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BROADBAND will SAVE THE ECONOMY, shriek UK.gov bods

Superfast network rollout will give us £20 for every quid spent, apparently

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The government claimed today that a £1.2bn investment of taxpayer money in the deployment of fast broadband networks would return £20 for every £1 spent from the public purse.

Secretary of State for Culture, Media and Sport Maria Miller has come under fire in recent months. The Broadband Delivery UK contracts looked set to fall into the clutches of one-time national telco BT - the only preferred bidder left in the procurement process, after Fujitsu gave up the chase earlier this year.

A £530m pot of cash was set aside by Whitehall during this Parliament to fund the network rollout. Local authorities are expected to match that funding, with another £250m to be pumped into the project beyond 2015.

Recently, the government's spending watchdog attacked the DCMS over its crashingly expensive rural broadband deployment project for failing to demonstrate that it represents value for money to Britain's taxpayers.

The investment was secured from the Treasury because there were parts of the UK where BT and Virgin Media could not make a compelling business case to privately fund a rollout of faster broadband connections.

Since then, BT has gobbled up every contract it has bid for in the BDUK framework.

Rivals have savaged the project, claiming it was anti-competitive and with terms that were too restrictive for smaller players to get a look in.

MPs on the Public Accounts Committee have also berated Miller's department for aiding what they described as BT's "quasi-monopoly position".

The government, perhaps keen to cut through all the negative press, commissioned its UK Broadband Impact Study – Impact Report in what appears to be a vain attempt to search for some good news about BDUK.

Thus, we are told by analysts at SQW:

Over our modelling period (to 2024), these interventions are projected to return approximately £20 in net economic impact for every £1 of public investment.

This is an unusually high level of return for public funding, but we consider it to be realistic, given that broadband is a General Purpose Technology which has an increasingly critical role in the day-to-day operations of the majority of UK businesses.

The government’s interventions are substantially improving the quality of this technology across a significant proportion of the UK, which, in the long term, will benefit hundreds of thousands of businesses, employing millions of people.

It goes on, trumpeting the supposed creation of 11,000 jobs in 2014 alone, and claiming household savings of £45m a year by 2024 - courtesy of more people being able to work from home.

The report insisted that country bumpkins would eventually benefit the most from the public investment.

Miller chimed in:

Our broadband rollout is one of the best in Europe with almost three quarters of the UK able to access superfast speeds. This is making a real difference to people in communities across the UK from small businesses able to expand, school children being able to log on to do their homework or people being able to work from home.

This investment in technology is vital for our future and will help Britain continue to compete in the global race and improve the way we live and work.

The study, however, admitted that its report was peppered with "gaps in the empirical evidence base". One might therefore prefer to consider it to be Miller's moon on a stick. ®

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