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Ministers must speed up £300m superfast broadband scheme - CBI

New CBI report urges three main political parties to work up long-term digital policy plans to avoid 2015 "cliff edge".

Ministers must accelerate a £300m scheme to provide superfast broadband to rural households, a new CBI report urged yesterday.

Let's Get Digital report - online magazine version >>  
Let's Get Digital report - PDF version >>

The UK’s leading business group warns it is a mistake to hold back the investment until after the next election, arguing that households and firms in rural internet “not-spots” need to be connected faster.

It argues it would be more cost-effective to roll forward the funding to target existing local schemes and a wider range of technology to drive up connectivity now - including fixed, mobile, wireless and satellite systems.

The CBI’s Let’s Get Digital report says it was symptomatic of short-term thinking from politicians on the digital infrastructure the UK economy needs – with fears from industry that broader digital policy is facing a “cliff-edge” in two years.

It calls on the three major parties to agree urgently on plans for the next decade and beyond – pursuing them with the same “verve” and “passion” that the Victorians electrified towns and built the first rail system.

And it warns against complacency from ministers, despite the UK already boasting the world’s biggest online retail market, pointing to international competitors starting to catch up quickly and thousands of smaller firms still not maximising digital technology in how they operate.

Katja Hall, Chief Policy Director, said:

“Broader, faster digital networks are revolutionising how society and business operate, just as the Victorian rail and electrification systems transformed the world in the 1800s.

“The UK has a positive story to tell on digital but we cannot be complacent if we want to stay ahead. Politicians of all parties must set aside the carping and map out digital plans together for the next decade and beyond. Too often difficult decisions are kicked into the long grass.

“Firms and industry need to know where they stand before investing for the long-term – with digital now as fundamental to business as transport or energy networks. Digital policy is not an optional add-on, it’s central to fuelling long-term growth through inward investment, job creation and exports.”

The other key recommendations include:

  • set up a major cross-industry-Whitehall review and strategy for digital infrastructure to meet the UK’s needs over the next decade;
  • revise future versions of the National Infrastructure Plan to get the right digital networks in place so contractors deliver major construction projects on-time and on-budget;
  • boost smaller firms’ take-up of e-commerce and digital business-models, through a major skills and awareness campaign. Research shows more SMEs marketing and doing business online could generate £18.8 billion a year;
  • expand online public services to drive demand for and infrastructure – including speeding up government’s ‘digital by default’ strategy;
  • create robust industry and business digital partnerships, like in the music industry, to maximise the potential of new technology.

On rural broadband

In 2011, the Government announced plans to give 90% of households in every UK local authority internet access to superfast broadband by May 2015 and a minimum of two megabits for others.

The programme was backed by £530m of matched funding for rural broadband projects and a further £300mm, if needed, from future BBC licence fee revenue beyond 2015 – through the Broadband Delivery Programme.

Last month’s 2015/16 Spending Review earmarked £250m of the £300m to extend high-speed service to 95% of homes by 2017.

Katja Hall said:

“We must close the rural/urban internet divide. It’s a huge concern that many areas still lack the high-speed connectivity that the rest of the country takes for granted.

“We cannot wait another two years for this investment to start flowing and we need clarity on the further £50m originally set aside, which still remains uncommitted. It will be far quicker to invest in existing innovative, ongoing local and industry schemes now to unlock economic and social benefits.”

“Industry has taken the lead on expanding broadband connectivity across the country. Government now has to do its bit on the hardest areas to reach – particularly when 4G is becoming standard and 5G is on the horizon.”

On boosting SMEs’ digital take-up

Katja Hall said:

“None of the on-going work to boost digital infrastructure will matter if the new networks are not used. You can take a horse to water but you cannot make it drink and we’ve seen the impact of even well-established high street firms not moving with the times. Both industry and government must work harder to give smaller firms the confidence and skills to shift online, where their customers are. We must make sure all the upgrade work does not go waste if we want to stay ahead of the rest of the world.”

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