£830m bid to give UK the best broadband in Europe

An action plan entitled Britain's Superfast Broadband Future, published by Culture Secretary Jeremy Hunt, sets out the ambition to create a "digital hub" in every community in the country by the end of this Parliament.

Linked to the nearest exchange by high-speed connections, the hubs would allow communities to extend the internet network to every home.

Mr Hunt said the plan was aimed at stimulating private sector investment and cutting barriers to business investment in the reliable and secure superfast network which ministers regard as vital to the UK's economic growth.

Ministers will invest 50m in a second wave of pilot projects to test how digital hubs can be extended to all communities, including those in remote rural areas.

And there will be moves to cut the costs of access to communications infrastructure and new awards of 800MHz and 2.6GHz spectrum to allow the development of next-generation mobile services.

Already, more than 70 per cent of UK households have broadband and nearly 5 0per cent have access to a superfast 50 Mbps service.

Mr Hunt said: "A superfast network will be the foundation for a new economic dynamism, creating hundreds of thousands of jobs and adding billions to our GDP.

"But it is not just about the economy. Around the world there are countless examples of superfast broadband helping to build a fairer and more prosperous society, and to transform the relationship between government and citizens.

"And shifting government services online will save billions of pounds of taxpayers' money.

"We want the UK to have the best broadband system in Europe by 2015. Our strategy, backed by a 830m Government investment, will help deliver that by stimulating private investment and competition."

Rural Affairs Secretary Caroline Spelman said that rolling out superfast broadband to the countryside was "probably the single most important thing we can do to ensure the sustainability of our rural communities in the 21st Century".

She added: "Reliable internet access is vital for business and education and will help to promote social inclusion and improve life in rural areas right across the country."

The announcement came shortly after BT announced it was ready to contribute further funding if it won public money in any of the Government's tenders for work to bring fibre-optic cables to remote areas.

Mr Hunt said the development could see superfast broadband brought to 90 per cent of the population.

The Communication Workers' Union warned that the UK would fall behind the rest of Europe unless broadband funding and rollout was increased.

General secretary Billy Hayes said: "While the backing for superfast broadband is welcome, the Government is still failing to match Labour's commitment on funding of a dedicated 1.2 billion next generation fund in addition to other money.

"This government is raiding the BBC licence fee to top up broadband funding and relying on private investment and competition to make up the shortfall. While BT has taken up the mantle, there is no guarantee other providers will do the same.

"We believe that 830m over the course of two parliaments is too little funding over too long a period. It falls far short of investment by other European countries."

In South Yorkshire, a scheme aimed at delivering the latest internet technology to homes and businesses has been hit by problems.

The South Yorkshire Digital Region project was set up as a pilot, announced in the 2009 budget and will use a 250 mile network of fibre optic cables to deliver better performance. But the scheme has so far failed to attract any of the large internet fims which would sell super-fast access to households and is now a year on from its intended date to go live.

The project is funded by millions of pounds in loans funded by the taxpayer and the scheme needs to succeed to safeguard that money,