South Yorkshire: Region ‘could miss out on web pot’

Mark Jackson, editor of the ISPreview.co.uk website, said despite the tens of millions of pounds ploughed in by councils, the project faces an “increasingly challenging future”.

In 2010 the Government announced it was setting aside £540m to distribute to councils to help to roll out improved internet services to more remote parts of the UK.

Last month North Yorkshire became the first council to receive money from the fund, and in a speech yesterday Culture Secretary Jeremy Hunt said the Government is on track to ensure Britain has “Europe’s fastest broadband” by 2015.

But because of the public money already spent on the Digital Region project, South Yorkshire’s councils will not receive a penny from the fund.

This leaves major questions unanswered about how the county will meet the Government’s two key targets – ensuring every home and business can access internet speeds of at least 2Mbs, and that 90 per cent can access “superfast” speeds of at least 25Mbs.

The superfast Digital Region scheme was originally supposed to reach 97 per cent of South Yorkshire’s homes and businesses, but that figure was scaled back to 80 per cent due to the project’s financial woes.

Among those voicing concerns, Mr Jackson said: “I fear this will be another case study in why politicians shouldn’t attempt to meddle in fields that they don’t fully understand.

“Digital Region has developed a network that cost a lot to build and is also now struggling to make money. It failed to attract any big name ISPs (internet service providers), didn’t advertise itself very well and now faces an increasingly challenging future.

“As a result South Yorkshire won’t benefit much, if at all, from the Government’s current broadband strategy, because the Digital Region project has already sucked up a sickening amount of public money.”

Earlier this year, Digital Region announced plans to end its contract with French construction firm Thales – which built the fibre network beneath the streets of South Yorkshire – and bring in a new private partner to put the project back on track.

Two firms are bidding to take over the running of the Digital Region network – BT and another French construction firm, Bouygues.

It is understood some of the huge taxpayer-funded bail-out will pay for the termination of Thales’s contract and an advertising budget to market the network.

Digital Region chief operating officer David Cowell said the plan was “moving forward very well.”

He added: “The tender process will identify a partner who can engage in a programme of demand stimulation that will maximise the reach and potential of the network.

“This will ensure businesses and residents in South Yorkshire continue to benefit from the best superfast broadband coverage in the UK whilst ensuring value for money for the taxpayer.”

Along with the four South Yorkshire councils – which own 50 per cent of the Digital Region scheme – future liabilities for the scheme also rest with the Government.

Yorkshire Forward’s 50 per cent share was transferred to the Department for Business Innovation and Skills (BIS) when the regional development agency was wound up earlier this year.

A BIS spokesman said: “All parties believe that a different model in Digital Region is the best way to help stimulate growth in South Yorkshire.”