Business

Broadband subsidies clawback from BT 'won't be paid until after 2024'

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Gary McDonald Business Editor

A MULTI-million clawback of public funds paid to BT for the provision of broadband services in Northern Ireland won't all be coming back to Stormont, it has emerged.

An Audit Office report in June found that the telecoms giant was heavily subsidised to improve the coverage for thousands of homes across the north in two separate schemes.

BT had estimated that around 20 per cent of customers would access and pay for the faster service under one of the schemes, but the take-up was at least twice that, and as a result it boosted the firm's profits.

The terms of the contracts for the Northern Ireland Broadband Improvement Project (NIBIP) and the Superfast Rollout Project (SRP) included clawback provisions if the strict terms weren't adhered to.

The Audit Office estimated that around £14 million will have to be recovered from BT and returned to the public purse.

But the money won't be repaid until the two contracts are completed by the end of 2024, and it will be split on a pro-rata basis between two government departments.

Sinn Fein's economy spokesperson Dr Caoimhe Archibald, in a written question to Economy Minister Gordon Lyons, asked if and when the money will be clawed back.

In response, the department said it will ensure that all clawed back funds "are paid in line with the supplier's obligations under the contracts".

The NIBIP and SRP programmes were jointly funded by the Stormont economy department and the Department for Digital, Culture, Media and Sport (DCMS).

The minister's response went on: "The NIBIP contract ends on March 31 2023, and the SRP contract ends on December 31 2024.

"Clawback accumulates until the end of the contracts, at which point it will be paid by the supplier to the Department.

"It is currently estimated that total clawback that will accrue to Government over the life of the two contracts might total £14 million, but this final amount will not be confirmed until the contracts have ended.

"The money will then be shared between DfE and DCMS in proportion to each department's original funding provided for the projects."

In June's Audit Office report, comptroller Kieran Donnelly concluded that it was not possible to verify that the two major broadband projects, which received £35.1 million in public subsidies, achieved value for money.

The report noted that the take-up rate for improved broadband was significantly higher than originally thought.

It said BT had estimated that around 20 per cent of customers would access and pay for improved broadband delivered, but the actual take-up reached 66 per cent for the NIBIP and 33 per cent for SRP2.

The report suggested that the high take-up rates "raised questions over whether either project could have been commercially viable with significantly less public subsidy", and estimated that around £14m must be recovered from BT.

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