6. Statement by the Leader of the House: Update on Digital Connectivity in Wales

Part of the debate – in the Senedd at 5:45 pm on 15 May 2018.

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Photo of Julie James Julie James Labour 5:45, 15 May 2018

Thank you, Deputy Presiding Officer. Today, I want to provide you with an update on the digital infrastructure aspects of my portfolio.

I will begin by focusing on broadband. The delivery phase of Superfast Cymru closed in February, and, since then, we've been working to resolve three outstanding issues. Firstly, we have been considering whether the Welsh Government can work with BT to complete structures part-deployed by BT during the Superfast Cymru delivery phase. Such structures have caused frustration for consumers reporting that they can see fibre coiled on poles, yet they have seemingly no realistic prospect of receiving a fibre service. We expect to conclude this process at the end of May. Secondly, we have been revisiting with BT all of the claim packs submitted by them over the past five years to cleanse the data and confirm the final premises given access to 30 Mbps services as a result of our market intervention. While I am not in a position to confirm the figure today, I can confirm that, in fulfilling its obligations under the grant agreement, BT has delivered a significantly larger volume of premises than either party anticipated at the outset of this project. Finally, we have been establishing the processes and resources required to support the complex defrayment exercise that will confirm the final eligible expenditure under the grant agreement. To date, we have paid BT £300 for every premises, however, the closure of the delivery phase means that we must now work together to balance the books and ensure that all expenditure is eligible and fully evidenced. This process will take several months to conclude, but it is essential to ensure that BT does not benefit from any oversubsidy.

While there continue to be frustrated consumers that cannot yet access the services they require, we must not lose sight of the considerable success that Superfast Cymru has had in delivering access to fast and reliable broadband to thousands of homes and businesses that would not have benefitted without our intervention. I have previously announced an investment of £80 million to reach as many remaining premises as possible. I anticipate that £62.5 million will fund the Superfast Cymru successor project. I can report that our preparations for the successor scheme are well advanced, with the tender exercise ongoing and expected to conclude in June. I aim to announce the successful bidders before the summer recess, with deployment work commencing as swiftly as possible after that. It's clear from other schemes across the UK that the premises remaining will be significantly more expensive to address than those connected during the Superfast Cymru delivery phase. The premises that remain unserved are generally more sparsely distributed and harder to reach. This is why we are investing an additional £31.5 million through the Wales infrastructure investment plan.

The digital landscape is ever evolving and that requires us to constantly look ahead to understand future needs of businesses and residents and whether our interventions continue to meet that need. Our sights are currently set on how we can support and stimulate a progression towards full fibre connectivity. I am pleased to report that the proportion of homes and businesses in the Superfast Cymru intervention area that can get a full fibre service is more than twice that of the UK as a whole. Achieving our 30 Mbps target persuaded BT to invest in significant volumes of fibre to the premises in some very rural parts of Wales. There is currently more fibre into the premises in Powys than anywhere else in BT's network, and the fibre-to-the-premises technology now being delivered across the UK by Openreach was first deployed in Wales. Similarly, we have have constructed the current procurement to favour full fibre services so that we can encourage even greater full fibre penetration where we are investing public funding. Despite a commitment to invest more than £90 million, I am convinced that even this level of funding will not reach all remaining premises. Doing that will require complementary interventions that can operate in parallel with this investment and offer solutions to those not captured by it.  We need to make sure that these complementary interventions address local need, reflect the local demand for services and align with our broader deployment. I hope to be in a position to flesh this out ahead of the summer recess.

Members will be aware that we have been reviewing our ultrafast connectivity voucher and Access Broadband Cymru schemes. I'm pleased to confirm that it's my intention to continue offering a voucher safety net for the foreseeable future. Work is ongoing to streamline the application processes to enhance the experience of those accessing the vouchers. Members will be aware that the UK Government launched a UK-wide gigabit voucher scheme last month. I'm therefore reviewing the ongoing relevance of our ultrafast connectivity voucher scheme to avoid duplication or confusion, and I will update Members further on this ahead of the summer recess. Finally, I am also planning to introduce a novel scheme that supports communities not reached by our latest procurement, but also where voucher support may not be the answer. This approach will not be firmed up until the current procurement has concluded and we have clarity on where the successful suppliers will reach.

Access to broadband is clearly an important issue. However, for businesses that have access, it is equally important to get the most out of it to increase productivity, efficiency and add value. You will have seen the announcement today on the Cardiff University digital maturity survey. This survey shows that the more digitally engaged a business is, the more likely it is to succeed. Our investment in superfast broadband infrastructure and in our business exploitation programme is helping businesses to understand, adopt and exploit the benefits of superfast broadband, increasing turnover, profitability and enabling SMEs to introduce more products and services. I am pleased to see that local public bodies are also championing improvement to digital infrastructure, building on the success of Superfast Cymru in their areas. My officials are working closely with the North Wales Economic Ambition Board, the Cardiff capital city region and the Swansea bay region city deal teams, to help them develop and deliver their digital infrastructure strategies to ensure that they complement the work that we are doing. We are working with local bodies across Wales as they develop bids to the UK Government local full fibre network programme, so that Wales can benefit from the funding available where this can deliver local and regional priorities and complement our national schemes.

With the majority of premises in Wales now able to access superfast broadband, we need to focus on ensuring that homes and businesses take up the service so that they can make the best use of the technology for the benefit of the economy and for society generally. Take-up across the Superfast Cymru intervention area now stands at around 42.5 per cent, which means we're ahead of where we expected to be, and on course to meet our 50 per cent target much earlier than anticipated. This is encouraging and frustrating in equal measures, Deputy Presiding Officer. It is encouraging because the rate of growth is greater than modelled, but it is frustrating because there clearly is room for improvement. It is worth remembering that the greater the take-up, then the greater funding pot available to help reach the have-nots. We are continuing with our campaign to raise awareness of the availability and benefits of superfast broadband with home users. The integrated campaign uses public relations, advertising, events and social media targeted at a regional level. Today, the team are in Llanfair PG, talking to local residents about superfast broadband availability. I would again urge all Members to do what they can to increase take-up in their constituencies.

While broadband continues to be the main focus for many communities and businesses, I also receive calls for improvement to mobile coverage. We are making steady progress in delivering the mobile action plan. The consultation on 'Planning Policy Wales' ends this week, and the proposed changes recognise the wider contribution that telecommunications make to the economy of Wales, and the role of local planning authorities in positively planning for telecommunications in their development plans. This will be followed very shortly by a consultation on new permitted developments rights, including changes to those for mobile phone infrastructure. We have also recently undertaken a call-for-evidence exercise, where we have asked the mobile industry to provide clear evidence on the tangible benefits that introducing a reduction on non-domestic rates for new mobile masts might bring. Officials are currently reviewing that evidence.

We continue to engage with Ofcom to discuss regulation of the mobile industry, and have recently responded to their consultation on coverage obligation for their auction of the 700 MHz spectrum band next year. On 5G, I have asked Innovation Point to advise, stimulate and co-ordinate activity on 5G in Wales, including identifying opportunities to secure funding from the UK Government test bed and trials challenge fund. Our work to improve digital infrastructure is vital to underpin our commitments in 'Taking Wales Forward', and we continue to make good progress. As I have outlined above, I will be able to provide a further comprehensive update ahead of the summer recess.