New report wonders if £ 35million broadband projects in Northern Ireland have paid off
The report found that one of the programs, which was supposed to provide broadband to 117,600 premises, actually improved access to only 37,500 premises.
Northern Ireland Controller and Auditor Kieran Donnelly reviewed two projects funded by the Stormont Department of Economics, the Northern Ireland Broadband Investment Program (NIBIP) and the Superfast Rollout Program (SRP2).
Both projects have increased broadband connectivity at premises in Northern Ireland.
The report noted that broadband access, at speeds of up to 30 Mbps, is lower in Northern Ireland than in any other part of the UK, especially in rural areas.
The Department of the Economy awarded the NIBIP and SRP2 contracts using a national framework established by the UK Department for Digital Culture, Media and Sport (DCMS).
The report states that this framework provides a mechanism for local bodies to award contracts through competitive bidding and thus avoid costly, individual, individual tenders.
But Mr Donnelly’s report raised concerns that by the time the Northern Ireland contracts were awarded there was only one bidder (BT) left on the framework.
He also expressed concern that relying on the contractor to certify himself that the costs were “internal and consistent with his business investment” was not an adequate control.
The report states that the performance of the NIBIP program fell far short of the Ministry of Economy’s initial expectations of providing broadband to 117,600 premises and, in fact, only ended up improving broadband access in 37,500 premises.
Mr Donnelly said: “The Covid-19 pandemic has highlighted our growing reliance on the internet to communicate, work, learn and shop.
“Many in Northern Ireland have faced lockdowns from Covid-19 with inadequate access to broadband services, and while any improvement in broadband infrastructure is welcome, my report raises important issues.”
He added: “The results of the NIBIP were considerably lower than the initial expectations of the DfE and were disappointing in terms of the number of premises with improved broadband access.
“The report is in line with the findings of previous parliamentary committees that use of the national DCMS framework has seriously limited competition and provided insufficient transparency on the actual costs incurred by the contractor.”
The Audit Office report also noted that the adoption rate for improved broadband was significantly higher than initially expected.
The report states that BT had estimated that around 20% of customers would access and pay for improved broadband, but actual adoption has reached 66% for NIBIP and currently stands at 33% for SRP2.
Both programs include a mechanism for Stormont’s department to recoup excess profits due to a higher than expected take-up and it is estimated that around £ 14million will ultimately be recovered from BT.
But the report suggests that the high participation rates raise questions about whether either project could have been commercially viable with significantly lower public subsidies.
Mr Donnelly added: “Although I note that there are mechanisms to recoup some of the public funding, I consider that these high participation rates could indicate that the two projects would have been financially attractive to the private sector even if less. of public subsidies had been provided.