Committee says Lessons can be Learnt from £165 Million Project Stratum
18 Mar 2022 03:23 PM
The Northern Ireland Assembly Public Accounts Committee (the Committee) recently (18 March 2022) published a report, entitled Broadband Investment in Northern Ireland. The report examines how the Department for the Economy implemented projects to support broadband investment in rural areas.
The Committee focussed on the 2020 £165 million Project Stratum, awarded to Fibrus, to improve broadband speeds in rural areas where it would not be commercially viable to do so.
The project was intended to provide a broadband speed of up to 30Mbps and built on work carried out in earlier projects from 2009, 2012 and 2015. During those years, the Department for the Economy invested £78 million in three initiatives to improve broadband provision across Northern Ireland.
Chairman of the Committee, William Humphrey MBE MLA said:
“The Committee welcomes the fact that Northern Ireland has some of the fastest urban broadband speeds, compared to Great Britain. At the same time, we are still concerned that many in rural areas do not enjoy the same service as their urban counterparts.
“Over the years, the Department for the Economy has committed large sums to redress this problem, the most recent in 2020, with Project Stratum. And while we are generally encouraged by this positive initiative, we have a number of concerns about how the project was awarded and whether it will achieve all of its stated goals.
“We are shocked that even after Project Stratum has completed its work, some two per cent of Northern Ireland households will have either no broadband or speeds of less than 2Mbps. This compares unfavourably with Great Britain where 100 per cent of premises have at least this basic provision.”
Another issue highlighted in the report was concerns over the scoring methodology used to award the contract for Project Stratum, believing it to be too simplistic. The report agrees with an earlier Northern Ireland Audit Office report that the criteria and scoring mechanism did not include contractor penalties, if the project failed to provide for all those requiring decent broadband speeds.
A further issue that disturbed the Committee was the omission of 8,500 premises from the original project. These included 2,500 hardest to reach premises, as well as a further 8,500 which were not originally deemed eligible. The problem occurred due to anomalies in the Department of Finance’s Land and Property Services (LPS) database. Only when Fibrus launched a postcode eligibility checker did this come to light and those properties were added to the investment programme.
Chairman Humphrey said: “While the eligible properties were eventually added to the investment schedule, we were surprised that LPS did not have the most up-to-date database. Perhaps in the future it might be better if information from the rating system was used and we believe better liaison with LPS would be beneficial.”
Finally, after Fibrus was awarded the contract for Project Stratum, BT announced that it was improving broadband to around 16,000 premises, properties that were included in the original project area. This could indicate that this part of the project was commercially viable, without the need for public investment.
Chairman Humphrey concluded:
“The issue of commercial viability is one that came up when looking at previous publicly funded broadband projects. Earlier projects in 2012 and 2015 showed that uptake to the improved service was so great that the Department will be able to claw back some £14 million from the contractor in 2023 and 2024. While this claw back mechanism is welcome, it does indicate that these projects may have been commercially viable.
“We all understand the importance of improving broadband to all properties in Northern Ireland—being able to access a fast, reliable service is as much a part of life now as water, heat and light. At the same time, we still need to be sure that the services we tender for are provided as agreed. We also want to be sure that we are spending public funds efficiently and effectively.
“We look forward to the Department taking our recommendations and using them to improve future and ongoing projects.”
Notes to Editors
Read the full Report – Broadband Investment in Northern Ireland
The Committee’s recommendations from the Report are:
The Committee recommends that in future contracts, the use of any automated formula is carefully considered to ensure it is appropriate and will give a score which is commensurate with the objectives of the procurement. This should involve a consideration of scoring methodologies used by Centre’s of Procurement Excellence (COPE’s) across all government contracts.
It is recommended that for any future exercises by all Departments which require access to databases containing the addresses of premises, more effective liaison is carried out at an early stage with Land and Property Services (LPS) to ensure that the information being provided is the most relevant information available and that any limitations of the data are fully understood.
It is recommended that in any future consultation exercise such as this, where the public are effectively being asked to confirm the completeness and accuracy of project assumptions, greater efforts should be made to promote awareness of the consultation.
It is recommended that LPS closely review how it maintains its pointer system to ensure that it is as accurate as possible and that as part of this improved arrangements are put in place to ensure that all information providers, particularly district councils, provide their information on as timely a basis as possible.
When providing evidence to the Audit Office as part of their enquiries it is recommended that Departments are as open and transparent as possible and share relevant information, even if it is not specifically asked for.
It is recommended that the Department urgently identify those properties that will still not have access to even basic broadband services at the end of Project Stratum and put arrangements in place to ensure that their needs are addressed. In the case of those who could not be included because they currently receive a basic service from a wireless provider, these should be clarified quickly and if they cannot be provided with faster broadband they should be added to the list of premises to be improved under Project Stratum.
The Committee recommends that in any future project the Department examines if there is any way that it might be able to better protect itself, and the integrity of its broadband projects, by limiting the potential for commercial operators to change their plans within a short period.
It is also recommended that the Department closely monitors the potential for overbuild and take steps to de-scope properties promptly if it sees a risk of that happening.
The 900 properties which have now been excluded from Project Stratum because the planned investment by BT is no longer happening should either now be included in the project or have some other process identified for improvement within the same timescale.
The Department should urgently investigate why no competitors have come forward to use the network funded by Project Stratum. It also needs to ensure that the fibre network it has paid for is made available to competitors at a fair rate so as to ensure reasonable prices for consumers.
Based on the experience from the Northern Ireland Broadband Improvement Project provided by BT, it is recommended that in any future scheme the Department needs to be much more robust in its estimates of how much benefit they expect from its investment. It would then be in a position to challenge the contractor about any differences and better assess value for money.
Clawback is due from BT on both the Northern Ireland Broadband Improvement Project and SRP2 project. It is recommended that the Department closely monitors the dates for repayment of the clawback amounts and ensure that the funds are received as expected. As far as possible this money should be used for further broadband improvements in Northern Ireland.
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