Doncaster Council borrow £6 million to prop-up failing broadband scheme

September 13, 2012 10:29 AM

Last month, my colleague Phil Downs wrote about Digital Region. This is a publicly owned Internet project in South Yorkshire that has gone disastrously wrong, leaving taxpayers in Doncaster, Sheffield, Rotherham and Barnsley with a potential £50 million liability.

It was reported in the press a few days ago that Doncaster Council has approved the latest handout to Digital Region of £6.28 million. What is not clear is if this money is in addition to what has previously been reported, however because the council does not have a spare £6 million in its coffers, it has to borrow the cash, further adding to the taxpayer burden.

Finance Director, Simon Wiles had this to say:
Until the process has been completed it is impossible to quantify with any certainty what the final cost will be. The council is in regular contact with Digital Region Ltd at board and officer level, to monitor the process and help to minimise the costs incurred and funded by the council. The level of available council reserves is insufficient to absorb these costs.

Questions still remain unanswered as to why the four South Yorkshire councils got themselves involved with the scheme. Digital Region never canvassed the opinion of local residents and businesses, which is what any other business would have done before committing millions of pounds to such a scheme. It should have been evident that not everyone wants or needs superfast broadband. Many people only use the Internet to check their e-mails, do online banking and go on social networking sites like Facebook. As superfast broadband is more expensive, many will not be able to afford or justify the extra costs.

Hopefully this sorry tale will act as a warning to other councils who are tempted to get involved with similar schemes. If there is a need, the market will provide, especially in built-up areas like South Yorkshire. What you should not do is plough £millions of taxpayers' money into a broadband scheme in the hope people are going to follow. This example proves that approach does not work.Last month, my colleague Phil Downs wrote about Digital Region. This is a publicly owned Internet project in South Yorkshire that has gone disastrously wrong, leaving taxpayers in Doncaster, Sheffield, Rotherham and Barnsley with a potential £50 million liability.

It was reported in the press a few days ago that Doncaster Council has approved the latest handout to Digital Region of £6.28 million. What is not clear is if this money is in addition to what has previously been reported, however because the council does not have a spare £6 million in its coffers, it has to borrow the cash, further adding to the taxpayer burden.

Finance Director, Simon Wiles had this to say:
Until the process has been completed it is impossible to quantify with any certainty what the final cost will be. The council is in regular contact with Digital Region Ltd at board and officer level, to monitor the process and help to minimise the costs incurred and funded by the council. The level of available council reserves is insufficient to absorb these costs.

Questions still remain unanswered as to why the four South Yorkshire councils got themselves involved with the scheme. Digital Region never canvassed the opinion of local residents and businesses, which is what any other business would have done before committing millions of pounds to such a scheme. It should have been evident that not everyone wants or needs superfast broadband. Many people only use the Internet to check their e-mails, do online banking and go on social networking sites like Facebook. As superfast broadband is more expensive, many will not be able to afford or justify the extra costs.

Hopefully this sorry tale will act as a warning to other councils who are tempted to get involved with similar schemes. If there is a need, the market will provide, especially in built-up areas like South Yorkshire. What you should not do is plough £millions of taxpayers' money into a broadband scheme in the hope people are going to follow. This example proves that approach does not work.

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