Watchdog raises concerns over need for £165m broadband subsidy

Project Stratum aims to improve broadband speeds at about 79,000 premises across Northern Ireland

The NI Audit Office has questioned whether all of a £165m subsidy to improve rural broadband was necessary.

Project Stratum aims to improve broadband speeds at about 79,000 premises across Northern Ireland.

In September 2020, telecoms firm Fibrus beat BT in a procurement process to deliver the scheme.

Shortly afterwards BT announced its own plans which included 16,000 premises which were within Project Stratum areas.

In April 2021, BT made a further announcement that it intended to invest £100m to expand the availability of 1Gbps broadband in Northern Ireland.

While it did not include details of precise premises covered, it did include villages in Project Stratum areas.

Auditor General Kieran Donnelly said the fact BT plans to invest in the Project Stratum areas raised questions.

"Project Stratum was intended to provide high-speed full-fibre broadband to the target intervention area on the basis that these areas were commercially unviable," he said.

"The fact that BT have now released plans to invest in the Project Stratum target intervention area raises questions about whether some of the premises included within the project were already commercially viable, and if the overall level of public subsidy afforded to this project was required."

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BT said it was normal that plans can change because of operational issues and the updated premises data it provided in September 2020 reflected changes to its commercial build and future plans.

The Department for the Economy, which provided the subsidy, told the Audit Office it was "satisfied that without the Project Stratum investment, the broadband connectivity gap between Northern Ireland and the rest of the UK would continue to exist".

The winning bid from Fibrus proposed to cover 97% of the 79,000 homes in NI with low broadband speeds

In his report, Mr Donnelly also said the scoring system used during the procurement process was "not sophisticated enough".

A spokesman for the Department for the Economy said it would review the findings of the audit report.

"The evaluation of tenders for Project Stratum was subject to robust assessment of information and evidence submitted by bidders against a broad range of criteria," the spokesman said.

"The department is confident that the procurement process adopted, along with key decisions taken in support of protecting the integrity of the intervention area and the awarded contract, are in the interests of both the public purse and citizens in predominantly rural areas of Northern Ireland, where lack of access to good broadband services is acutely felt."