Government abandons £15m broadband aggregation scheme

A government initiative to save £200m on the UK's £1bn broadband bill using regional aggregation bodies to pool public sector buying power has led to savings of just £3.5m to date.

After spending an initial £15m on setting up the scheme the Department of Trade and Industry (DTI) is to stop the funding and close the national aggregation board. The future of the regional aggregation bodies – known as adits – will now be left in the hands of each of the Regional Development Agencies.

A spokesman for the DTI told silicon.com: "The central function is being ended. It will be for the regions to decide what is best for broadband in their area. It is for the Regional Development Agencies to decide if they want that [RAB] function to continue."

Nine regional aggregation boards (RABs) were set up at the start of the year after a high profile launch of the initiative 18months ago by then e-commerce minister Stephen Timms.

The aim was to pool public sector demand for broadband to get bigger discounts with the knock-on effect that broadband infrastructure could be brought to areas of the country where it is not currently economically viable for suppliers. This would also increase availability to private sector businesses and consumers.

The government approved 17 telecoms suppliers for the RABs to procure broadband through but take-up has been patchy – the North East has flourished in stark contrast to the South East - and the DTI said direct cost savings through the RABs to date total just £3.5m. He said the RABs are effectively commercial organisations and will have to be self-sufficient.

Brian Condon, CEO of Access to Broadband Campaign, said while the aims were worthy many had reservations about how a national procurement framework would work across regional and organisational boundaries.

"It was far too ambitious in the first place. It underlines the complexity of what the government was trying to do. The question now is whether the RDAs have the resources or structure to do it. It does need some central body to look after it," he said.

Barry Desmond, founder of Broadband4Britain, welcomed the news. "We said from the outset it was uncompetitive and out of touch with local and regional needs. It took the drive out of market forces and introduced another layer of bureacracy."