Wednesday, 20 June 2012

Lancashire County Council's rural broadband subsidy - A recap

There seems some media interest in Lancashire County Council's rural broadband subsidy. I thought I'd provide a recap on that debate.

- I am in favour of Super Fast Rural Broadband (SFRB) however shareholder profits are a barrier to private sector investment.

- This is not a debate about super fast rural broadband or an expression of opinion about any premise outside of Lancashire.

· This subsidy is about market failure – The question is why is this market failure prioritised over other market failures?

· LCC press release stated that the £32m public investment will create just 25 jobs at a cost of £1million plus per job.

· LCC are using £5million of Council Tax to fund SFRB in Lancashire. David Cameron 5/10/2010 Tory Conference "But it's fair that those with broader shoulders should bear a greater load."
Rossendale Council chiefs believe the project could cost as little as £7million

Read more at:
Rossendale Council chiefs believe the project could cost as little as £7million

Read more at:
Rossendale Council chiefs believe the project could cost as little as £7million

Read more at:

· Yet LCC are controversially closing 4 household recycling stations – including controversially Great Harwood in Hyndburn - on the basis that they need to make savings (£520,000) because of cuts.

· LCC are making cuts to adult social care and other vital services.

· A proposal from Rory Stewart MP and a number of partners have discovered much cheaper ways to rollout broadband in rural areas, costing as little as 60k for some villages, has suggested a ‘soft loan’ from Government to put up these smaller costs first and be paid back by residents over a longer period

· LCC claim that this will benefit 200,000 premises but refuse to say where these premises are. In Hyndburn, there are approximately 3,262 premises that do not receive SFB (only figures LCC willing to provide)

· The £32m subsidised programme is LCC’s flagship policy and flagship economic policy.

· The overall investment including £32m subsidy is around £130m (BT/GJ 20th June Parliament)

· The subsidy works out at just 31p per week per business or home (200k premises over 10 years) and could have been passed onto consumers. 10 years being a short period.

· 67% of Lancashire has SFB and according to BT (BT/GJ 20th June Parliament) many rural areas already have fast broadband and broadband. Some upgrades will only facilitate video streaming.

· LCC has yet to produce any evidence of how this will create jobs in high employment and protected rural areas?

· BT admit (meeting 20th June Parliament) that this is not a commercial decision but a political decision. They do not know how many jobs it will create.

- No options appraisal has been brought forward analysing other means to fibre optic, such as satelite and 4G

- Jake Berry, Conservative MP for Rossendale and Darwen, told a debate in Parliament that the Rossendale area was "marooned" by poor transport links. He said a commuter rail link was "vital" for east Lancashire's economy. "The rail link would help create jobs and raise prosperity" and called for an urgent parliamentary debate on the matter. Rossendale Council have said this rail link could cost around £7million.

· LCC income data of the 301 wards (Tables 2 and 3) in Lancashire shows that rural areas are the wealthiest in Lancashire and the urban areas are the poorest and the gap is wide.

· Indices of deprivation (of 327 Boroughs) Hyndburn is 34th, Burnley 11th, Blackburn 17th, Pendle 33rd, Blackpool 6th, the wealthy rural Boroughs are Ribble Valley 290th, Fylde 236th, Wyre (including deprived Fleetwood) 163rd, South Ribble (including Leyland) 206th.

· LCC income data for 2009-2010 Table 2 and 3 shows the wealthiest rural wards saw income increase during the recession of between 5-6% - the poorest urban wards saw income falls of 8-9% during that 12 month period alone.

· LCC unemployment data of 301 wards shows that the unemployment in the Ribble Valley is just 3.3%, 4.8% in Wyre and 4.9% in South Ribble.

· Lancashire rural areas are careful about granting any development, they place a huge emphasis on protecting the natural environment and employment sites are severely restricted though planning.

· GP League Tables in East Lancashire shows rural areas have the best GP services and the urban areas (worst = Hyndburn) have the poorest GP services.

· Lancashire health data shows that health is worst in the urban wards, best in the rural wards.

· 41% of the public believe that LCC’s Lancashire Wide (including rural) Super Fast Broadband is not an economic priority.

· Food Bank parcels in Hyndburn have doubled in 12 months – middle class now affected - front page of Accrington Observer - “It’s worse than The Depression”. See attached jpeg

· Front page of Guardian (Tues 19th June) – here and here state that Accrington in Hyndburn, has 30% of all households (second in the list of vulnerability in the UK) at risk of slipping into 'official poverty'. ‘One bill away’.

· Digital poor unable to access or afford the internet live urban areas.

· 14 June 2012 – Cumbria CC rejects broadband bids from BT and Fujitsu for SFRB rollout

It’s important the private sector provides Britain with a national infrastructure second to none. Lancashire County Council claim 200,000 commercial and residential properties will benefit which equates to just 30p a week for 10 years for each premise.

There is no explanation why a £32m subsidy is required, no explanation of how many further jobs it will create other than the paltry 25 it will require and £5m of this funding is directly from the Lancashire’s poor council tax payer. That’s a cost of £1m plus per job.

The benefits of subsidy may be outdated in 10 years. What will happen next, a further £60m subsidy?

Tory MP’s are the meantime demanding funding for East Lancashire rail link describing it as vital.

All this when Hyndburn made the front page of national papers with the statistic that 30% of all families are one bill away from slipping into official poverty with the Accrington Observer carrying the headline “It’s worse than the depression”.

Contrast that the Ribble Valley is the 290th least deprived with just 3.3% unemployment, average incomes almost treble that of poor urban wards in Hyndburn and according to PCT data, have far better health statistics and far superior GP practices.

You have to understand Lancashire to understand this issue.

It is hard to make a case that this £32m will create jobs in development averse high employment rural Lancashire areas, that the technology is future proof and hard to believe that at 30p per week it could not have been paid for by private sector investment.