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5 July 2013 | Adam Leach
The rollout of superfast broadband to 90 per cent of UK households is running almost two years behind schedule, due to a lack of competition and limited transparency of supplier costs.
Rural broadband programme, published today by the National Audit Office (NAO), forecasted the 90 per cent target will now be met in March 2017, some 22 months later than originally planned. While six months of the delay was attributed to issues around getting EU approval, procurement for the project absorbed the brunt of the blame.
The original design of the competitive framework for the programme was established with three principles to ensure value for money; competition among suppliers; transparency of costs; and contract controls to hold suppliers to account. The NAO report concluded of the three principles, which the Department of Culture, Media & Sport (DCMS) conceded would not work in isolation, only one is still active.
On competition, there is now only one bidder, BT, after other interested parties withdrew from the process. On transparency, DCMS has accepted it has not been provided with sufficient assurances BT’s costs and other relevant data bids are reasonable.
The report praised the department for putting controls into the contracts, such as only paying costs supported by invoices. But it emphasised the pressure it would place on contract management, such as the scrutiny of hundreds of thousands of invoices.
Amyas Morse, head of the National Audit Office, said in a statement: “The rural broadband project is moving forward late and without the benefit of strong competition to protect public value. For this we will have to rely on the department’s active use of the controls it has negotiated and strong supervision by Ofcom.”
In a response to the report, DCMS said: “We have noted the NAO report and welcome its confirmation that processes we have put in place to ensure value for money are strong and robust. We agree that effective enforcement of the contracts is important and are working with local authorities to ensure this. As the NAO report makes clear, the project’s funding model greatly reduced the cost and financial risk to the taxpayer.”