Superfast Broadband Delivery: Somerset

Rebecca Pow Excerpts

Tuesday 13th November 2018 Westminster Hall

[James Heappey (Wells) (Con)]

I beg to move,

That this House has considered superfast broadband delivery in Somerset.

It is a pleasure to serve under your chairmanship, Ms Dorries. I know the Minister is swimming in unfamiliar waters this morning, but I am very grateful to him for coming to respond to this debate.

The Connecting Devon and Somerset intervention area, or CDS, is the biggest in England, and it is connecting some of the hardest-to-reach communities in the country. CDS did not have an easy task by any stretch of the imagination, and it is important to say right at the outset that the purpose of today’s debate is not to beat up CDS for the Gigaclear contract unravelling as it has. In fact, rather than starting with criticism of CDS, I would like to pick out Matt Barrow, an employee of Devon County Council who has been working on the Connecting Devon and Somerset project since its beginning, and who has spent hours by my side in public meetings in village halls across my constituency. I know he has done it with many colleagues elsewhere in their constituencies, helping residents to understand the differences between fibre to the cabinet and fibre to the premises, the way that CDS is working and when they will get their broadband.

There is absolutely no shortage of effort or expertise at Connecting Devon and Somerset, and the organisation has all the right intentions to deliver the best possible quality broadband to the residents of Devon and Somerset as quickly as it can. The reason we have this debate this morning is that the Gigaclear contract, which was signed for the delivery of phase 2 of the state aid intervention, has not run to time. Indeed, at the very first check after only six months of its anticipated delivery, Gigaclear is already well behind and has admitted that it needs to relook at the programme for delivery.

There are three key areas for our discussion this morning. The first is the soundness of Gigaclear’s position. Can it actually deliver what it has said it can? The second is the continued case for state aid in some parts of Devon and Somerset. The market has changed over the last year or so, and commercial providers are now delivering fibre to the premises, which raises a question about the legitimacy of state aid in those circumstances. Thirdly, how can we get on with the final 5% of premises that are now awaiting connection?

[Rebecca Pow (Taunton Deane) (Con)]

I commend Connecting Devon and Somerset on the biggest roll-out of rural broadband in the country. A great deal has been achieved, but it must not be forgotten that many of my constituents, and indeed those of my hon. Friend, have been ill-served. They have waited all this time, but nothing has been delivered. It has been a catalogue of incompetence and things that have arisen by the way, and many of my constituents are still not receiving broadband. The most important point in all this is that we resolve it as quickly as possible.

[James Heappey]

I think my hon. Friend means that nothing has come yet as a consequence of the phase 2 contract, and she is absolutely right. The phase 1 contract, which was a fibre to the cabinet deal, is now complete in its delivery. Tens of thousands of homes and businesses in my constituency have benefited from that, and I am sure that my hon. Friend has seen the same in hers. She is absolutely right that we are more than six months into the delivery window, and it has been over a year since the contract was signed. Not one constituent of mine is a Gigaclear customer yet, and I know from my hon. Friend’s intervention that it is the same in her constituency, too.

Gigaclear’s position is what it is because they were supported by the Carillion group, which met its demise. I think it is now clear that Gigaclear has quite inexplicably failed to understand that a lot of roads in Devon and Somerset are single-track lanes, which require somewhat more endeavour to dig up and somewhat more planning around road closures—it is not possible simply to go down one side of the road or even on the verge to the left or right.

I am inclined to agree with some of the comments from the county councils. There was overconfidence on the part of senior management at Gigaclear: they were telling the Connecting Devon and Somerset leadership and our county councils that all was fine, when it was obvious that things had not progressed as they should have. In the light of that, we need to ensure that what Gigaclear now says it is capable of doing is realistic. It has already overpromised once. As it seeks to put together a remedial plan to deliver the contract, we must ensure that it is at a realistic pace, so that, crucially, our constituents can have certainty about when their broadband will arrive. The Government, the Broadband Delivery UK programme and the county councils will want to be certain about the continued financial support that Gigaclear has secured.

I will raise some issues later that make the business case slightly less sound. It needs to be tested by BDUK and CDS to ensure that Gigaclear is still the answer, especially since the market has changed and commercial delivery is happening. When Gigaclear gets to communities as part of the state aid programme, it may well find that they already have fibre—it will have already been taken up. Gigaclear might not hit its uptake targets or realise the customers that it was expecting to. Now that Gigaclear is operating in a more competitive environment than the one that it negotiated when it took on the CDS contract, we need to look robustly at whether their numbers still stack up and whether we need to relook at the intervention area. In the briefing to MPs last week, which was the first indication that we had had of what the remedial plan would be, Gigaclear said that by the summer of 2020 it would deliver 40% to 50% of all that it had promised to have completed by 2020. That is a significant reduction in the pace of delivery, and Gigaclear now wants to deliver the remainder of the contract by 2022.

[Rebecca Pow]

On that point, is it not the case that the Government funding secured by Gigaclear needs to be spent by March 2020? One of the key issues is whether we could ask for an extension of the funding in order for Gigaclear to get its house back in order and to roll out the new, proposed programme that they are suggesting to us.

[James Heappey]

My hon. Friend is ensuring that the Minister gets the message loud and clear, because that is one of the key questions for today’s debate. The remedial plan presented by Gigaclear already runs beyond the date that the Government have said that all available money for the delivery of phase 2 will be spent. Clearly, if Gigaclear’s remedial plan is accepted, the Government will need to be willing to extend the period over which the money is spent from 2020 to 2022. I hope that the Minister will be able to give us some good news on that.

Given that only 40% to 60% of properties that were due to be connected by 2020 will now be connected by that time, we might also look at whether we should offer a voucher scheme to people who now find themselves in the 50% to 60% that will not be connected, so that they can take some sort of interim measure themselves. We did exactly that for those who were going to be in phase 2 or in the final 5% when the phase 1 delivery programme was rolled out; we offered voucher schemes of £500, so that people could take interim measures within their homes.

The second issue is the ongoing case for state aid, which we have spoken about a number of times. When the delay in the Gigaclear delivery was first announced, I was straight on local TV and radio, and speaking to my local newspapers, because I was very, very cross. My expectation was that my mailbag was about to explode and that I was going to be contacted by hundreds, if not thousands, of very angry people who were concerned that the broadband they had been waiting for for years and they thought was just weeks away was actually going to be years away again.

The reality is that I have had hardly anything, and that makes me wonder why. If I go back to my former employment, there is a very important part of the military planning process. When assessing the orders to be given in order to achieve a mission, we keep asking ourselves whether the situation has changed, in order to make sure that we are not problem-solving against a situation that no longer exists. I have come to realise in the last few weeks that the reason why so many of my constituents have not been in touch with me about the Gigaclear delay is that they have sorted themselves out.

They have gone to Openreach and put in place a community fibre partnership, or they have gone to companies such as TrueSpeed or Voneus that have cell-to-build business models. Those companies go out into communities and engage, they get 30% sign-up and then draw down the money from Aviva, which underwrites the delivery of the infrastructure, and they build the fibre into those communities. When the Gigaclear contract was delayed, there was complete silence from all those communities that were flashing red on the whiteboard in my office as those which most urgently needed broadband. The reason is that the market is already providing, and has already provided, for a number of them.

[James Heappey]

My hon. Friend and neighbour is absolutely right: the market is delivering. Whatever the business model, and whether that is cell first and build second, I now have hundreds, perhaps even thousands, of TrueSpeed, Voneus and Openreach fibre-to-the-premise customers in my constituency—a situation that has been delivered through an open-market solution, within the area that the open market review had identified as requiring state aid.

A key question for the Government today is whether state aid is even legal in areas where the market has already provided. I am not sure that we should be using taxpayers’ money to subsidise the delivery of a competitor into an area where a commercial company has already set up. TrueSpeed is underwritten by Prudential. How absurd that we would be spending taxpayers’ money to subsidise the delivery of an infrastructure underwritten by one pension scheme while another, Aviva, has underwritten the money on a commercial basis without the need for taxpayers’ intervention. As the market has changed, we need to be very clear about whether we need to go back and look at the open market review again to understand where the market is now providing.

It is certainly the case that my constituency and those of my hon. Friends the Member for Weston-super-Mare (John Penrose) and for North East Somerset (Mr Rees-Mogg), of my right hon. Friend the Member for North Somerset (Dr Fox) and my hon. Friends the Members for Somerton and Frome (David Warburton) and for Bridgwater and West Somerset (Mr Liddell-Grainger) will benefit more quickly because TrueSpeed is working away from the transatlantic fibre link that lands at Weston-super-Mare. TrueSpeed has accessed that link to fibre and is fanning out from there. The delay in the Gigaclear contract is an opportunity for us to look again at whether the market has changed, and whether Gigaclear’s priorities need to be tweaked.

[Rebecca Pow]

My hon. Friend is making a very expansive case. On the point about extra funding and the money going to the different companies, I believe that Connecting Devon and Somerset has just received £5 million from the Rural Development Programme. I wonder whether we might push to see where that money is going to be spent and whether the Minister has any revelations to make about that. I believe it is for phase 2, and some of it is destined to go to Airband, Gigaclear and the various companies providing the different methods of rolling out the service.

[James Heappey]

My hon. Friend is an excellent pacemaker—she runs slightly in front of me. I am coming to that point, but it is very helpful for the Minister to hear such things twice.

There is another part to the point about the change in the market and whether state aid is relevant. There is also the frustration that communities feel when they have got themselves motivated to bring in an alternative provider, such as TrueSpeed, Voneus or Openreach, and when they have fibre to the premise already, and yet their roads are now being closed and dug up with their tax money to deliver something that causes huge inconvenience to them while it is being put in, and which they have already got. A number of communities have written to me not to criticise the delay in the Gigaclear programme but to ask, “Why on earth are you still digging up our roads and blocking off our village when we have already got ourselves sorted and we have got it? Can we not have our tax money spent on improvements to our junction or a new road or something else?”

I know that is not how it works, but it certainly underlines the case for reassessing the priorities that Gigaclear has been set by Connecting Devon and Somerset, so that Gigaclear focuses on areas where we know the market will not be able to provide over the next 24 months, rather than focusing on areas, as is the case at the moment with its early areas, that are in direct competition, particularly with TrueSpeed. I am not sure that that is the most effective spending of Government money.

As my hon. Friend the Member for Taunton Deane (Rebecca Pow) pointed out, we have been given extra money by the Government to look at further broadband improvement in rural areas. There is a real opportunity to take the money that the Government have announced—I know that the Minister will be enthusiastic to remind us of the vast sums of money that the Government have made available to Devon and Somerset—and to add it to the £5 million-plus already available in gainshare from Openreach from phase 1 of the CDS roll-out, and the substantial additional money that is still to come as part of that gainshare, and look at where that combination of funds could be used as an intervention to deliver the final 5%.

We know now, by definition, what the final 5% is, because phase 2 delivers everything but the final 5%, so surely we can deliver that final 5% concurrently rather than waiting until we have connected the 95th percentile to get on with connecting the 96th through 100th percentiles. It seems to me that the money is already available. The gainshare is coming onstream very quickly. We have a real opportunity to get the whole thing cracked in a few years by taking advantage of what the market is now providing.

In some ways, we have an embarrassment of riches, because in some parts of Somerset we now have two entirely independent fibre-to-the-premise networks being dug in on very remote rural lanes, which is a slightly absurd situation. In small communities such as Badgworth, Biddisham and Lympsham, people will soon end up being able to choose which fibre-to-the-premise provider they want to use—not the internet service provider, but actually who is going to put the fibre to their front door. I am not sure that that is actually what taxpayers’ money should be being used for.