Five questions answered on report criticising the government’s rural broadband rollout plans

We were promised super-fast broadband - where is it?

The National Audit Office has raised concerns over the government’s delayed roll out of superfast rural broadband. We answer five questions on the report.

What are they key criticisms of the report?

Mostly that the scheme is two years behind its original schedule. Only nine out 44 rural areas are expected to reach targets for high superfast internet by 2015, with another four potentially missing an extended 2017 deadline.

The office is also concerned that BT would be the only firm likely to win contracts and thus benefit from £1.2bn of public funds as a result. It also raises concerns over the government’s ability to negotiate fair contracts with BT.

If the scheme is delayed does the report think it will cost the taxpayer more?

Yes.

Originally Culture Secretary Jeremy Hunt pledged to have internet speeds above 24 megabits per second available to 90 per cent of premises in every local authority of the UK by May 2015 for £530m, plus funds added by local councils.

Last week the treasury revised its plans, stating that it wanted 95 per cent of UK properties with access to superfast broadband by the end of 2017, and pledged another £250m more to meet this goal.

The report states that the: "government is not strong at taking remedial action to guard against further slippage".

There have also been claims that the Department for Culture Media and Sport (DCMS) does not have a proper grip on the programme and that BT is being unclear about costs.

What are other people saying?

Labour MP Margaret Hodge, who is the chair of Parliament's Public Accounts Committee, speaking to the BBC said: "Opaque data and limited benchmarks for comparison means the department has no idea if BT is being reasonable or adding in big mark ups.”

What has the DCMS said?

"We agree that effective enforcement of the contracts is important and are working with local authorities to ensure this," a spokesperson told the BBC.

"As the NAO report makes clear, the project's funding model greatly reduced the cost and financial risk to the taxpayer."

What has BT said?

"There was strong competition when prices were set at the start of the process and that has ensured counties have benefited from the best possible terms," the company told the BBC.

"Deploying fibre broadband is an expensive long-term business and so it was no surprise that others dropped out as the going got tough."

However, the report states that there had already been one instance where the company had been caught overcharging the government for management costs of £3m. It also pointed out that some of BT’s figures are largely based on assumption.

Fibre-optic cables - the tools of the trade. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.