5G and gigabit-broadband rollout have often been heralded as the means by which the UK becomes a truly digitally connected and inclusive nation. Whilst the Conservative Government initially set out a bold commitment to deliver full-fibre and gigabit-capable broadband to every home and business by 2025, this was soon rolled back to an aim of 85% coverage by 2025, with a nationwide target of 2030. A target of 5G coverage for the majority of the population was also created within the Levelling Up White Paper, but the question remains whether either of these targets are achievable. The Spring Statement underlined doubts as to whether the UK Treasury is willing to provide the necessary funding to hit the government’s own targets.
The push for ambitious full fibre targets has its roots in the UK’s poor performance compared to international peers, a source of embarrassment for government ministers. Gigabit broadband figures languished for several years, with coverage in the UK increasing from 3.4% in January 2018 to only 5.8% in January 2019. Recent years, however, have seen a dramatic improvement with an increase from 11.8% UK coverage in January 2020 to 67% in March of 2022. Significant private sector action has been the main driving force behind the improvement, though some critics have been quick to point out that the government’s figures include upgrades to cable networks alongside full fibre deployment.
A further caveat to these achievements lies in the fact that this has been driven by commercial suppliers and the telecoms industry, who have in turn prioritised those areas of the UK that are most commercially attractive. Hard to reach areas are currently at risk of becoming digitally marginalised, as the modern data demands of the average household continue to struggle with outdated infrastructure. Project Gigabit, the £5 billion government infrastructure project that sought to address this very issue, made some progress in upgrading connections for less accessible homes and businesses, though the 2020 Spending Review severely limited its capabilities, granting only £1.2bn of funding before 2025.
This limited and delayed funding speaks to ongoing tensions between No.10’s lofty policy ambitions and the Treasury’s fiscal conservatism. The Department for Digital, Media, Culture and Sport (DCMS) and No 10 have ploughed ahead with legislative reform designed to stimulate network deployment and investment through the electronic communications infrastructure code, which is currently passing through Parliament, and outlined a focus on Digital Connectivity within the Levelling Up White Paper.
In contrast, the Treasury has expressed little willingness to keep pace with funding to match these steps forward, providing no detail as to when the remaining £3.8bn will be provided. This was confirmed yet again at the Spring Statement, which was notable for the absence of any references to the upgrade of the UK’s broadband network, implying that that investment in telecoms infrastructure is a “nice to have” rather than a top spending priority. The working assumption remains that the vast majority of Project Gigabit funding will remain unavailable until after 2025, thereby capping the pace of gigabit roll out in rural areas.
Telecoms investment appears to be a victim of competing priorities. Rising energy bills, inflation, demands for higher defence spending and the fallout from the pandemic are all vying for the Chancellor’s attention as he simultaneously attempts to cut taxes. The question is how long this position will be sustainable. The steady pressure for improved telecoms infrastructure is unlikely to abate, and with the May local elections fast approaching, Conservative politicians in rural areas will want assurances that Digital Levelling Up remains a commitment of the party, not least because complaints over poor broadband service have a habit of clogging up MP’s constituency inboxes.
Whilst DCMS can continue to legislate to alleviate obstacles that the industry faces, they face the stark truth that to roll out in rural areas will require access to the full £5billion of Project Gigabit funding, and likely further funding beyond that. In the absence of any funding acceleration from the Treasury, the targets will likely need to be quietly re-evaluated yet again.