Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Accepted
Shared Rural Network programme faces significant cost challenges, exceeding government funding levels.
Conclusion
Both the Department and BDUK acknowledged that there have been significant cost challenges on the programme.15 On the Extended Area Service element of the programme, 7 C&AG’s Report, paras 7, 2.5 and 2.6 8 C&AG’s Report, paras 3 and 15; Department for Science, Innovation & Technology UK Wireless Infrastructure Strategy April 2023 9 C&AG’s Report, para 6 10 Qq 2, 4 11 Q 3; C&AG’s Report, para 3.8 12 Qq 2–3 13 Qq 4 14 Digital Mobile Spectrum Limited (SMC0002) 15 Q 25 Supporting mobile connectivity 11 the Government’s costs have risen by an estimated £44 million due to irrecoverable VAT and inflation, while, on the Total Not Spot element, in late 2023, DMSL indicated that delivery of the planned number of sites and the increase in coverage required from this element was set to exceed the current level of associated government funding.16
Government Response Summary
The government states that the 95% coverage target is on track to be met within budget, highlighting that the SRN grant structure caps government financial contribution for Total Not Spots, and BDUK is working to achieve maximum benefit within existing Extended Area Service funding.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2024 1.2 Deployment progress from the Office of Communication (Ofcom) show UK geographic coverage from at least one mobile network operator (MNO) is making excellent progress since Building Digital UK (BDUK) reported to the committee in April, with indications that the overarching 95% coverage target will be met ahead of schedule and within budget. 1.3 The Shared Rural Network’s (SRN’s) Grant Agreement structure moves the majority of the financial risk for delivery outside government. Using a capped grant fund for the Total Not Spot (TNS) element of the programme ensures the government’s financial contribution cannot exceed £300.7 million over the programme. MNOs must remain within this grant envelope or use their own funds to deliver their 1% coverage target. 1.4 For the Extended Area Service (EAS) project, delivered with the Home Office, BDUK is working closely with its partners to ensure that maximal benefit can be achieved within the allotted programme funding. 1.5 SRN is technology neutral. If technology can meet the Department for Science and Innovation and Technology’s (the department’s or DSIT’s) minimum speed requirements within the terms of the grant agreement, it will be eligible for subsidy. The programme delivers to Ofcom’s standard of ‘good network service’ with speeds of at least two megabits per second (Mbps), though speeds of at least six Mbps are expected in most of the network’s footprint. In all cases, the government’s delivery partners have the freedom to choose the best technologies to deliver their targets with while maintaining value for money.