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Recommendation for Welsh Government Digital Inclusion & Adequate Affordable Broadband for Social Housing Tenants

December 2013

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Contents

Section Page No. Section 1 Executive summary 3

Section 2 About us 3

Section 3 Setting the scene 4

Section 4 The affordability barrier 11

Section 5 Work taking place across the sector 15

Section 6 Interventions 19

Section 7 Recommendation 22

Section 8 Opportunities 24

Bibliography 28

Contributors Community Housing Cymru Digital Inclusion Task and Finish group members: Hayley MacNamara Community Housing Cymru and CREW Regeneration Wales Terry Price Communities 2.0 Karen Roberts Communities 2.0 Richard Troote Wales & West Housing Louise Kingdon Melin Homes Farida Aslam Monmouthshire Housing Association Alun Dowling RCT Homes Kevin Hedges Coastal Housing Group Brett Sadler North Wales Housing Association Neil Jones Newport City Homes Andrew Jones Charter Housing Richard Coombe Taff Housing Association Attendees at Digital Inclusion Workshop hosted by Community Housing Cymru, 7th June 2013

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1. Executive Summary Digital exclusion is a societal issue impacting on health, education and skills, employment and infrastructure. Almost half of social housing tenants do not have access to the internet which is why digital inclusion is a high priority for Registered Social Landlords (RSLs) in Wales.1 Access to the internet is necessary for tenants to reap the benefits of being digitally included and to have the means to claim their Universal Credit online when it is rolled out nationally in 2017. Many RSLs are operating successful digital inclusion programmes to engage tenants with the internet and develop their digital skills. Some are also piloting new broadband schemes within small residential areas and in sheltered accommodation. Since June 2013, Community Housing Cymru has led a Task and Finish Group to look at the barriers to digital inclusion, primarily focusing on the high costs of home broadband. The cost of broadband remains a key barrier to tenants accessing the internet and RSLs, Communities 2.0 and Welsh Government recognise that an affordable solution is needed. Only a collaborative and pan-Wales approach can provide the scalability needed to benefit all tenants. The Task and Finish Group has looked to identify an affordable solution that complements the work that is already taking place across the sector and in Wales to provide a new opportunity assisting those that are not digitally engaged due to the high associated costs. In this report we present the benefits of accessing the internet and evidence how affordability is a key barrier to Digital Inclusion. We identify the interventions that can be applied to provide affordable broadband access in the home and provide examples of how these are currently being used in the sector. Finally, we recommend to the Welsh Government that a new entity is needed to assist RSLs with developing new affordable broadband schemes for social housing tenants.

2. About us The Community Housing Cymru Group (CHC Group) is the representative body for housing associations and community mutuals in Wales, which are all not-for profit organisations. Our members provide over 155,000 homes and related housing services across Wales. In 2012/13, our members directly employed 8,000 people and spent over £1bn in the economy. Our members work closely with local government, third sector organisations and the Welsh Government to provide a range of services in communities across Wales. Our objectives are to:

Be the leading voice of the social housing sector. Promote the social housing sector in Wales. Promote the relief of financial hardship through the sector's provision of low cost social

housing. Provide services, education, training, information, advice and support to members. Encourage and facilitate the provision, construction, improvement and management of low

cost social housing by housing associations in Wales.

1 Welsh Government, ‘Household has internet access, by tenure’, National Survey for Wales Internet Access

Figures 2013

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Our vision is to be: A dynamic, action-based advocate for the not-for-profit housing sector. A ‘member centred’ support provider, adding value to our members’ activities by delivering the

services and advice that they need in order to provide social housing, regeneration and care services.

A knowledge-based social enterprise. In 2010, CHC formed a group structure with Care & Repair Cymru and CREW Regeneration Wales in order to jointly champion not-for-profit housing, care and regeneration. Since June 2013, CHC has worked with a Task and Finish Group including representatives from Community 2.0 and RSL members from across Wales to research the affordability barrier to digital inclusion and identify an intervention that can be applied to alleviate the issue. This report includes the findings from this extensive research and engagement.

3. Setting the scene The Welsh Government’s ‘Digital Wales’ programme has set a vision for everyone in Wales to enjoy the benefit of digital technologies and have the skills to be digitally included.2 It funded the Communities 2.0 digital inclusion project to help break down the barriers to engagement of technology. In addition the provision of adequate internet access across Wales is being addressed through the Superfast Cymru project which aims to provide fibre broadband to 96% of Wales by 2015. Both the social housing sector and Communities 2.0 have undertaken extensive work to raise awareness of the benefits of accessing the internet and to develop skills. In spite of this work the affordability barrier remains the most difficult to overcome and, according to Welsh Government, 33% of those not online cite high equipment or access costs as the main reason3. To date, those without access to the internet at home make use of public computers which are available in all Welsh libraries and some schools, further education colleges and community hubs. Access to these computers may be free or there may be a small charge (with most libraries charging for printing). However, availability is limited with some facilities requiring customers to wait or book in advance. Some libraries are restricting access to those that are not registered with the library or who have library arrears. The provision of these services will also be reduced with the proposed closures of local libraries. Customers are warned to be careful when using public computers due to the potential security risks. Get Safe Online recommends avoiding financial transactions on public computers to ensure that confidential information is not left on machines. Due to the security issues and the limited availability of public computers, it is more practical for tenants to have access to the internet and undertake financial transactions (including the claiming of their universal credit) from their device in their home. This is supported by Welsh Government Internet Use Figures (May 2013) which state that 84% of social housing tenants that use the internet do so within their home, with the majority (66%) using a laptop to access.4 Intervention is therefore needed to support tenants with acquiring home broadband access using a personal device.

2 Welsh Government, Delivering a digital Wales, 2010, p. 5

3 Welsh Government, Digital Inclusion: Analysis Package, 2011, p.17

4 Welsh Government, ‘Device used and household access, by tenure’, National Survey for Wales Internet Access

Figures, 2013

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3.1 Relationship between digital inclusion and social exclusion

Research has shown that Welsh social housing tenants are more likely to be digitally excluded than

owner-occupiers (see 3.3). Digital inclusion therefore creates a social divide with household tenure being

a key indicator of digital exclusion. In turn, the exclusion of IT and digital access within communities

becomes a social development problem as those without access cannot benefit from the many

advantages of using the internet. As the European Commission (2009) emphasises, the promotion of

digital inclusion is a societal issue rather than a technological one. Without a robust digital inclusion

strategy to tackle this digital divide, social housing tenants will face increased marginalisation and social

exclusion.

3.2 Task and Finish Group Since July 2013, Community Housing Cymru has led a Task and Finish Group consisting of nine RSL members from across Wales and two Communities 2.0 representatives to investigate the barriers to digital inclusion in the social housing sector. As recognised by the sector and the Welsh Government, the high cost of home broadband is a key barrier which is yet to be addressed at scale. The task and finish group has therefore focused on the affordable access barrier and has sought to identify interventions that can be used to deliver new affordable broadband services. The term ‘affordable’ is used throughout the report in order to refer to a service that is more competitively priced than the home broadband packages currently available, which are considered by the sector and tenants to be unaffordable. As part of this work, the task and finish group has engaged considerably with the RSL sector, Internet Service Providers (ISPs), and organisations that work on digital inclusion in order to identify the work that has taken place to date and the interventions that are available to develop affordable broadband services for social housing tenants. This report discusses these findings and recommends to Welsh Government that a new entity is needed to assist RSLs with developing this agenda. 3.3 Digital exclusion and social housing tenants The Task and Finish Group has sourced survey results from RSLs across Wales to evidence the percentage of social housing tenants that are digitally excluded. The combined results, which include responses from tenant profiling and digital inclusion surveys, indicate that 47% of social housing tenants do not use the internet.5 This correlates very closely with Welsh Government figures that were released in May 2013 which state that 46% of social housing tenants do not have access to the internet within their own home. This amounts to over 214,000 digitally excluded tenants.6 The questions used to survey tenants vary. For example, asking “do you use the internet?” or “do you have internet access?” will produce differing survey results depending on interpretation. Inclusion will also be higher in areas with better broadband coverage compared to not-spot areas. We therefore cannot rely on these figures for accuracy; however, the results provide an idea of the scale of digital exclusion within the sector which amounts to almost half of social housing tenants. 3.4 Reasons for digital exclusion According to the Welsh Government’s ‘Digital Inclusion Analysis Package’, Lower Super Output Areas (LSOAs) with high levels of digital exclusion tend to be those with relatively older populations and/or those with high levels of social and economic exclusion. These areas will include people with lower socio-economic status, individuals with limiting disabilities and those with lower educational attainment.

5 Community Housing Cymru, Digital Inclusion RSL Survey, 2013

6 Welsh Government, ‘Household has internet access, by tenure’, National Survey for Wales Internet Access

Figure,s 2013

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Social housing tenants are most likely to make up this demographic and are therefore more likely to be digitally excluded. Chart 1 The parameters of digital inclusion7

According to UK Online Centres Foundation, the barriers to digital inclusion can be categorised into Motivation, Skills and Confidence, and Access (Chart 1). The Welsh Government has collected results on the reasons cited by social housing tenants for not accessing the internet which are shown in Table 1. Those surveyed were able to provide more than one answer, hence why the figures do not add to 100%. Table 1- Reason for not currently using the internet, by tenure8

Barrier Reason % Social Housing Tenants

Motivation Don't want or need to use the internet 89

Access or Skills and Confidence

Equipment or access cost too high 20

Lack of skills 31

Health problems make it difficult 5

Table 1 highlights that motivation is cited as the main reason for digital exclusion by 89% of social housing tenants, followed by Access or Skills and Confidence barriers, including the costs of access and skills and health reasons. 2.2.1 Reasons for digital exclusion The reasons for Motivation, Access, and Skills and Confidence barriers can be summarised as:

Motivation - According to Welsh Government statistics, 89% of social housing tenants express that they are not aware of the benefits, do not feel that they need to use the internet, or are simply not interested in using the internet.9 Although it’s not the preferred method to engage tenants, Universal

7 UK Online Centres Foundation, Digital Engagement - Understanding Customers, 2011

8 Welsh Government, ‘Reason for not currently using the internet, by tenure’, National Survey for Wales Internet

Access Figures, 2013 9 Welsh Government, ‘Reasons for not currently using the internet’, 2013

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Credit could provide the motivation to engage these people with taking the crucial first steps towards digital inclusion.

Access - There is a lack of broadband coverage with decent bandwidth levels in many communities across Wales which provides a barrier to access within the home. Public access points provide an alternative but access is preferred in the home for reasons discussed above.10 Superfast Cymru will deliver fibre broadband to 96% of Wales by 2016 but the cost of home broadband will and still remains to be a key barrier for social housing tenants, which is yet to be addressed.

Health - Analysis shows that, overall, individuals with a limiting long term illness are 42% more likely to be digitally excluded.11 Disabled people are also significantly less likely to live in households with access and are 49% more likely to be digitally excluded.12

Education and skills - Using the internet requires only basic levels of digital literacy but many people cite skills and knowledge as key reasons for why they are not online. As Table 1 highlights, 31% of social housing tenants lack the skills to access the internet.

Age - Consumers in Wales over the age of 65 (35%) are least likely to have broadband access.13

Low income/socio-economic exclusion - People in Wales living in households with an annual income of less than £17.5k (47%) are the least likely to have broadband access.14 The cost of broadband access and computer hardware may outweigh the consumption benefits for households on low incomes, and as Table 1 highlights, 20% of those not online cite costs as the main reason, equating to approximately 42,000 tenants. In addition, those without bank accounts and with poor credit rating are either excluded from accessing broadband accounts or are subject to a handling fee for not paying by direct debit.

3.5 The benefits of using the internet The above reasons for digital exclusion create a barrier to access and a lack of interest in the internet, but the internet itself is not a limitation. The internet is generally inclusive and allows for anyone, regardless of age, social status or any other factor to benefit. For those that are online the internet has changed the way they go about their lives and access is considered almost as a fourth utility.

To help overcome the motivation barrier, raising awareness of the considerable benefits of digital inclusion is needed. A ‘hook’ is needed to engage the interests and benefits to the audience, for example;

Education and information:

Access information quickly on professional, school and personal issues.

Learn online and obtain qualifications through online courses.

Learn informally through finding information online.

Engage directly with schools through electronic communication.

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Welsh Government, ‘Place of internet access’, National Survey for Wales Internet Access Figures, 2013 11

Welsh Government, ‘Personal use of internet by limiting long term illness’, National Survey for Wales Internet Access Figures, 2013 12

NatCen Social Research, British Social Attitudes Survey, 2011 13

Ofcom, The Communications Market Report, 2013, p.73 14

Ofcom, p.73

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Skills and Employment:

Search or apply for jobs online. In the UK, jobseekers are 25% more likely to find work online as an

increasing number of organisations move to online application processes.15

Benefit from flexible working practices such as working from home.

Benefit from better employment outcomes. People with good ICT skills earn up to 10% more than

people without such skills.16

Saving Money:

Shop around online for more competitively priced goods and services. It is estimated that households

offline miss out on savings of £560 per year from shopping and paying bills online.17

Access content and services that would cost offline e.g. free e-mail instead of the postal service.

Communication:

Engage socially by keeping in touch with family and friends and meet new people with similar

interests through email, Skype and social networking sites.

Convenience:

Benefit from a range of convenient services, including online shopping, renewing car tax, making an

appointment etc. These services save time for citizens and consumers and lower transport costs,

reduce congestion and in turn improve the environment.

Managing Money:

Manage finances using an online internet banking service and pay for bills online. Universal Credit

claimants will also be able to manage and claim their benefits online by 2017.

Health and social care:

Access health services online. Many long term illnesses can be monitored by the internet via remote

monitoring. A large scale trial of Telehealth monitoring service from 2008 to 2012 of 6,000 patients

resulted in a 45% drop in mortality and a 20% drop in emergency admissions.18

Improve well-being and mental health, particularly for the elderly. A study at the Phoenix Centre

found that internet use leads to around a 20% reduction in depression classification and, compared

with the digitally excluded, internet users feel less lonely and their personal wellbeing is enhanced.19

Online Public Services:

Access online public services. The UK Government is currently initiating a ‘digital by default’ strategy

and the Welsh Government is developing a Digital First strategy for Wales which will improve online

public services. NHS Choices is an example of an online service that provides access to health

information advice. Four in ten (41%) of NHS Choices users agree that the website helps them to

manage their own symptoms.20

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UK Online Centres Foundation, UK Jobs and the Internet, 2012, p.5 16

PriceWaterHouseCoopers, The Economic Case for Digital Inclusion, 2009, p.2 17

PriceWaterHouseCoopers, 2009, p.5 18

Booz and Company, “This Is For Everyone” The Case for Universal Digitisation, 2012, p.20 19

Phoenix Centre, Internet Use and Depression Among the Elderly, 2009, p.3 20

NHS Choices, Transparacy, transaction, participation. Annual report 2012/2013, 2013, p.6

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3.6 The benefits of a digitally included society

Digital inclusion benefits the society at large by making key savings in government operations and

creating sustainable and healthy communities. Chart 1 illustrates how digital inclusion can contribute to

society with short, medium and long term benefits using research undertaken by Booz and Company.21

Improved Government Efficiency

Bringing more digitally excluded citizens online has the potential to enable significant economic benefits

in terms of the delivery of public services by enabling providers to switch to lower cost delivery channels,

by reducing time and costs of transacting with government, and improving satisfaction with public

services. If each of the 10.2 million digitally excluded adults in the UK could be enabled to switch one

contact or transaction each year online from other channels, this would generate savings of around £900

million per annum. In addition, if local government digitised transactions it could cut CO2 emissions by

28% because of reduced travel and paper usage.22

Growing economy

Better use of internet services will encourage businesses to invest more in infrastructure. The total

potential economic benefit from getting everyone in the UK online is in excess of £22 billion.23

Chart 2: The wider benefits of Digital Inclusion24

Sustainable communities

The benefits of using the internet (as described in section 3.5) shows that greater digital capability

benefits society by improving education, connecting the elderly more effectively, helping people back into

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Booz and Company, 2012 22

Booz and Company, 2012, p.33 23

PriceWaterHouseCoopers, 2009, p.6 24

Booz and Company, 2012

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work, and better health and social services. These contribute towards a more sustainable and inclusive

society.

3.7 Overcoming digital exclusion

Digital exclusion affects those who could benefit from it the most. As highlighted, having access to the

internet can mean the difference between work and unemployment, inclusion and exclusion, and

happiness and depression. As the proportion of individuals that are digitally disengaged decreases, the

severity of exclusion experienced by those remaining disengaged can be expected to increase.

3.8 The role of RSLs

In 2012, Communities 2.0 and Community Housing Cymru undertook research on digital inclusion and

the social housing sector. A survey of housing associations was undertaken to identify what social

landlords were doing to encourage digital inclusion and develop digital inclusion strategies. The

questionnaire covered four key areas in relation to digital inclusion – corporate vision; access and

connectivity; skills and training and tenant engagement. Twenty four RSLs responded and the outcomes

led to the development of five recommendations:

1. The need for a strategic approach. RSLs should develop digital inclusion strategies and ensure

that the substantial time of a named individual is dedicated to this.

2. Business case for digital inclusion. Training and support should be provided to RSLs to help

them understand how digital and financial inclusion will help them secure future revenue streams.

3. The importance of Communities 2.0 and partnership. Communities 2.0 should further support

RSLs that have not previously been worked with to develop an off-the-shelf Digital Inclusion

project template.

4. Providing equipment, support and internet access. A national approach should be introduced

to develop affordable offers for tenants covering equipment and access costs.

5. Housing associations’ use of digital technology. Housing associations should be supported

with developing their websites and social media communications for more interactive

engagement with tenants.

The outcomes of this research and the work that has been undertaken by the Task and Finish group

identifies that in Wales, considerable work has been undertaken to overcome the Motivation and Skills

and Confidence barriers. RSLs have worked with a range of partners (e.g. Communities 2.0,

Communities First, ISPs, schools etc.) to raise awareness of the benefits of being online and to provide

basic online skills training. Progress has also been made in making equipment more affordable through

recycled computer schemes and discounts for those in receipt of benefits.

Examples of the types of activities that have been undertaken across the sector:

• IT and online training for tenants.

• Free installation of PCs in properties.

• Provision of computers in community hubs.

• Provision of refurbished affordable IT equipment for tenants.

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3.9 Barriers to digital inclusion in the sector

In comparison there has been less intervention on access in terms of overcoming the cost of broadband.

Some RSLs and small ISPs have explored the provision of affordable broadband for tenants, examples

of which are provided in Section 4. Small scale pilot schemes have been successful but several barriers

including infrastructure, costs, capacity and the monopoly of large ISPs, to name a few, has prevented

progress at scale.

Recommendation 4 of the 2012 Communities 2.0 and CHC research (“Providing equipment, support and

internet access”) highlights that a national approach is needed. RSLs are well placed to deliver

broadband schemes if support is provided to help overcome these barriers. Increasingly RSLs are

considered to be regeneration agencies, tackling poverty and improving communities in addition to their

core remit to provide affordable housing. Their engagement abilities, relationships with tenants and

financial and resource capacity enable them to deliver new broadband schemes and it is in their interest

with the pressures posed by the introduction of universal credit. As expected, Welsh RSLs have

expressed to CHC that they are supportive of a programme which assists them with tackling digital

inclusion, particularly the affordability barrier.

4.0 The affordability barrier

There are a number of pressing issues that impact on moves towards obtaining affordable and adequate broadband for social housing tenants. This section will look at these and also at examples of attempts to address this. These issues have been identified through consultation with the RSL sector and stakeholders. 4.1 The Tenant and Families Perspective Welfare reform The changes in Welfare provision being implemented by UK Government are not only impacting very negatively on income levels for many tenants and their families, but the insistence on using digital tools as the prime means of both claiming basic entitlements and also as a way of demonstrating on-going eligibility (by having to demonstrate active online job searching and other conditions) means that those without internet access are at a severe disadvantage and more likely to suffer penalties. This could further reduce incomes and carries the added risk of disruption to payments and the imposition of penalties for non- compliance. The complementary pressures on the public purse mean that for those without broadband at home, alternative public computer points will also diminish over the next few years due to library cuts. Jobs and skills Social housing already has a high proportion of tenants on low incomes and with low skills. In order to have better paid employment opportunities, tenants increasingly require higher levels of digital skills both in the workplace and in their efforts to obtain work and better qualifications. Seventy two per cent of employers would be unlikely to offer an interview to an entry level candidate if they did not have basic computer or internet skills and 92% of new positions require internet skills.25 Failure to develop those skills and have access to the internet reduces their chance of moving out of poverty.

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UK Online Centres Foundation, UK Jobs and the Internet, 2012, p.8

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Child Poverty and Educational Attainment There are strong links between poor educational attainment and child poverty and, in the longer term, this has an adverse impact on social mobility. Children in households without access to the internet at home are at a severe disadvantage compared to children in more affluent connected households. Figures from Experian suggest that for children, home access to a computer could generate up to £300,000 in additional earnings over their lifetime. UK wide, this would amount to £6.6bn in additional income.26 Reduced Access to Services Cost pressures are forcing more RSLs to channel shift and move services towards online delivery as the default option. As a result, tenants without broadband face a poorer service response and, in most cases, higher costs through alternative options whether in the form of additional fees, telephone and travel costs as well as time involved. Most Councils, RSLs, Government Services, Health, and Utilities are following the retail industry in favour of online services as cheaper, quicker and easier options, as highlighted in Section 3.5. 4.2 The RSLs and Public Services Perspective Cost pressures RSLs and other public services are going to come under increasing financial pressure to drive down costs. Basic income from Welsh Government faces real time reductions whilst, at the same time, inflationary costs add to the squeeze. They will have to move to cheaper delivery options and online services are generally a much better financial option. In addition recent changes to the welfare system mean that RSLs in particular face the likelihood of higher levels of rent arrears and all the associated additional costs of dealing with tenants in arrears. This is already evident with the introduction of the ‘bedroom tax’. During the first six months of the policy being implemented, 78% of Welsh RSLs have seen an increase in rent arrears. Over £1million has been attributed to the ‘bedroom tax’ and this will be exacerbated further when Universal Credit is mainstreamed. Those tenants that are not online bring higher levels of risk of default through the greater risk of having their already stretched incomes reduced. Variety and Capacity In looking at solutions for addressing access to broadband, RSLs face huge challenges because of the wide variety of housing stock and the nature of its location. Some stock lies in areas with good quality superfast broadband nearby, others are in locations where the basic provision is almost non-existent because of poor fixed line telecoms infrastructure. Tenants may be on large estates, in houses or blocks of flats, sheltered complex or in small ribbon developments (rural and cities) with only a small number of properties in close proximity at any one location. RSLs are of widely differing sizes and cater for different types of tenants. This means there are real differences in capacity to examine and find solutions and a lack of commonality in end user solutions. A one size fits all solution will definitely not work. More dynamic engagement with service users With the co-production agenda and the need to better target services and involve service users in shaping the nature of services, the ability to communicate with these service users online is a quicker and more flexible way of promoting the necessary dialogue, avoiding the costly production of paper materials, making it easier for the reporting of repairs and rent management and providing more efficient potential for analysis of data. United Welsh has estimated that through a move to online engagement the organisation would save an estimated £74,000 per year from saving on transaction, print and mail out costs. Digitally engaging all tenants would result in further savings.

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Experian, Impact of 1:1 PC Ownership, 2012

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Business case

The business case for investing in digital services is compelling. By making it easy for tenants to report

repairs, manage their rent and get involved in their communities, RSLs gain more responsive, efficient

services, lower transactional costs, and gather improved customer information, among other benefits. In

addition digital engagement is crucial to the successful roll-out of Universal Credit and ultimately the

claiming and paying of rent online. During the first six months of the ‘bedroom tax’ being implemented,

78% of Welsh RSLs have seen an increase in rent arrears. If the 214,000 that are digitally excluded

across Wales are not online by the full roll-out in 2017, rent arrears and ultimately eviction costs could

threaten the sector, resulting in a homelessness crisis.

Improvements in service quality and impact on costs have been good enough reasons to invest the time,

energy and resources to persuade tenants to take up online opportunities and to subsidise the costs

involved.

4.3 Infrastructure and demand The historic lack of decent broadband in many localities Even where RSLs have tried to set up more affordable schemes (often with tenants sharing broadband by Wi-Fi), attempts have been dogged by the lack of readily available broadband with adequate bandwidth. This has been a major obstacle and trying to introduce good quality broadband to an area by laying cable or the use of point to point Wi-Fi or satellite has required very large up-front costs. Often the local broadband provider will insist that there is broadband availability even though it is patently of poor quality. However the roll-out of superfast broadband over most of Wales should mean that sufficient bandwidth and broadband speeds should be available to 96% of homes, even in very rural areas. The Superfast Cymru rollout and so-called “fibre to box” option opens up huge possibilities for a new approach and should eliminate this issue over the next 2 years. Landlines Most broadband is currently offered as part of a package with a telephone landline. Telecoms companies tend to make their profits through the telephone line rental and call charges and often the broadband element can be given below cost to attract the telephone element. Some of the major providers have traditionally been insistent that broadband cannot be shared with others even if there is huge excess capacity. Some smaller providers are more relaxed and happy to allow lines to be shared between more than one residence. However, there is an increasing trend for tenants to use mobile phones and, as such, many households no longer have a landline in place. Any affordable solutions will therefore have to consider the absence of landlines to most homes. At present it is not clear if Universal Credit will be designed to be accessed on a phone or a tablet device but the complexity and length of the Universal Credit process will make it extremely difficult for someone to accurately input their information on a mobile device. In addition, only 9% of those that are digitally engaged only access the internet via their smartphone.27 Collaborating with an ISP (Internet Service Provider) Although the major suppliers tend to be reluctant to surrender the single line/single house approach (which is highly profitable), some have been promoting their own Wi-Fi models but these still tend to be expensive. However, there are a large number of smaller ISPs which are willing to be far more flexible in allowing the sharing of lines and the provision of broadband without the accompanying landline. The task group has had the opportunity to meet with some smaller suppliers and seen how some of these more imaginative approaches are already working (Section 5). Provided that the initial broadband is available

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Ofcom, p.6

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in the intended scheme area, then it is possible to construct different types of solutions for different types of accommodation. Sharing In pre superfast days, lines were often too weak to allow the sharing of even basic levels of broadband. However the Superfast Cymru roll-out changes the landscape completely. Average minimum speeds of 15 to 20Mbit/s means that a single line can easily be shared between 3 or 4 households and permit each user a wide range of activities – what we deem an adequate supply, whilst splitting costs – a tenant to tenant scheme. In some areas speeds are much higher and potentially more could share a single line, reducing costs even further. There are a number of ways in which sharing could be organised either by grouping residents around one primary recipient who takes responsibility or more communal based schemes where the responsibilities are borne by an organisation acting on their behalf. This means that larger scale community Wi-Fi schemes could be set up to cover spatial areas, blocks of flats and sheltered complexes to serve larger groups of tenants. The technologies to run both schemes are now readily available, provided there is a sufficient broadband supply.

Drawbacks to sharing Although many technical solutions for setting up the local infrastructure sharing options to suit local need are available and tested, there are some potential pitfalls that need to be resolved which, in the past, have held back initiatives. When lines are shared there are issues to be resolved concerning the collection and payment of running costs to ensure that the primary recipient (who is responsible for the on-going payments) receives the contributions from other parties. There are also some privacy issues and ensuring responsibility for an individual’s actions if one party makes illegal use of the broadband, some of which fall on the “owner” of the shared line and some on the provider (ISP). Fortunately E-crime Wales’ website provides useful examples of agreement templates that help overcome this28.

There is also a danger of scale if projects are undertaken independently of an existing ISP. For example, where a large number of individuals band together in their own independent scheme to share broadband and manage the costs and charges, they risk inadvertently becoming an ISP by default with all the additional legal obligations and costs that might bring. There are also the accompanying expectations of an effective maintenance and troubleshooting service which is difficult to manage in a cost effective manner on the smaller scale. For these reasons, it is probably easier and more advisable to work alongside an existing sympathetic ISP which will shoulder most of these responsibilities.

Movement of tenants There are initial outlay costs associated with setting up new sharing schemes and, although not excessive, they can be off putting if a one off charge is made. Most providers tend to favour recouping these through their incorporation in revenue charges over a given period. There is a debate as to whether these costs should be the responsibility of individual tenants on choosing to join a scheme or should be borne by the RSL as an incentive for tenants to join. Again this is very much governed by the business case individual RSLs arrive at. If a tenant decides to move, and they own the equipment, then the equipment is more likely to move with them. A replacement tenant may be less likely to join a scheme if they have an initial outlay. This perhaps adds further risk to voluntary agreements to share such costs and responsibilities and more vulnerable to collapse or see residual costs rise for those left behind. Questions would have to be addressed – for example, should tenants be required to sign up for minimum periods regardless of future movement and, if so, what should that time commitment be? Small scale agreements between 4 or 5 tenants therefore may carry greater risks than larger scale sharing schemes which can more easily

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E Crime Wales, www.ecrimewales.com

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absorb movement. However, larger scale sharing schemes would probably need an intermediary organisation to manage and even out costs fluctuations created through change. Scaling up and using an intermediary could mitigate such risks and share them over a larger group, becoming more predictable and evening out potential price fluctuations. Installation costs It is apparent that, given the wide variety and location of housing stock, a range of end user solutions will be required to fit local circumstances. Each will come with different set up costs, both at the point of access and broadcast of the broadband source and within tenants’ homes. These could either be seen as up-front costs or built into any on-going broadband revenue bills. The question of whether these should be borne by tenants receiving the service or by RSLs (in full or in part) is likely to be determined by each business case. New Build Like utilities, it is easier and cheaper to install equipment to promulgate and receive broadband at the time houses are built rather than adding piecemeal at a later stage. Arguably, as a matter of policy, house builders should consider broadband installation in all new build and larger scale renovation projects.

5.0 Work taking place across the sector

As mentioned previously, the RSL sector is undertaking considerable work to address digital inclusion

barriers. The following are examples of the type of work that is currently taking place across the sector:

5.1 Examples within the RSL sector in Wales

RCT Homes RCT Homes is piloting low cost broadband in Rhydefelin. The project builds on the organisation’s own utilisation of microwave technology via Tower sites throughout the Rhondda Cynon Taf valleys for their own Wide Area Network. They have used a 4G technology to connect into their housing community and then re-broadcast a dual SSID Wi-Fi network. The pilot is delivering to over 50 tenants a guaranteed 2MB connection with a low contention ratio. Access is also provided out in the street for staff and other partners with the correct security credentials. With the trend being towards mobile device usage (e.g. tablets) a Wi-Fi network is a must. The plan going forward is to replicate this in all of their estates, providing access for up to 6000 tenants, to support digital inclusion and provide Wi-Fi access. The cost per connection is currently running at £11 per month. RCT Homes also runs a digital inclusion project with a number of partners, including local libraries, Older

Persons 50+ Forums, Communities First, Communities 2.0 and Day Centres, which form a steering

group to deliver the project with RCT Homes. Digital officers have provided training and support to over

700 people, tailoring the support provided to the needs and confidence of the individual.

Charter Housing

Over the past decade, Charter Housing has recognised the importance of digital inclusion as a vehicle

for improving service delivery as well as increasing the well-being of tenants. A dedicated digital

inclusion officer provides workshops and individual sessions to tenants and advice on affordable internet

access and IT equipment. Support is provided for tenants in sheltered schemes through ‘i-tea and

biscuits’ coffee mornings and an internet café in Newport is open to all tenants.

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Charter Housing has also explored delivering community Wi-Fi schemes. Barrackswood, Newport is a

small compact estate in the middle of Newport. About 6 years ago Charter Housing and the Scarman

Trust installed a residential broadband line into a community house, mounted a Wi-Fi node on its roof

and made the broadband signal available free to the entire estate. Although the broadband capacity is

small by modern standards it has continued in use with practically no maintenance needs throughout the

intervening years. When inadvertently switched off by a contractor, its absence prompted a flurry of calls

from residents. On-going rental costs are just £40 a month and, in the setup, the most expensive item

was the scaffolder.

Digital Merthyr

Based on a model used in Spain, Merthyr Valleys Homes is prototyping the design, installation and

development of its own community-led network – moving from LAN (Local Area Network), to WAN (Wide

Area Network) then WWW enabled (World Wide Web), with a view to scaling to more than 4,000 homes.

The pilot will be free to those living within the Gellideg estate which is one of the most deprived areas in

Wales. Nodes are attached to households, allowing users to share the connection between them,

therefore dramatically reducing the costs of broadband. Digital Champions have been recruited to

provide digital literacy training and maintain the network so that tenants have an on the ground point of

contact if they have any queries. The pilot is currently in progress and will be used to identify an

approach to up scale the network across Merthyr to all householders, regardless of tenure.

Melin Homes

Getting Connected was a digital inclusion project that provided 300 PCs to tenants in the communities of

Torfaen and Blaenau Gwent. Project officers delivered support to participants to help them online and

signposted new learners to adult education and a range of online facilities. The Digital Hub was also

launched during the project which is the state-of-the-art IT training facility that delivers both Microsoft and

CISCO training and offers an extensive range of courses. Affordable broadband will be piloted in a small

confined area but a scaled solution has yet to be realised.

Sketty Park Online and Get NPT Online

Coastal Housing Group’s Digital Inclusion work is based upon a collaborative approach with Schools,

Voluntary Sector, Churches, Libraries, Community Centre Groups, Housing Associations and various

Local Authority units.

Their Digital Inclusion projects have helped residents and others from across Swansea, Neath and Port

Talbot to gain the skills and confidence to use IT and internet. The project promotes local resources such

as libraries and communal facilities, and uses a basic “5 Step” approach to get people online – using

internet browsers, internet security, setting up an email, sending email attachments and filling in forms.

The collaborative approach amongst organisations from different sectors has proven to be an innovative

model for a partnership approach to tackling digital exclusion. Successful engagement with target groups

has been achieved because of the partnership, and creates the possibility to align delivery to different

learning needs.

Wales & West Housing The fundamental principle Wales & West Housing operate in tackling Digital Inclusion is to provide residents with access to the Internet in their own homes. Two pilots were run in Merthyr Tydfil and

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Prestatyn which provided valuable learning that has shaped plans to deliver a full scale project for around 2,500 residents across Wales. The solution uses Meraki wireless access points to provide a network connection for residents in over one hundred sheltered schemes across Wales. The Meraki technology allows Wales & West to configure and support the network from a central location, reducing the support costs to a level where they are able to offer the service free of charge to residents. Learning from the pilots has clearly shown that technical installation needs to follow with face to face support and training. The pilots worked with Communities 2.0 to provide residents with onsite lessons in using computers. Wales & West plan to continue to do this but have augmented this training by partnering with British Telecom Digital Champions and the Transformation Trust to encourage secondary school students to spend time with residents showing them how to access the Internet and use Facebook, Twitter and Skype. Positive discussions with the Duke of Edinburgh awards scheme to include volunteering as part of their award schemes is on-going. Wales & West are also looking to provide training and possibly apprenticeships for young people. They will learn skills in wireless technology and receive coaching and mentoring from BT Openreach engineers. They will install and support the wireless network and this will provide them with opportunities to start careers in this field. Monmouthshire Housing Association (MHA) MHA started its digital inclusion work in 2010. The initiative was called the MHA’s Computers in the Community schemes. The aim of the initiative was to promote digital and economic inclusion, offering specific support to working age tenants and older tenants to help get them online and remove the affordability barrier. Partnering with a local computer recycling firm, MHA sought to bulk buy a number of recycled laptops which it would provide on a free loan basis to tenants. Working age tenants were offered a free laptop to use in the comfort of their own home to search for jobs and complete CVs, jobs applications and training courses. Providing tenants completed their further course or engaged with the employment scheme, laptops were after a period of time signed off and given to the tenants to keep and loan agreements were terminated. To date, MHA has enrolled tenants on over 75 courses (in addition to the 3 pre-qualification ones) and has helped 13 tenants gain employment. Older tenants in sheltered schemes were invited to communal lounges to complete introductory courses and again were offered free laptops. A community hub was developed in one local sheltered scheme where older tenants now mentor each other to get online. The scheme is equipped with Wi-Fi and a recycled laptop and is open to all residents residing at the scheme. Over 100 laptops have been offered to tenants, removing the cost barrier for the kit. Outcomes for older residents have been social inclusion, saving money online via switching and shopping online. For working age tenants, outcomes have been lifelong learning and economic inclusion in terms of jobs found as well as online switching and using online shopping. 5.2 Examples within the RSL sector in the UK

Longford Online

Social Telecoms Community Interest Company is partnering with Golden Gates Housing Trust (GGHT)

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to deliver a free internet service to a group of their key stakeholders living on an estate in Longford,

Warrington. The solution delivers Wi-Fi access into homes and provides tenants with Android mini-PCs

which turn televisions into a large tablet computer. The project will enable tenants to experience the

internet without having to purchase a home computer. Using Digital Deal funding, the estate-wide Wi-Fi

network will be provided to residents free of charge.

Rooftop Housing

Social Telecoms, Procurement for Housing, Rooftop Housing and Trent and Dove will commence a new

pilot in Evesham this winter. Following a lack of interest from existing ISPs to offer an affordable

broadband deal, the partnership set about developing their own service. The pilot will offer households

broadband, line rental and free weekend calls for £15.45 per month. The actual cost of the package is

£20 per month but the shortfall will be subsidised by Rooftop Housing in the short term with the

expectation that the profit from calls generated will make up the deficit in the long term. As the success

of the pilot is dependent on householders making telephone calls, the tariff is only available to those that

already have a telephone landline. The agreement will be formed directly between the tenant and Social

Telecoms and not with the housing association. The pilot will be closely monitored and checked to

ensure that it is self-supporting. Once the economic viability of this rate has been confirmed, PfH would

look to make the rate nationally available.

Glasgow Housing Association

More than a hundred households in a Glasgow Housing Association (GHA) multi-storey will be

connected to the internet as part of a new affordable technology project. GHA has teamed up with the

Scottish Government and BT to give tenants in a block in Knightswood affordable Wi-Fi access. It’s the

first large-scale Scottish project of its kind and is believed to be among the first in Europe. The trial

project will see each of the 138 homes in the GHA block offered a new tablet to connect to high speed

Wi-Fi access points throughout the building, linked back into the main BT network via a single fibre

cable. Tenants will be able to connect to a range of beneficial services such as telecare, telehealth and

smart-metering, as well as future online welfare services. These measures will also bring increased

efficiencies for Glasgow Housing Association as tenants and housing officers will be able to link to

internal systems to report and manage faults, pay and process bills, download bills and complete other

business. The long-term aim for GHA is for every one of its homes to have internet access.

5.3 Examples of technical solutions

Cardiff and Newport Super Connected Cities

The Super Connected Cities programmes in Cardiff and Newport are investing millions of pounds on

infrastructure to make them exemplar cities in digital technology. The projects aim to make ultrafast

broadband more accessible to small and medium sized enterprises (SMEs) through a voucher scheme

in which funding of up to £3000 per SME can be used to cover the cost of an initial connection fee.

Delivery will be completed by a registered provider who will look to provide the most suitable connection

to the business premises, e.g. Fibre to the Premise (FTTP) or a wireless solution. In addition, Cardiff are

developing 4g infrastructure across the city and public Wi-Fi infrastructure to key areas of the city centre,

including public buildings, schools and buses by March 2015.

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5.4 Lessons learned

Knowledge and capacity

There are proven solutions to suit all types of housing in different types of location. However, where

RSLs have taken the initiative, they have struggled to gain an understanding of what suppliers are out

there, the full range of technical options, and an understanding of whether they will get value for money.

In addition the market is dominated by a small number of large scale suppliers which tends to mask

other better suited options. There is a wide range of small scale suppliers in existence, although their

identity and spheres of expertise are not widely known. There are also capacity issues for many smaller

suppliers if asked to scale up and care needs to be taken to test this and avoid problems of overstretch.

Advice on the services provided by suppliers and a menu of solutions and equipment set up options

would aid the development of these schemes.

Cost

RSLs have not yet fully developed the business case for the benefits of tenants having more affordable

broadband. One or two in isolation have progressed this but underlying lessons remain to be shared.

Where schemes have progressed they often make use of grants or underwrite charges to take the risk

off the ISP in order to provide a free broadband service to tenants. The ability to offset some broadband

costs within service charges and incorporate them in housing benefit remains contentious. Tenants’

willingness to pay for supply seems to vary considerably. In the survey work undertaken by the Task and

Finish group, some RSLs reported that tenants are happy to contribute, others that tenants will only

accept a free service. Some also reported that other tenures would like to be included in schemes.

Technical support Even when services are free, tenants still expect there to be as little disruption as possible. For example, a free WiFi service provided by Wales & West Housing recently caused uproar amongst residents when the service did not go live on the expected date. Complaints tend to be routed first to the RSL even if they should go to the ISP. This has implications for RSLs being able to guarantee ongoing support capacity. Existing RSL schemes seem heavily reliant on the availability of an individual. Support capacity is very thin and can vanish in the absence of that individual. Engagement Persuading tenants to see the advantages of, and engage in, schemes is not easy and requires carefully planned demand stimulation during the roll out of broadband schemes. In addition tenants often want, and need, more than broadband. They need help with sourcing equipment, gaining the skills and confidence to use it and ongoing support when things go wrong. Some RSLs are developing niche areas of expertise on these areas which could be made available to other RSLs and may form the basis for developing social enterprises as a vehicle to do so.

6.0 Interventions

6.1 No one size fits all solution There are a number of steps in the process of getting broadband to tenants and each of these steps presents a possible point for intervention. Whether the intervention is by RSLs individually, collectively or through an arm’s length or community organisation or simply commissioned is something yet to be decided. This section briefly describes the intervention points and the pros and cons of doing so at this point in time.

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6.2 Types of Interventions Step 1 Sourcing broadband to an area One of the major drawbacks to undertaking any communal schemes in Wales has been the lack of access to a decent source of broadband from key suppliers in many areas. Getting a decent supply from the nearest source, even if only a few miles away, can involve a prohibitive initial outlay in cost for cable, fibre or Wi-Fi options. 3G coverage remains problematic in many parts of Wales and there are technical and cost issues with both 3G and satellite options. The examples that currently exist have tended to make use of all these options for sourcing broadband. The choice is usually governed by availability or lack of it in the case of fibre, copper, cable or 3G infrastructures with 4G expected to cover 95% of indoor Wales by 2017. The “Superfast Cymru” roll out should mean that within a few years the problem of sourcing should become a historic one. Any attempts to increase access within parts of the whole social housing estate could set its own prioritisation of location and supplier to reflect and take advantage of “Superfast Cymru”. In future there should be no need for RSLs to consider supplementing the core infrastructure to bridge the gap between source and housing location. Step 2 Distributing broadband within a given area or type of accommodation Given that almost all stock locations should be close to and have access to decent broadband speed and bandwidth, through a fibre connection, the next question is how, and in what form, could broadband be parcelled up to make it more attractive and affordable to tenants. It is clear that many different end user solutions will be required and we know that the technical solutions exist and can work well. The examples in Section 5.1 and lessons drawn in Section 5.4 indicate that a degree of expertise is required in matching solutions to a set location and type of housing. Given, however, that the knowledge of the range of technical solutions and the capacity and value for money of different suppliers is so complex, it is difficult to envisage individual RSLs (let alone groups of tenants) having the capacity to acquire and remain up to date in the complex range of offerings. Some form of brokerage or advisory function is required. Becoming a distributor (or ISP) responsible for infrastructure maintenance, pricing, revenue collection, storage of data and records etc is a major and complex step and has huge cost implications as well as technical demands. It is much easier to work with existing ISPs within a competitive framework where they compete against each other to undertake the work on behalf of RSLs. Again the lessons outlined in Section 5.4 suggest that this is another situation where RSLs would benefit from a broker between them and the ISPs. Organising this will be revisited in Step 4. Step 3 Demand stimulation product range To stimulate interest, the right products are needed to offer tenants. The examples and lessons set out in Section 4.2 and 4.3 indicate that tenants will have different requirements to be met if they are to take advantage of any initiative. Some will only want broadband provided and to varying degrees of bandwidth and speed depending on how they propose to use it. This suggests a number of basic broadband offerings within a menu. Besides broadband, it is apparent that some will want other products such as help in sourcing differ sorts of equipment to use the broadband, including devices. This could take the form of simple advice on where to source these or a more proactive brokerage of supply with preferred suppliers or bulk purchase schemes. Other tenants may also want assistance in learning how to make the best use of their equipment and broadband. There is scope for a “training” and/or servicing support element within any menu. If the product range is correct, and can continuously evolve over time, the next challenge is how best to recruit and sign up tenants to join. This could be something left to ISPs to do, but is more difficult if they only individually offer part of the product range and unlikely if the cost of marketing is not reflected in

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take up. Even so, it would probably be more costly to undertake than if undertaken by an organisation already operating on the ground with tenants i.e. an RSL or tenant body. Many locations have more than one RSL involved. It may be better if the demand stimulation were done by an organisation acting on behalf of RSLs which would design and oversee the approach whilst utilising RSL staff in situ for initiating contact with tenants. Of course, services offered do not have to be confined to RSL tenants; they could be expanded to tenants of private landlords, owner occupiers and SMEs at a differential rate that could subsidise costs. Similar options could be offered to public services such as social services or health, enabling staff to utilise broadband within the community to enhance their work efficiency. Step 4 Ongoing support and crisis management There are two issues to consider with regard to on-going support 1) with problems in the basic infrastructure and architecture of the service and 2) those that result from problems resulting from equipment failures in kit such as laptops or errors caused by tenants’ lack of experience or skills. Whilst the former can only be fixed by the ISP provider, the latter will depend on who provides any agreed extras like equipment or training or support. This will come down to the agreements arising from the product marketing but the examples in Section 5 suggest that even if it is an ISP problem, tenants are more likely to seek out their RSL. Any scheme is likely to generate considerable expectations, whether agreed beforehand or not, on the RSL. Even in schemes where broadband has been supplied free of charge it is evident that once in place it will carry expectations of service continuity and speeds. Tenants complain of any service break and expect normal service resumption as quickly as possible. Whilst we need to ensure that any ISP can respond speedily, we also need to recognise that a trouble-shooting function for the RSL involved becomes inevitable, despite any pre agreed roles. Some RSLs are relatively small organisations, and few could manage and resource a troubleshooting function with the skills needed to respond within expected timescales. Even the largest RSLs would struggle to manage 24-7 support, especially as demand upon it is likely to be intermittent or dormant for long periods. Such support services tend to benefit from, and are more cost effective, from scaling up, suggesting they would be better delivered by RSLs banding together. The same issues are present for any ISPs commissioned and although smaller ISPs offer some very innovative solutions, they would need to demonstrate their capacity to respond. Step 5 Communal management The whole question of obtaining affordable and adequate broadband could be left to pure market forces whether encouraging individual or groups of tenants or tenant support organisations to approach commercial suppliers, or inviting (and assisting) commercial suppliers to solicit tenants. It is unrealistic, given the complexities of choice experienced by individual RSLs, to expect tenants to consider any other than the most common options provided by the main suppliers which remain unaffordable. There are some examples of large suppliers offering “innovative” solutions allowing line sharing but these rarely live up to the hype and remain expensive. The second option is for the RSL to intervene in the market as some of the examples in Section 5 demonstrate. In most of these cases a deal is struck between an ISP and the RSL. A number of the examples involve the RSL providing a free service and bearing all the costs – commonly with grant aid to pump prime - whilst those where charges are made sees the RSL acting as a “guarantor” for any default. In these circumstances, the position of the RSL is weak and it is they and not the ISP that carries any risk – both financial and for service continuity and expectation. A means is needed to ensure that RSLs have the expertise to source, and negotiate, with the multitude of suppliers, choosing horses for courses to get the best technical solution at reasonable cost. That means redressing the balance of relationship between RSL and supplier. The most obvious means to do

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so is to use the collective bargaining power of RSLs, which could be considerable given the number of tenants in Wales, and to combine and share resources and expertise. The latter would include a repository of knowledge based on common experiences, and the pooling of resources for the support element.

7.0 Recommendation It is evident that there is no single solution that all tenants could access to obtain affordable broadband. Interventions are available for RSLs to implement affordable broadband schemes for tenants but there is no one size fits all model so a framework is needed to help RSLs determine this and arrive at their own bespoke rationale. Suitability depends on the priorities of the individual RSL, their capacity to deliver and the composition of the housing stock. The significant time and expertise required for RSLs to explore and undertake these options makes this route unviable for most organisations unless external support is acquired. This report highlights: 1) Intervention is required

Our research identifies that there are over 214,000 digitally excluded social housing tenants in Wales.29 Scaled intervention is needed to address this so that tenants can benefit from using the internet to claim their Universal Credit online. Intervention is required from RSLs because there are no affordable commercial packages available.

2) Digital exclusion is a severe issue in the social housing sector

Digital exclusion is a widespread issue causing social inequality, impacting on social wellbeing, education and skills, health, infrastructure and employment. In order to overcome digital exclusion a holistic approach is needed.

3) Affordable access within the home is a priority

Affordability is a significant access barrier due to the high costs of home broadband, relative to the limited income of social housing tenants. Thirty two per cent of those not online cite high equipment or access costs as the main reason for not accessing the internet.30 We also know that accessing the internet from the home is the preferred method of using the internet.

4) RSLs can pursue affordable and adequate broadband for their tenants

There has been increasing recognition of RSLs’ role as catalysts in regeneration activity, especially in some of the most deprived communities. The sector recognises the severity of digital inclusion and is assisting tenants with getting online. Given RSL presence and engagement with communities, they are well placed to provide affordable broadband and there are examples across the UK of RSLs utilising their role and piloting schemes for tenants.

There are a variety of interventions available as described in section 6, although the option to become an ISP is generally considered as an unviable option, given the risk to the RSL and the high associated costs. RSLs may choose to work together to develop new broadband schemes in order to achieve economies of scale and greater bargaining power, or they may prefer to explore individually.

5) Lack of capacity and expertise to deliver

There is a lack of capacity within RSLs to identify the most suitable intervention. The majority of

29

Community Housing Cymru, Digital Inclusion RSL Survey, 2013 30

Welsh Government, Digital Inclusion: Analysis Package, 2011, p.17

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RSLs employ less than 1 full time digital inclusion officer. There is also a lack of external expertise available for an RSL to seek independent advice. Capacity and expertise is needed to identify the most viable intervention, develop a scheme and, if necessary, commission services from existing organisations.

Recommendation: We recommend that a new entity is created to provide the support needed to assist RSLs with developing affordable broadband schemes for social housing tenants. Project Aim

The project would provide expertise to RSLs to assist them with developing new affordable broadband schemes for tenants in readiness for the national roll-out of Universal Credit in 2017. Specialist advice to this sector is the key to the project (and currently absent) yet essential to utilise the capacity of RSLs to develop these schemes.

The project would provide specialist advice to one or more RSLs to identify the most suitable intervention to provide tenants with affordable broadband in the home. In order to ensure that all social housing tenants are included, RSLs partnering with stock-retaining local authorities will also be able to receive support. It could also broker relations with ISPs and provide additional advice and support in terms of accessing other sources of funding to help towards these costs. A package of support would be tailored for the specific needs of the organisation, which may include support from one or more provider of skills, infrastructure or hardware (Chart 3). The project will primarily focus on developing affordable broadband schemes; however, skills, access and motivation barriers will also be overcome through partnership working and the commissioning of relevant organisations in order to provide a holistic approach to digital inclusion. Chart 3: Project delivery The project would provide the following services to assist RSLs with developing affordable broadband schemes:

Use experience and knowledge acquired from existing pilot schemes in order to scale up best practice and build upon the work of the sector.

Skills e.g. Communities 2.0

Hardware e.g. computer recycle

companies Infrastructure

e.g. ISPs

Expertise

Support to Registered Social Landlords

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Advise on the various options available to each RSL or a group of RSLs looking to work together to

achieve economies of scale.

Advise on start-up funding opportunities and scheme management.

Leverage goods and services from suppliers, acting as an intermediary broker.

Commission organisations to support RSLs with training, hardware and on-going support.

In addition to the creation of new affordable broadband services, the project would:

Maximise procurement opportunities to develop and support local jobs and training and procure local

suppliers.

Improve affordable broadband infrastructure.

Reduce social inequality.

Improve tenant opportunities and wellbeing.

Avoid tenant arrears.

Sustain tenancies.

8.0 Opportunities and Funding We anticipate that the project would be a three year pilot commencing in April 2014 with the services available to RSLs that operate across Wales. The fixed term project would support RSLs to develop affordable broadband schemes over the three year period in readiness for the anticipated national roll-out of Universal Credit in 2017. 8.1 Funding Following the development of a comprehensive business plan, an injection of funding would be sought for initial start-up and project delivery over a three year period. Following the pilot, there could be opportunities for the project to develop into a self-sufficient social enterprise through expanding to the delivery of a consultancy service to the public and private sector. The pilot will also be used to identify any other gaps in services which could be taken on by the project at the end of the term and to take into account the inevitable changes in the technological landscape as products and services evolve. The affordable broadband schemes would be developed to be self-sustaining, therefore only requiring initial start-up support from the project. Potential funding opportunities for project start-up and delivery:

- Investment from Welsh Government - European Structural Funds - Match funding from Registered Social Landlords

Potential funding opportunities for broadband scheme development and delivery:

- Subsidy from Welsh Government - Superfast Cymru or Broadband support scheme - European Structural Funds - Jobs Growth Wales placements - Investment from Registered Social Landlords

8.2 Implications of Recommendations The outline recommendations, if accepted, lead naturally to Phase 2 which would see the detailed development of delivery structures, Governance models and associated costs involved in set up and on-

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going management. The eventual Governance will evolve during this Phase 2 and is likely to involve some combination of Welsh Government, Community Housing Cymru and a number of interested RSLs. However an interim Project Sponsor needs to be identified urgently to accept ownership, to confirm the acceptance of the recommendations and to provide a single point of accountability for any task group undertaking the Phase 2 work. The Project Sponsors would ensure key stakeholders would be represented on a Project Steering Committee which would oversee the next phase of development through identifying key milestones from the outset and set a framework for those involved in a Task Group completing the detailed plan and its costs. One of the first steps would be to identify the degree of “buy in” from RSLs to these recommendations, their preferred options and the role they want to play going forward. This may prove difficult to do with any certainty, for a crucial question that has yet to be answered is the degree to which potential Project Sponsors are willing or expected to share any portion of costs in the future and for how long. This discussion has so far been avoided but is clearly in the background when trying to determine levels of “buy in”. Until some clarity is provided any future “buy in” will continue to be conditional and that makes business planning and financial projections, by a Task Group, very hard to make. There are a variety of tasks to be undertaken to provide affordable and acceptable levels of broadband, some of which can be done within individual RSLs, some in partnership and some by organisations acting on their behalf. 1. Setting up a Social Enterprise to provide a focal point for advice. There was much support for

this idea. The main function of this new organisation would be to act as the central repository of

expertise able to advise RSLs on the best local solutions to suit their needs. It would broker

relationships with ISPs, identify the best and most cost effective technical solutions and look to

develop bulk purchase of equipment and evaluation the outcomes, as well as keeping abreast of

technical change. The Governance relationship to CHC and individual RSLs would need to be

worked out, depending on the levels of support for the idea and amount of commitment to make it a

success. It would require only a small team to fulfil this role.

The question of how to fund this both in the short and longer terms will need to be resolved. In the longer term it may be desirable to be self-financing but whether this is based on a membership fee, a levy on RSLs, a WG subsidy, charges for services or some form of precept on broadband delivered is open to debate and some analysis of a business case. Any such organisation, if the intent is to become self-financing, will require support until it reaches a break-even point.

2. Setting up a Social Enterprise to manage on-going technical support. There was also much

support for a new organisation to manage the burden of providing technical support and advice when

problems occur as they inevitably will. This crisis management role was felt to be too much of a

burden for individual RSLs and not cost effective individually. It was felt that this type of service is

better delivered centrally through specialist teams based around Wales, managed by one

organisation.

There are a number of ways in which this could be financed and decisions to be made for the long term on whether it has to be purely financed through a charge to customers (call out or a continuous revenue charge) or an element of subsidy. Whatever the preferred longer term business model,

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there will be a period before it reaches the preferred means of finance and will require a subsidy whilst it gets established and builds to a break even position. Recommendation 1 and 2 could be separate or part of one organisation.

3. Setting up Social Enterprises, subsidiaries of existing RSLs, to manage the installation of

technical solutions. A number of existing RSLs are already showing an interest in setting up their

own subsidiary SEs, working alongside appointed ISPs to undertake the installation of broadband

solutions within tenants’ homes and community venue. The ISP provides the source of broadband to

a local area by fibre or Wi-Fi and the RSL uses its staff to provide the home installation. This is a

relatively simple task to train staff and can generate local employment to do so. Advice on the best

technical solutions in a given situation, the preferred ISPs and the buying of equipment in bulk would

come from the new SE recommended in Section 1. RSLs vary in scale and it was felt that the

economies of scale are best delivered by banding together and using one of more of their number to

provide this service for partners. Realistically this would probably result in a number of regional hubs

developing with one RSL providing the service to others in the hub.

So far different RSLs have taken different stances on how to offset the costs involved and quite a number have chosen to run free pilots. Whether some will continue to provide such a subsidy or recoup all the costs remains to be tested. This is likely to depend on the different business case to be made by RSLs. However, setting up new organisations, and training a work force for such local hubs, will incur costs before they reach a break-even position. The scale of these set up costs and how these are to be covered, by whom, whether they are written off or perhaps recouped from future profits is yet to be decided. The other complicating factor, to be tested, is how comfortable RSLs are in “buying in” such a service rather than trying to do it “in-house”. It is possible some would prefer such a service to be provided centrally by a SE not owned by any one of them.

4. Creating the market The general feeling was that raising awareness, creating a market and

identifying local solutions was better left to RSLs to do themselves with some help on roll-out,

methods and branding from the Social Enterprise identified in Section 1. This could be done using

existing staff already interfacing and engaging with tenants. In many cases RSLs may decide to work

together and share resources to do so. If, as likely, new costs or extra staff are needed this would be

borne by RSLs unless they choose to recoup some of the costs through on-going revenue charges

for affordable broadband.

5. Training and Skills development for tenants. There was felt to be an on-going need for the

provision of training and support so tenants can gain the skills and confidence to make the best use

of their broadband and to improve their economic wellbeing and access to services. This could be

provided by individual RSLs or by hub partnerships or perhaps centrally on an all Wales basis.

Providing such a service would inevitably bring significant new costs. The consensus was that this

was too big a scale for RSLs to manage and that new budgets would have to be found – possibly

ESF, BLG or maybe from DfES or a combination.

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9.0 Conclusion Significant work has been undertaken by RSLs and organisations such as Communities 2.0 to address the skills and motivation barriers; however progress on access, particularly affordable broadband, has been left behind. It is estimated that 42,000 social housing tenants not online cite the costs of access and equipment as the main reason for not being online. Current broadband packages are not affordable to social housing tenants but affordable hardware is increasingly available. Whilst we welcome the Government’s continuing efforts to improve access to fibre broadband across Wales through Superfast Cymru, more must be done to improve the affordability of broadband for social housing tenants. Our findings identify that RSLs can develop new broadband services but the lack of skills and expertise within the sector is preventing progress. Our recommendation will address this gap, enabling RSLs to realise their potential and create new models which will drive down the costs of broadband making it more affordable for tenants. The end product will provide a more affordable option for tenants that already access the internet, and will be a more competitive option for those looking to sign up to home broadband for the first time. In addition the service will have wider social benefits, contributing to the wellbeing, health and skills of tenants through enabling them to benefit from using the internet. Although this report focusses primarily on interventions for affordable broadband we recognise that skills and motivation are also barriers to digital inclusion that need to be addressed holistically. For this reason the entity would look to leverage in services that are provided by organisations across Wales to assist RSLs with overcoming these barriers. It is crucial that the development and delivery of this new entity occurs as soon as possible. We urge Welsh Government to consider this recommendation as soon as possible in order to ensure that the outcomes of the project can be developed in readiness for the roll out of universal credit in 2017, when the majority of social housing tenants will require online access. An injection of funding from the Welsh Government is sought for initial start-up and project delivery over a three year period.

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Bibliography Booz and Company, “This Is For Everyone” The Case for Universal Digitisation, 2012 Community Housing Cymru, Digital Inclusion RSL Survey, 2013 Experian, Impact of 1:1 PC Ownership, 2012 E Crime Wales, www.ecrimewales.com NatCen Social Research, British Social Attitudes Survey, 2011 NHS Choices, Transparency, transaction, participation. Annual report 2012/2013, 2013 Ofcom, The Communications Market Report, 2013 Phoenix Centre, Internet Use and Depression Among the Elderly, 2009 PriceWaterHouseCoopers, The Economic Case for Digital Inclusion, 2009 UK Online Centres Foundation, Digital Engagement - Understanding Customers, 2011 UK Online Centres Foundation, UK Jobs and the Internet, 2012 Welsh Government, Delivering a Digital Wales, 2010 Welsh Government, Digital Inclusion: Analysis Package, 2011 Welsh Government, ‘Household has internet access, by tenure’, National Survey for Wales Internet Access Figures, 2013 Welsh Government, ‘Reason for not currently using the internet, by tenure’, National Survey for Wales Internet Access Figures, 2013