26th Sep 2013 13:02
LONDON (Alliance News) - The Commons Public Accounts Committee said Thursday that the government has mismanaged its rural broadband rollout programme by awarding all 26 contracts to BT Group PLC.
The project is intended to make sure that the countryside has comparable broadband speeds to towns and cities, but the accounts committee criticised the project as it had "failed to deliver the intended competition for contracts, with the result that BT has strengthened its already strong position in the market."
The government provided a subsidy of GBP230 million for firms rolling out broadband, with local authorities also contributing GBP730 million.
"The taxpayer has been ripped off with GBP1.2 billion going to the shareholders of BT," Committee Chair Margaret Hodge said.
BT is expected to win the remaining 18 contracts, but the accounts committtee report said that contract terms for BT had been overly generous, and it accused ministers of not checking if bids from BT had been reasonably priced.
The report went on to criticise BT for failing to provide full information about where it would roll out its superfast broadband services to local authorities, and including a clause in its contract preventing them from disclosing the costs involved to other authorities negotiating contracts.
PAC's report recommended the government publish BT's detailed rollout plans, which would allow other suppliers to offer services to the final 10% of the population not covered by the plans.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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