The next item is the statement by the Minister for Skills and Science on superfast broadband. I call on the Minister to make her statement—Julie James.

Diolch, Lywydd. Following my written statement yesterday I want today to just restate those plans for further investment superfast broadband following the completion of Superfast Cymru next year. We’ve been very clear about our ambitions in ‘Taking Wales Forward’ to bring fast, reliable broadband to every property in Wales. Our achievements to date should not be underestimated. Superfast Cymru is a massive project bringing access to superfast broadband to now nearly 614,000 homes and businesses, and having invested over £162 million of EU and public funding. To be clear, that is 614,000 premises that would not have been able to access fast fibre broadband without our intervention.

We are not finished yet. The final year will see a further 100,000 premises being given access to fast fibre broadband. This will involve investing up to a further £62 million. But we’re not going to stop there. We are currently assessing the responses to the recent consultation with the telecoms industry in relation to an additional £12.9 million to extend the reach of the Superfast Cymru project next year. This is the amount that BT had forecasted will be returned to the public purse through the gainshare clause within the current Superfast Cymru contract. We still need to carry out a detailed analysis and dialogue with BT and we expect that this additional funding will enable additional premises to be reached through the Superfast Cymru contract by December 2017.

Given that the Superfast Cymru contract will end next year, we have already embarked on the preparatory work necessary to establish the successive broadband investment project. To reiterate, the gainshare clause allows the Welsh Government to benefit from the success of our investment in BT’s network via the Superfast Cymru project. Our share is invested in a fund to be either reinvested in the project or returned, with interest, to the Welsh Government in 2023.

We anticipate, based on detailed modelling, that the Superfast Cymru investment fund will eventually yield between £30 million and £50 million by 2023 as take-up of fibre services funded by our investment reaches between 35 per cent and 50 per cent over that period. We will support this activity through our commitment to provide £20 million over the next four years to support this activity and to leverage significant additional investment.

We are in the early stages of discussions with the Welsh European Funding Office to secure a further £20 million of structural funds to continue the roll-out of superfast broadband. We remain confident that the funding will be available, subject to WEFO approval, as a result of the UK Treasury’s guarantee to honour EU bids approved prior to the UK’s exit from the EU. We will continue to press the UK Government for additional investment in Wales that builds on the success of Superfast Cymru and contributes to UK Government policy goals. We also have an outstanding commitment from the UK Government of £2 million towards a new superfast broadband project.

Taken together, Superfast Cymru will be underpinned by a public sector budget of up to £80 million, which in turn will leverage private sector match funding to further extend broadband coverage to the hardest-to-reach premises across Wales by 2020. The Access Broadband Cymru scheme will continue to play a part, with a further £1.5 million over the next two years to ensure that this vital lifeline operates in parallel to Superfast Cymru and successor projects, with equivalent funding in place to extend for a further two years beyond 2018.

We will launch an open-market review this month to establish, at a premises-by-premises level, where superfast broadband has been delivered to date and where the market plans to invest over the next three years. We will also engage with the telecoms market over the next weeks and months to help shape and inform our intervention area and procurement strategy. In developing the next intervention, value for money will continue to be a priority, and I need to remind Members that we cannot provide fibre connectivity at any cost.

We currently aim to launch the procurement process in February 2017 so that a contract can be awarded in January 2018. Getting to the final few per cent is going to be challenging and will take time, but by starting now we will be in the best possible position when the Superfast Cymru project comes to an end next year. Thank you. Diolch.

I’d like to thank the Minister for her statement today, and it was very welcome to have that written statement yesterday, which, of course, is useful ahead of today’s statement. I’m very grateful for that. I’d like to think that the result of today’s announcement is a result of the contributions made at the Welsh Conservatives’ debate last week.

Many of those very frustrated residents who are yet to see the benefit of the Superfast Cymru project I hope will be encouraged that the further funding has been allocated to deliver universal access and extend broadband coverage to the hardest-to-reach premises by 2020. People will be suspicious as previous commitments have been missed—I’m not going to rehearse last week’s debate—but I welcome the new investment today.

As the Superfast Cymru project progresses, the debate, I would say, is moving away from access to take-up. Its priority, I would say, for value for money from the public purse and in bringing fast, reliable broadband to every property in Wales, is to devote much more attention to encouraging widespread take-up. I would say, regrettably, I think we haven’t had very much today in regard to concrete measures that the Welsh Government is going to take to stimulate demand. I’d say it’s all very well having first-class infrastructure, but if no-one uses it, it’s a wasted opportunity.

One of the criticisms that I had of the original contract was that only 0.6 per cent of the original budget allocation for the Superfast Cymru project was dedicated to encouraging take-up. The evaluation of the next generation broadband Wales programme also highlighted the lack of coherence and strategic approach to marketing and communications. So, I would be grateful if the Minister could set out how the Welsh Government intends to encourage universal take-up.

In your statement, Minister, you refer to the fact that the Welsh Government will benefit from the gainshare clause in the Superfast Cymru contract, which means that between £30 million and £50 million will be available by 2023 to reinvest. Given the fact that the availability of this funding is incumbent on improving take-up, what proportion of the £80 million public funding will be attached to specifically encouraging the exploitation of superfast broadband in the intervention area?

You’ve also confirmed that the all-Wales take-up is 29 per cent of the intervention area. However, can I ask you to provide a breakdown of the figures by local authority? The latest take-up figures that I have seen showed that in spite of 96 per cent and 93 per cent in Blaenau Gwent and Merthyr respectively, take-up only stood at 17 per cent. That’s hardly a great conversion rate.

And finally, I’d also have to say that the projected take-up of between 35 per cent and 50 per cent is insufficiently ambitious. A recent report for BT suggests that superfast take-up could approach 80 per cent of all premises in the UK by 2020. So, can I ask you what intention you have of revising your 2015 target upwards?

Thank you for those questions. Russell George didn’t mention the fact that in committee last Thursday morning, he pressed me as to when my next statement would be, and I promised him it would be before Christmas. So, I was rather hoping you’d give me credit for having got there really quite rapidly, only two days later.

In terms of the take-up, we have independent research to show us what is possible and ambitious. And with all new technologies, there’s a standard curve that these things take, so around 29 per cent at this point in time is about what you’d expect, and then that accelerates as technology beds in. Our independent research shows us that somewhere between 35 and 50 per cent is a realistic estimate of what we might expect. Obviously, we have a marketing campaign and we have a business take-up campaign. These complement, obviously, all the private campaigns undertaken by all the internet service providers—we’re all bombarded with them every day. They’re in addition to that. So, I think you’d be hard put to say that people weren’t aware of broadband. And Russell George will also be aware that we’re being a little bit sensitive in some areas of Wales, because we don’t want to be pushing the expectations of people who don’t yet have broadband.

So, what I would urge Members to do is to play their part right across Wales, as I said in the debate only last week, in encouraging take-up with their constituents who do have broadband, and encouraging constituents who are, very understandably, frustrated at not having broadband, to encourage their neighbours who do have it to take it up because, obviously, the gainshare increases for all of the percentages of that that we get. And so, it’s a very positive message that if you can persuade your neighbours who have it to use it, then the Welsh Government will have more money to make sure that we can get it to other people.

As the campaign spreads out across Wales, as I said last week, we will share with Members where it is in their particular area, their constituency or their region, and we do hope that Members will get on board with helping us with that marketing, as, obviously, the more money we’re getting, the better. If we were to reach 80 per cent then that would be marvellous, because we’d have that much more money to get the fibre broadband or any other technology out to people.

And on that point, the point is, of course, that for some of the hardest premises to reach in Wales, it will not be fibre broadband in the sense of a cable to your house. But the technology moves apace, and so we will get very fast broadband to people; it might be microwave or satellite technology. On that basis, I’m not saying that we will let a single monolithic contract to match up to the end of the Superfast Cymru project; it may be that we let individual contracts in different areas, so that SMEs and other technology providers can take part in that procurement, and we’d be very anxious to make sure that that could happen.

Thank you very much, Lywydd, and I thank the Minister for her statement on superfast broadband. You mentioned in your statement that some modelling work by the Welsh Government and the UK Government suggests that the Superfast Cymru investment fund will produce some £30 million to £50 million by 2023, as between 35 per cent and 50 per cent choose to use these services. So, what emerges from that? According to an evaluation of the next generation broadband programme in Wales, the level is expected to reach 80 per cent by 2020. What assessment has the Government made of any additional funding that will be generated if this assessment is correct? And following on from that question on why not everyone who can access broadband does choose to access broadband and the need to raise awareness on occasion, can I ask whether any part of the additional investment that has been announced today will be allocated to raise awareness and to encourage people to make use of the provision if and when it’s available? Thank you.

Reiterating my answers to Russell George then, we have a £1.15 million local broadband campaign and a £12.5 million superfast business project, which are marketing the scheme for take-up and to businesses. We work closely with Business Wales as well to make small businesses in particular aware of what superfast can actually do for their business. So, it’s not just about the take-up for us, it’s about driving the economic growth of Wales, because until you’ve got fast broadband, it’s sometimes very hard to envisage what actually can be done with it. So, we have a project where business advisers assist people to understand what other things they could do in their business should they have superfast.

Yesterday, I had the privilege to visit Puffin foods down in Pembrokeshire, a very good company, and see their incredible technology that they utilise in the production of basic foodstuff, obviously. They have actually gone from having superfast—which is why I was there to make the announcement—to buying into our ultrafast connectivity voucher, because as they’ve understood what the thing can do for them, they’ve realised that investing in ultrafast for their business is a very sensible business investment. So, that’s what we’re aiming for really. We’re aiming to get people to understand what it can bring to them and that, therefore, it might be worth them investing in additional capacity.

In terms of what estimate we’ve made of the gainshare, the gainshare is just exponential, so if we get more of a percentage take-up we get the same level of gainshare. We’re basing it on 35 to 50 per cent because that is a reasonable estimate. This isn’t a target, bear in mind—I’m not setting myself a low target—this is a good prudential estimate of the money that it might raise. If it raises more then we’ll ensure that we have the contractual provisions in place to spend the extra money, and that’s all to the good. Obviously, in setting the contract out, again, we don’t want to be over-ambitious, so we’re setting it out in what we’re told by independent research is a reasonable level of take-up to expect over the next four years, given the standard curve for new technology take-up that I mentioned to Russell George in his earlier question.

Thank you for your statement, Minister. I welcome the Welsh Government’s aim to provide the infrastructure necessary for the supply of superfast broadband to every property in Wales. It’s good news that 614,000 homes and businesses now have access to superfast broadband if they choose. However, your statement doesn’t indicate what your priorities are regarding which properties will receive superfast broadband first in the next roll-out. Loneliness is a major issue for many elderly people and access to superfast broadband would improve their chance of social interaction and keeping in touch with loved ones. Will the Minister please explain which properties will be prioritised for the roll-out of the next stage of superfast broadband and in particular whether supply of that broadband will be prioritised for the elderly and people bound to their homes?

What we’re going to do in the next stage is that we’re working on the specifications right now, in terms of whether we’re going to have priority areas, whether there are going to be geographical priorities and so on. As I said, I anticipate that we will probably let a series of batched contracts really—although please accept that I’m not in a position to say so categorically at this stage—but with a view to stimulating SME markets, to stimulating small local companies, for example, and so on. In that way, also, we can target a number of priority groups at the same time rather than having a single roll-out. Bear in mind that this will also be on a premises-by-premises basis. We’ll actually know which house, rather than which post code area, that we’re talking about. So, we will be able to do some things individually that we aren’t able to do with the current contract. As we do that piece of work and as we become aware of it, I’ll make sure that the Assembly’s updated accordingly.

I welcome the Minister’s further update to Members on this issue. I should be familiar with, and I’ve raised before, access to superfast broadband is something of significance to constituencies and businesses in Delyn. However, I recognise the lead that the Welsh Government has taken in rolling out and ensuring access to superfast broadband, in spite of the logistical challenges that my inbox and my postbag make me all too aware of, with the Government on track to enable 96 per cent of properties in Wales to connect to superfast broadband by 2017—something that the other nations won’t be able to match. You’ll be aware that this potentially brings huge social and economic benefits for businesses and citizens in what is increasingly the digital world that we live in. Can I ask, Minister, with respect to the open market review and consultation outlined in your statement, I’d urge that this reaches out across the country and communities in order to meet the needs and ever-growing expectations of the future.

Exactly. One of the things that we’ll be looking to do in the next stage of the project is to futureproof it, and, as I said, make sure that we can spend any gainshare money on making sure that that futureproofing exists. So, one of the things we’re very keen on doing is making sure that we use all of the available new technologies and that we set up the new procurement with a view to maximising some of the new technologies. An example I could give is that if you’d had satellite broadband three years ago, the likelihood of your getting a maximum speed of over around 30 Mbps was pretty low, whereas now I’m aware of microwave and satellite systems that produce 100 Mbps both up and download. So, the technology has moved extremely fast in the last three years.

Also in Wales, we have a large number of very innovative SMEs and I’m very anxious to make sure that they have the chance to participate in the procurement, as I said. Obviously, the procurement will be done properly and the bidding process will be invisible, and so on, but what we want to do is ensure that we package it in such a way that the largest number of innovative SMEs from around Wales get a chance to bid for that contract, and so we can maximise value in that way. Also, that we use Government innovation funding to assist with some of the technologies that we know might help for more remote areas. In particular, one of the things we’re doing with our business exploitation project, as I said earlier, is making sure that small SMEs actually understand what they can, in fact, do once they have superfast broadband.

In the Member’s own constituency, for example, a large number of SMEs that I know use broadband at the moment, but are perhaps not aware of some of the things that you can do with automatic downloads overnight, for example, and automatic invoicing and billing and so on. So, what I’m asking all Members to do is to co-operate with Business Wales, and as we roll it out across the areas, Members can get involved. They can get their constituents active in that area and I hope that your postbag will change to a nice, positive, happy one, and not people who are anxious, understandably, to get on to the programme as soon as possible.

You state that, given that the Superfast Cymru contract will end next year, you’ve already embarked on the preparatory work necessary to establish a successor broadband investment project. Obviously, Superfast Cymru is at 96 per cent. I referred last week in the Chamber, and I think in committee, to the UK Government’s £10 million innovation fund pilot, which ran throughout 2015, looking at their implementation for the final 5 per cent there. That reported its findings in February. Was Wales included in that or not, and if not, will you be basing your roll-out on that, or if not, why are we two years behind England?

Finally, last week, I asked you questions in the debate to which you’ve already referred regarding FibreSpeed north Wales. I wonder if you could answer how many millions of public money was spent on a Welsh Government project, resulting from a Welsh Government tender, which went horribly wrong, which went nowhere, and why FibreSpeed were placed in that position.

In terms of FibreSpeed, I think it would be best if the Member and I have an e-mail correspondence. If you want to write to me and set out the exact questions you want answered—we’ve had this conversation in the fourth Assembly as well—I’m more than happy to set it out again for the Member.

In terms of whether we’re taking the innovation research into account, the answer is ‘Yes, we are’, but it’s not specific to Wales. As I said in a response to an earlier Member’s question, the new final stages, if you like, of superfast roll-out, will be very much on a premises-by-premises basis, because we’ve now got down to so few numbers that we can address individual problems. I’m afraid it will come down to that in some areas of Wales. We’ve got properties that have an individual problem and they can’t be solved with the roll-out of a cabinet or a fibre network in that way. So, yes, we have taken into account that, but we need specific research for some of the issues that we’ve got in Wales and specific communities of interest. So, for example, we do have a number of farmers who are not yet connected, and they’ll have very specific problems associated with their farm businesses. We have some businesses in remote areas that are not connected, and they’ll have very specific problems connected with their business needs. So, we’ll be looking to be very individualised in our approach in the new contract, and, as I also said, to package it up in such a way that we can get the benefit of all of the new technologies at once.

Welsh Government reports on the progress of Superfast Cymru are always glowing and, of course, you can’t deny the percentage increases that have been gained over the Superfast Cymru programme and, of course, it was through the One Wales Government that the superfast programme was launched. So, obviously, in principle, it’s great to have Superfast Cymru in motion. Unfortunately, we all know from our postbags as Assembly Members that, for far too many of our constituents, Superfast Cymru certainly hasn’t delivered fast broadband and certainly hasn’t delivered anything close to being super.

You mentioned the few farmers that are still left without a fast broadband connection. It’s far more than just some farmers; it’s whole rural communities that are still not connected. Even when that fabled green cabinet is in your village, you still may not have connection to superfast broadband. We need to make sure, and this is a point that I’ve raised on numerous occasions here in the Chamber, that there is much better communication between Openreach and Welsh Government and those customers and potential customers of the future who are told time and time again, ‘No, you’re not quite there yet, but you will be soon.’ But when? Can I appeal to the Government to make sure that any contracts on the son of Superfast Cymru have written into them the need to make sure that communication is watertight with those people, who are hugely frustrated?

We all know here as Members—I speak from a personal point of view; I’m desperate to get superfast broadband. But the problem that I have in seeing the ducts hanging on the telegraph cables is much less than those communities that haven’t seen those visual signs of superfast and know that they’re not going to be connected by this programme. So, please, communicate. Make sure that those communities who want it know why they’re not getting it, what needs to be done in order to get it to them, and make sure that those problems that we’re all aware of will be overcome when we move on to the next stages of roll-out.

The Member eventually got around to a very good point, I think, which is we are very frustrated by the information that has been available. I hope the Member thinks that the website has improved very recently. If he doesn’t, then I’m happy to look at individual issues and so on. I make the same offer to Rhun ap Iorwerth as I’ve made to many other Members: I’m happy to come to your constituency and have a look, individually, at some of the issues there. We have worked very hard with BT and we supervise them very closely over the raising of false expectations and then the moving of the goalposts, which I am as frustrated about as he is.

Absolutely, I will say to you that making sure that we communicate properly with those premises that are in the last stages of our ambition to get to 100 per cent—that they are properly communicated with and understand the issues that we’re dealing with in getting to them. As I say, it will be on an individual, premises-by-premises basis by then. So, we will know exactly what the issues are.

The problem, as you know, and I’ll just reiterate it, is that superfast is getting to a number of premises in order to get to specific ones, and that’s made it a lot cheaper and the money’s gone a lot further, but it has led to the frustrations of those who seem to be in the programme and then drop out because it turns out that there’s a geographical or blocked duct or some other difficulty in getting to them. So, I understand and share the Member’s frustration with the information that’s been there.

However, we must be careful not to talk up as a defeat something that is actually a very good programme indeed. It has reached a very large number of people. It has another 100,000 premises to go in this year. There are people who are in the end of the programme and, obviously, it’s frustrating to be in the end of the programme, but we will get to all of them and we will make sure that Wales is 100 per cent connected as a nation.

I thank the Minister for statement.