The government will shut down its Gigabit Broadband Voucher Scheme for small and medium-sized enterprises (SMEs) over a year earlier than planned when it runs out of money, by March 2020 at the latest and possibly much sooner.
The £67m scheme, run by the Department for Digital, Culture, Media and Sport (DCMS), was set up in March 2018, offering qualifying SMEs grants of up to £3,000 to cover the cost of installing a gigabit-capable fibre-to-the-premises (FTTP), or full-fibre, broadband service.
It was supposed to run until March 2021, but take-up has proven so extensive – 6,927 vouchers have been issued to date – that the funding pot will run dry much sooner than thought, said the government.
In light of this, DCMS is now reducing the maximum value of the vouchers available by £500 to £2,500 in the hope this will encourage neighbouring businesses to pool their resources and extend the scheme to more properties without the need for further funding. Neighbouring homeowners will continue to be able to benefit from the scheme as well as part of such group projects.
Digital minister Margot James said she expected over 1,000 additional businesses would benefit as a result of this change.
“Our modern Industrial Strategy is clear on the importance of connectivity, as we build a full-fibre Britain that is fit for the future. These vouchers provide practical and immediate help to firms struggling with slow broadband speeds. I encourage small businesses around the UK to apply now,” said James.
The minister added that DCMS would monitor take-up following the changes to determine if there were some locations where retaining the higher voucher value is justified.
Paul Stobart, CEO of network builder and internet service provider (ISP) Zen, said: “Britain has often been called a nation of shopkeepers, and the government’s plan to bring its small businesses into the 21st century is a good one, but it needs to go further.
“It’s clear there’s huge demand from them for better broadband, especially for those that rely on it for everything from fulfilling orders to building or maintaining a presence online. The government must continually invest in these areas if it wants to strengthen the backbone of the UK, and we hope to see projects like this as just the start of things to come.”
One of many businesses to have taken advantage of the voucher offer is Coventry-based Nuco, a supplier of paper and stationery products, which participated in a pilot version prior to the scheme’s official launch through its ISP partner WarwickNet.
Speaking to Computer Weekly earlier this year, Nuco IT and project manager Mark Langan said switching to a full-fibre broadband connection had paid off, particularly in light of a recent company-wide upgrade to Microsoft Office 365.
“We’ve been able to set up weekly Skype conferences with our suppliers and customers, meaning less time travelling to our suppliers in other countries and to UK customers,” said Langan at the time.
“One of the biggest benefits we’ve had is better connectivity for our Hong Kong team into the UK to be able to update our ERP systems. The increase in broadband speed has helped this company no end, so if anybody’s looking to upgrade, they should take advantage of it,” he added.
This is the second time DCMS has appeared to underestimate the demand for broadband services among small businesses.
A previous scheme to connect SMEs to superfast (24Mbps and above) broadband services closed earlier than planned in the autumn of 2015 after it too exhausted its available funding.
Despite a slow start, the previous scheme was remarkably successful, with over 55,000 businesses taking advantage of the £40m scheme, creating one new job for every four new connections, and increasing profits by an average of £1,300 per annum for each participating business.