Agenda item

Context:

 

To scrutinise the Draft Digital Deprivation Action Plan in light of the recent question to Council on the 7th March 2019, regarding what the Council itself is doing to address the issue of digital deprivation.

 

Key Issues:

 

The Select Committee received an overview of the Superfast Cymru Project from Ms. V. Collins, representing Welsh Government.  In doing so, the following points were noted:

 

·         The Superfast Cymru Project was let to BT Openreach in 2012.

 

·         The deployment phase of that project was completed in February 2018 which resulted in over 733,000 premises being provided with fibre to the Cabinet / fibre to the premises technology.

 

·         Within Monmouthshire, that provided around 80% of premises with either of these two technologies.

 

·         On completion of the deployment, an open market review was undertaken, which consolidated the data from all of the suppliers.  That commenced in February 2017 with the results being published in July 2017.

 

·         This allowed for the setup of the intervention area for the next procurement.  This went live in July 2017 and has been completed.

 

·         Three contract have been let with BT Openreach which were awarded towards the end of 2018 / beginning of 2019.

 

·         Welsh Government was disappointed with the response to the procurement. It established three lots and a budget in the region of £80M.  On two of the lots only one supplier came back, on lot 2 there were two suppliers and this was the lot that Monmouthshire came under. BT Openreach was awarded the contract having won the bid.

 

·         BT Openreach had indicated that it could deliver using £26M of the £80M.

 

·         The original intervention area was in excess of 90,000 premises and BT Openreach is providing access to a further 26,000 premises.

 

·         The procurement will result in an additional 1000 premises in the Monmouthshire area.

 

·         Further key issues are outlined in the report.

 

Member Scrutiny:

 

·         With regard to a question raised - For every 1% increase in the connectivity in the 12.5% that are not currently connected what impact will that have on the Welsh economy?  The Welsh Government representative stated that she would take this matter back to Welsh Government for an answer.

 

·         There is a need for Welsh Government to support South East Wales with a view to encouraging and supporting businesses in the region. The Welsh Government representative stated that she would take this matter back to Welsh Government.

 

·         The Welsh Government representative informed the Committee that BT Open reach has considerable city fibre projects currently underway.  Therefore, its focus is not necessarily on the rural regions of the Country.  Therefore, it is difficult for Welsh Government to get BT Openreach to deploy in the very rural areas of the Country.

 

·         Welsh Government has capital funds equating to £80M. Only £26M of the £80M has been used. Via the Superfast Cymru Project, the Welsh Government obtains clawback based on the take up of the broadband. Welsh Government is anticipating £50M back from the Superfast Cymru Project.

 

·         However, there are concerns regarding revenue funding.  In particular regarding lack of internal resources available.

 

·         With regard to the Rural Community Development Fund (RCDF), it was noted that one grant had been approved which has now been completed. 400 premises have been connected at a cost of £90,000.  Therefore, premises, compared with fibre is a cost effective way of providing connectivity.  However, it is acknowledged that there is a requirement to get fibre to all, over time.  A further application has been submitted to Welsh Government before the RCDF programme is closed. Further details will be available in May 2016 with regard to whether the application has been successful or not. This is valued at £160,000 but it is intended to lever at least 30% - 40% from whoever is selected as the partner. There is potential for a further 600 properties, via the rural element of Welsh Government.

 

·         It was identified that capital funding could be considered to fund research and development with a view to Welsh Government and Monmouthshire County Council working together in respect of this matter.

 

·         There are areas within Llanelly Community that have no broadband connectivity.  BT Openreach has benefited significantly from the works that have been undertaken along the dualling of the A465 at this location. However, there are 40 residents in this location who have been quoted £90,000 to connect these properties via BT Openreach, which equated to £2000 per household.  This matter had been raised with Welsh Government in January 2019. The Welsh Government representative informed the Committee that the first Superfast Cymru project had a target of reaching at least 90% of the intervention area.  BT Openreach succeeded in achieving this figure but it was not told to go to particular areas within that project due the size of the project.  Within the second procurement, Welsh Government incentivised BT Openreach to go to more rural areas. Unfortunately, the area in question was not chosen as a site for BT Openreach.  Welsh Government’s grant scheme can help in this situation whereby, residents could apply for a grant up to a maximum of £5000 per dwelling.

 

·         The Rural Programmes Manager informed the Committee that he had met with the community council and residents.  It was noted that the residents had not been put into the target premises for the new roll out as it had been assumed that there was already a provider in the area. However, that provider was no longer in service.  This is why some residents in that area had not been included in the next roll out. However, Welsh Government will be undertaking an open market review that should bring all of those properties back into consideration. Connections could be available in this area within the next three years.

 

·         In response to a question raised regarding the use of other suppliers, it was noted that Welsh Government has held a number of supplier engagement days. Only one bidder on two of the lots came forward with two bidders coming forward for lot 2.

 

·         With regard to funding, for the original project, there was European, UK Government and domestic funding provided. For the new procurement, there is a small UK Government input with the remainder of the funding coming via European and domestic sources. This equates to in the region of £26M European funding.  Domestic funding plus clawback from the original project equates to a figure of around £50M - £60M.

 

·         In response to a question raised regarding Brexit, it was noted that funding is currently guaranteed and Welsh Government has secured an additional £30M of European funding.

 

·         The original contract was large scale.  The most recent contract involved supplier engagement and their preferences were asked for.  In response to feedback, the procurement had been split into the three lots. The response across the UK has been similar to the responses received by Welsh Government.

 

·         Welsh Government is working with smaller suppliers via the grant schemes encouraging them to roll out infrastructure.

 

·         With regard to the funding shortfall, Welsh Government is looking at exploring options both within Welsh Government and with local authorities with a view to spending this money.  However, this process is still in its early stages.

 

·         With regard to the procurement, there has been a delay in the process which is mainly due to the clarification process with bidders.

 

·         Superfast Cymru 2 list of premises – Targeted premises 1581, all of these will be fibre to the premises.  The Welsh Government representative will investigate whether this data can be made available to the Select Committee.

 

·         The Universal Service Obligation (USO) will cover Wales as a whole as broadband is not devolved to Wales.  However, this will be on a request basis via a premises or community.

 

·         The UK Government has a policy that by 2033 the UK will be covered by full fibre broadband.  Welsh Government’s aspiration is to work with the UK Government and local authorities to ensure that this target is met.

 

·         In response to a question raised regarding resources, it was noted that this is an issue across Wales. Investigations could be looked into regarding capitalising some of the funding to address this matter.

 

·         The Access Broadband Cymru grant is currently being reviewed and the process for delivering this is becoming more automated. In the near future Welsh Government anticipates that it will be able to cope with the increased number of applications coming through the system.

 

·         Welsh Government has a very good working relationship with Monmouthshire County Council. However, it was noted that both authorities would benefit from having additional revenue funding but it is acknowledged that this is difficult to obtain.

 

·         In response to a question raised, the Welsh Government representative stated that she would make enquires regarding whether the Authority might be able to borrow from the loan boards which could then be recouped when the deployment has taken place.

 

·         In response to a question raised by a Member regarding lack of broadband provision for a resident within his ward, it was noted that there was potential for the resident to investigate a 4G solution to his broadband issue. This solution could be used by other residents who are not on the current fibre roll out.

 

·         A dedicated staff resource will be required to take forward and manage the current strategic opportunities. Any job specification will be subject to job evaluation.

 

·         Discussions were being undertaken with Welsh Government with regard to taking a regional approach, as this could be a mechanism for unlocking the required revenue.

 

·         The bid for local full fibre network will take some time to deploy where there is funding in the sum of £10M available between the local authorities involved.  This will support capital assets such as schools and other public buildings.

 

·         There is a further bid coming forward, specifically regarding rural areas, known as Inside Out, whereby, a further £200M from Central Government will be available to access.

 

 

Committee’s Conclusion:   It is clear that Monmouthshire is lagging behind with regard to Superfast Cymru broadband provision.   ·         There is an issue of deprivation within the County.    ·         It is critical for our economic future and the broadband provision gap needs to be closed as quickly as possible.   ·         Monmouthshire needs to be enabled. Superfast Cymru 2 is not going to realise remaining capacity.  Therefore other options need to be investigated.  Monmouthshire County Council needs to be an enabler to provide this service.   ·         A dedicated staff resource has been identified to bring this to fruition.   On behalf of the Select Committee, the Chair thanked the Welsh Government representative for attending the meeting and answering questions put to her by the Committee.   We resolved the support the draft Digital Deprivation Action Plan and recommended that the report be presented to Cabinet for adoption.