Fortunately, they had the good sense to shop around and were subsequently given an estimate of £50,000 by another company, Rutland Telecom, to upgrade the copper wire line from the telephone exchange with fibre optic cable to receive super-fast broadband.
The new broadband scheme for rural Wales, funded by the Welsh Assembly Government (WAG), is aimed at giving each household or business a grant of up to £1,000 to assist with the installation of a broadband. Therefore, if every home in Erbistock comes on board, the cost will be covered and the village will be fully online by October.
With many other rural areas in Wales being in a similar position, this model demonstrates how a demand-led approach can empower communities to find solutions for themselves and supported, on a case by case basis, by WAG
However, it also calls into question the “top down” approach of one of the key initiatives within WAG’s new economic strategy.
As some of you may be aware, Ieuan Wyn Jones announced, back in July, that the vast majority of grants to support small businesses would be abolished. Instead, the funds would be diverted to create a £240 million “next generation” broadband infrastructure for Wales by 2016.
As I have said before, investment into critical new technologies can make a real difference to the productivity of businesses and there is certainly a case for extending the current broadband provision away from the main industrial urban and localities to the more deprived communities and those rural areas which still depend on dial up modems to access the internet.
However, the indications are that WAG has only been in discussions with the major telecom providers in Wales, which suggests that the price tag put forward for their broadband programme may be too high.
Certainly, the case of Erbistock suggests that WAG may be paying over the odds for a new broadband system if it only works with a small number of large telecoms companies.
Hopefully, WAG is currently exploring all the options, including giving direct grants to communities and businesses to access the cheapest broadband option in a competitive process. As the villagers of Erbistock have demonstrated, it could be a more cost-effective alternative to merely giving multi-million pound contracts to a few selected companies to provide expensive broadband solutions across Wales.
Comments
Let’s look at an example from recent WAG history.
For many years Welsh Business Support was provided by a number of organisations, who had won the right to deliver that support, by successfully submitting a Tender (and this is still the case for some types of support). This ‘top-down’ approach can work and has the benefit of a rigorous, professional supplier selection process, which, typically, will consider quality, reliability, price, whole-life costs, sustainability issues, etc. However, the flaws with this approach can include lack of choice, bureaucratic procedures and, ironically, reduced value for money.
Approximately 18 months ago, WAG switched to a ‘bottom-up’ approach for a great deal of business support. Contracted support providers became a thing of the past and individual businesses were told: “Go out and find your own Advisors and we will give you a grant to cover the cost of the advice.” Broadly, the result of this was a largely unregulated ‘car boot sale’ of business advice, open to anyone who could convince the unwary business-person into ‘shelling-out’ thousands of pounds, very often, for unsuitable support…and paid for by public money. The phrase ‘good money for old rope’ springs to mind.
This second scenario is the very real danger of adopting a purely ‘bottom-down’, market-led approach and, reading between the lines, is probably one reason that we’ve been saddled with the ERP.
I would suggest that a combined approach would achieve the best results. WAG should follow the standard European Public Sector Procurement practice and create a Framework Agreement of approved suppliers, using the OJEU Tender process. This approach would include all the benefits of a rigorous, professional supplier selection process, but would also enable individual communities to spend grant money wisely, by selecting the best offer from a range of suppliers that have met certain expected standards; it would also help to prevent the ‘Band Wagon’ of Telecoms companies milking the grant system and dishing out more ‘old rope’ at the taxpayer’s expense.
Let’s look at recent WAG history.
For years Welsh Business Support was provided by a number of organisations, who had won the right to deliver that support, by successfully submitting a Tender. This ‘top-down’ approach can work and has the benefit of a rigorous, professional supplier selection process, which will consider quality, reliability, price, whole-life costs, sustainability, etc. However, the flaws with this approach can include lack of choice, bureaucratic procedures and reduced value for money.
Around 18 months ago, WAG switched to a ‘bottom-up’ approach for most business support. Contracted providers became a thing of the past and individual businesses were told: “Go out and find your own Advisors: we’ll give you a grant to cover the cost of the advice.” Broadly, the result of this was an unregulated ‘flea-market’ of business advice, open to anyone who could exploit the opening, very often, charging thousands of pounds for unsuitable support…and paid for by public money. The phrase ‘money for old rope’ springs to mind.
This second scenario is the danger of adopting a purely ‘bottom-down’, market-led approach and, reading between the lines, is probably one reason that we’ve been saddled with the ERP.
I would suggest that a combined approach would achieve the best results. WAG should follow standard EU Public Sector Procurement practice and create a Framework Agreement of approved suppliers, using the OJEU Tender process. This approach would include all the benefits of a rigorous, professional supplier selection process, but would also enable individual communities to spend grant money wisely, by selecting the best offer from a range of suppliers that have met certain expected standards; it would also help to prevent the ‘Band Wagon’ of Telecoms companies milking the grant system and dishing out more ‘old rope’ at the taxpayer’s expense.
Bern