocation of funds subject to European approval of the state-funded aid.

The chancellor announced during his autumn statement in November 2011 that the government would take £100m from the £5bn national infrastructure investment pot over the course of this parliamentary term to boost broadband network speeds in selected areas.

He followed that up with another £50m slapped on 10 smaller cities to receive faster broadband access in his budget statement in March this year. However, that cash has now been extended to two more cities without extra funding from the Treasury.

Osborne, reading figures from the Office for Budget Responsibility to MPs today, admitted that the British "economy has performed less strongly than expected" and that problems in the Eurozone would "constrain growth for some years to come".

The chancellor previously claimed he would "rebalance the books by 2015", but he has now confessed that fixing the country's debt and deficit hangovers will take longer.

Osborne said:

Tougher economic conditions mean that while deficit is forecast to go on falling – it will take four years instead of three.

Meanwhile, the year in which national debt falls, relative to GDP, has been deferred by one year to 2016-17.

The chancellor claimed the coalition government was "confronting rather than ducking" the deficit problem, but it's clear that his mini-budget can be best summed up as rather gloomy indeed. Austerity appeared to be assured until at least 2018.

Despite the outlook, Osborne seemed convinced that the digerati can do its bit to help balance the books. He claimed: "If all departments made greater provision of digital services and properties, £1bn savings can be found." ®

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