Budget 2017 – more details on the Government’s full-fibre and 5G ambitions

Budget 2017 – more details on the Government’s full-fibre and 5G ambitions

Chancellor Philip Hammond delivered his Budget 2017 speech today, reiterating the Government’s objective to put the UK “at the forefront of the global technology revolution”. The Chancellor announced further details on the £23 billion National Productivity Investment Fund (NPIF) presented in the Autumn Statement and on the new Government 5G Strategy launched today.

Part of the NPIF funds will be allocated to support the market roll-out of full-fibre networks with £740 million to spend in digital infrastructure by 2020-21.

From this year, Government will invest £200 million to fund a programme of local projects “to test ways to accelerate market delivery of new full-fibre broadband networks”.  Following recommendations made by stakeholders including the BSG during the phase of consultation after the Autumn Statement, Government plans to allocate the funds to initiatives which will involve aggregating public sector demand, offering full-fibre connection vouchers to businesses where new networks are built, directly connecting public sector buildings, and opening up public sector assets to reduce the costs of deploying fibre.

This is in addition to a £400 million for a new Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years, helping to boost market ambitions to deploy full-fibre access to millions more premises by 2020.

The new 5G Strategy materialises the Government’s ambition to lead on and accelerate the deployment of 5G networks with the creation of a new £16million hub to trial and demonstrate 5G technologies. Section 5 of the Strategy usefully identifies the need to create a more supportive regulatory environment for the deployment of infrastructure and Ofcom will be undertaking further work in this area. Government will also decide by the end of this year whether to introduce changes to the planning and regulatory system to accelerate the deployment of 5G networks.

The BSG is currently exploring specific practical issues surrounding planning applications and variations of practices between local authorities across the country. We will publish our findings in the upcoming weeks.

Reference to businesses’ concerns over the revaluation of business rates that led to a fourfold rise for all infrastructure providers last year were made in the Chancellor’s speech… though not fully addressed. Government is promising to “find a better way of taxing the digital part of the economy. The part that does not use bricks and mortar”. Government will review how the revaluation could be made “smoother and more frequent”. We welcome Government’ steps to consider this issue, although no indication was made as to when a consultation on the regime will take place.

Finally, the Chancellor announced that Government will introduce UK VAT on roaming telecoms services outside the EU “in line with international standard practice”. Currently, UK VAT is applied to mobile phone use by UK residents when in the EU, but not when outside the EU. This measure is designed to “ensure mobile phone companies cannot use the inconsistency to avoid UK VAT”. It’s unclear how this might affect UK consumers.

“The BSG supports the investment that the Government has provided, and the additional detail delivered today but it is critical that Government develops its headline narrative to ensure that not just these schemes align but so do wider investment incentives.”

 

 

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