dumps another £40m into unpopular SME broadband scheme

Only £7.5m of £100m available has been allocated

Seemingly flush with cash, the government is pouring an extra £40m into its SME broadband voucher scheme, despite the pitiful take up of the existing £100m initiative to date.

Plans to extend the scheme until March 2016, and to more cities, were outlined in the Treasury's 2014 National Infrastructure plan.

"Vouchers will be available on a 'first come, first served basis'," said Danny Alexander, Chief Secretary to the Treasury.

Under the scheme, businesses across 22 cities can apply for grants of up to £3,000 each to cover the costs of installing faster broadband. The deadline for sign-up was previously March next year.

However, in September the Financial Times reported that just £7.5m of the £100m available to subsidise business broadband in cities has been allocated.

The reason for sluggish uptake is thought to be poor connectivity, coupled with expensive high-speed leased lines.

In order to encourage SMEs to sign up to the scheme, the government has spent £2m on an advertising campaign.

The government's current broadband policy centres on a target of delivering bandwidth speeds of 24Mbps to 95 per cent of premises by 2017, and 2Mbps to the remaining five per cent.

In the view of the Federation of Small Businesses - which is campaigning for improved connectivity - this is not sufficiently ambitious. ®

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