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CABINET Agenda Item: 10

Ward: All

Portfolio: Supporting Business Development and Growth

Report Author(s):

Cllr Tom Killen, Portfolio Holder Business Development and Growth

Meeting Date: 7 July 2014

SUBJECT: Match Funding for the Superfast Broadband Extension Programme

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Report Sign off

Seen by: Name Date

Legal Donna Nolan 24/6/2014

Finance Adam Savery 24/6/2014

Procurement Geoff Thompson 24/6/2014

Corporate Manager

Chris Atkinson 24/6/2014

Portfolio Holder Tom Killen 24/6/2014

Ward Member(s) All

Summary:

To seek an in principle decision from Mendip District Council to provide match funding towards the Superfast Broadband Extension Programme

Recommendation:

That Cabinet agree to an in principle financial contribution for the bid into BDUK‘s Superfast Extension Programme to enable an increased delivery of the programme and increased Superfast Broadband delivery into the district.

Direct and/or indirect impact on service delivery to our customers and communities:

The extension programme assists the delivery of superfast broadband to rural areas.

Legal Implications:

There are no legal implications associated directly with this report. Should Cabinet agree in principle to support this bid, then there will be legal implications associated with the BDUK's Superfast Extension Programme and appropriate legal advice will be obtained when the need arises.

Financial Implications:

There are no financial implications associated directly with this report. Should Cabinet agree there in principle support for this bid, then a more detailed report will be presented to Cabinet further into the Broadband funding process to enable a final decision to be made.

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Value for Money:

The fundamental principle is to provide appropriate investment into the extension programme to encourage a prosperous economy; which will contribute additional income in the future for public services.

Equalities Implications:

The extension programme aims to ensure that there is opportunity for all to access superfast broadband.

Risk Assessment and Adverse Impact on Corporate Actions:

The extension programme assists the delivery of superfast broadband to rural areas and supports economic delivery and growth

Scrutiny Recommendation (if any)

This report will be presented to the next Scrutiny Board on 28 June.

Author: Matthew Ballard, CDS Programme, Somerset County Council

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The current Connecting and Devon and Somerset (CDS) Programme will deliver 90% superfast broadband coverage as planned to the area by the end of 2016. This leaves 10% of the CDS area (Devon and Somerset) without any improvement in broadband speeds, which equates to approximately 90,000 premises. This gap in broadband provision has been recognised by Government, which under the Superfast Extension Programme (SEP) has made available an additional £250m with the objective of bringing the UK up to 95% superfast broadband coverage by the end of 2017. On February 25th 2014 Government announced how the £250m was to be allocated across the UK. CDS was granted £22.75m - the largest single allocation made to a programme in England. To draw down this funding Government has stipulated that Local Authorities provide 50% match funding. Somerset County Council’s (SCC) Senior Leadership Team (SLT) met on March 24th 2014 and took the view of considering an in principle capital match contribution of up to £2m to support this County Plan infrastructure priority, which is to be put to SCC Cabinet on June 30th 2014. Devon County Council has undertaken a similar process resulting in an in principle capital match contribution of £2m.

1.3 Following this is in principle decision by SCC, District Councils were briefed on SEP and asked to consider in principle their own capital contribution to support a full application to BDUK - the deadline for which is June 30th 2014 -and asked collectively to contribute an additional £2m, in line with the sum being sort from SCC cabinet.

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1.4 In arriving at a position, in terms of an indicative capital contribution for each District Council and a figure for the number of additional premises expected to benefit from a superfast broadband connection, CDS has analysed the latest available data; however, it should be noted that this is subject to change, if for example the current CDS programme were to exceed its target of 90% superfast coverage and following a procurement exercise to select a broadband supplier(s).

1.5 A new procurement exercise will be required as the current contract with BT

would breach materiality if funding in excess of 10% of the contract value (£94m) was to be introduced. A new procurement is also required so that more appropriate technologies, such as wireless or 4G, could be deployed. Given the nature of the geography in question, CDS expects that these technologies would be required so as to ensure value for money and to deliver 95% superfast broadband coverage into deeply rural areas.

1.6 It is recognised that a detailed partnering agreement and governance

arrangements will be required which will be agreed at a later date following full consultation with District Councils that are able make available a capital contribution.

2. ACTION REQUIRED FROM MENDIP DISTRICT COUNCIL

2.1 Mendip District Council is asked to agree in principle a capital funding commitment of £0.40m. It is estimated that this will deliver an additional 3,944 superfast premises by the end of 2017 – this is in addition to the premises that will be delivered under the current CDS programme. Mendip District Council is asked to consider this in principle capital funding commitment on the basis that it could be made available across multiple financial years up until the end of 2017. It is understood that to assist in the decision making process that mapping to identify the areas set to benefit from SEP would be essential. CDS will undertake to deliver this mapping but it must remain confidential and the preferred means by which this would be shared would be by way of a confidential briefing to members and senior officers.

3. BACKGROUND

3.1 Increasing the availability and take-up of superfast broadband is a key driver for enterprise and growth, and therefore remains a high priority. There are a range of significant benefits for business that access to superfast broadband can unlock, for example, supporting the development of new, more efficient, business models and enabling increased international trade and collaborative innovation. Extending deployment of superfast broadband in under-served areas can also safeguard employment in areas which would otherwise be at an unfair disadvantage. Superfast broadband also supports inclusion in the digital economy for consumers in rural areas, allowing, for example, greater e-commerce and interaction with public services through digital communications.

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3.2 Improving the availability of superfast broadband also has role to play in increasing the resilience of the District, its infrastructure and communities. Had superfast broadband been more widely available on the Somerset Levels during the recent flooding then the impacts could have been significantly reduced, for example, employees could have worked remotely from home removing the need to travel. It should be noted that BDUK SEP guidance states that any allocations not drawn down by local authorities could be redistributed to other local authority area throughout the UK. Therefore, there is a danger that a proportion of the current SEP allocation could be reallocated to other Local Authorities if the full match funding requirement were not to be met.

4. HIGH LEVEL BREAKDOWN OF SEP MATCH FUNDING REQUIREMENT Allocated SEP Funding £22.75m Match Funding Requirement £22.75m LEP EU Funding £4.275m LEP Growing Places Loan Fund £4.2m SCC / DCC Provision £4.0m Somerset Districts £2.0m Other contributions unitaries etc £4.1m Broadband Suppliers Contribution £3.0m Remaining Funding Options £1.175m Please note the figures above are subject to change and provide an indicative assessment only. 5. OPTIONS

Agree an in principle capital financial contribution for the bid into BDUK’s SEP programme to enable full delivery of the programme and increased superfast broadband roll out into the District

Agree to not support an in principle capital financial contribution which could lead to less additional superfast broadband roll out into the District

Contact Officer: Chris Atkinson Extension: 217 e-mail: chris.atkinson@mendip.gov.uk