Business and Economy

Roll-out of superfast broadband continuing in Devon and Somerset

Photo of someone typing on a keyboardBroadband

Posted on: 3 October 2019

Councillors were assured today (Thursday 3 October) that work is continuing on delivering superfast broadband in Devon, despite Connecting Devon and Somerset’s (CDS) recent cancellation of contracts with broadband provider Gigaclear.

Councillor Rufus Gilbert, Devon County Council’s Cabinet Member for Economy and Skills, updated the authority’s Full Council about the on-going work of CDS.

CDS announced last month that it was ending Gigaclear’s five contracts to deliver full-fibre broadband in Devon and Somerset. CDS and the Government’s Building Digital UK (BDUK) agency were unable to agree an acceptable recovery plan with Gigaclear following the significant delays incurred by the company in its roll-out of full fibre broadband.

However, CDS’s roll-out is progressing with other providers and the commercial sector is also connecting communities across the region. Of the 47,000 premises Gigaclear was contracted to connect, around 15,000 have already been covered by other commercial providers while Gigaclear delayed.

Photo of Councillor Rufus Gilbert

Councillor Rufus Gilbert

Councillor Gilbert said: “BDUK and the Digital Minister are conscious of the timetable to launch the new CDS procurement process. We understand that Government decisions on capital funding for broadband programmes are to be made in November.

“CDS funding will deliver new coverage this year, the commercial sector will be delivering more, and we would want to see any new services procured by CDS completing as soon as possible. Ultimately, that will depend on the total funding available, how long the Government extends its funding, the number of homes and businesses we will need to help, and what providers can do for the money on offer. This is all part of the work we’re doing now with BDUK.

“Importantly, the commercial sector will also be continuing its investment in new broadband infrastructure. CDS will also be stepping up its community engagement to promote, help and advise those interested in taking up the national broadband voucher schemes.”

CDS is working closely with BDUK to launch a new procurement process this autumn, and is aiming to issue an invitation to tender in December to identify new provider(s) of these services. In the meantime, CDS is working on:

– The CDS Community Challenge Fund will be launched later this year, following successful pilots in Devon and Somerset. A £295,000 fund will enable local communities to have a hands-on say in new networks for their areas. It’s anticipated that between six and eight more community solutions can be supported and work has begun to identify opportunities, working with a range of suppliers.

– A new collaboration with BT will extend coverage in rural areas, delivering full fibre to a further 2,000 premises across Devon and Somerset. This is due to the take-up of CDS-funded broadband services being nearly 60% – compared with a national average of 52.4% – which, thanks to the Government’s gainshare agreement with BT, is generating millions of pounds of new money to invest in expanding the CDS coverage.

– Airband is continuing to make good progress with its roll-out superfast wireless broadband for CDS in northern and west Devon. CDS-funded contracts with Airband have so far delivered superfast access to over 12,000 homes and businesses. It is also providing a network to serve around a further 5,000 hard to reach properties in Dartmoor and Exmoor National Parks.

– CDS and BDUK are also working closely together to ensure as many residents and businesses have the opportunity to benefit from the Government’s national broadband voucher schemes.

Among the expected commercial investment in the area, Jurassic Fibre has announced a £250 million roll-out of a Gigabit-capable full fibre broadband network by the end of 2025. The first phase is due to start this autumn in east Devon communities stretching from Exeter Airport to Exmouth.

Government officials at the Building Digital UK agency have confirmed that extending the Government’s £18.7 million of funding for the CDS programme is a top priority in the agency’s spending commitments, and that this was reaffirmed by the Digital Minister personally when he met with CDS recently. This meeting confirmed that BDUK is aiming to put forward its own funding case to Treasury as part of the spending decision process to support CDS, as well as other programmes that are in delay through the superfast scheme and, looking to the future, the opportunities from the Government’s £5 billion programme to support the roll-out of full fibre, 5G and other gigabit-capable internet networks in the hardest to reach 20% of the country.

Nearly one million homes and businesses in Devon and Somerset now have access to superfast broadband thanks to the Government supported CDS programme and stimulation of the commercial market which is an important element of CDS’s role.

Over 300,000 homes and businesses have access to superfast broadband as a direct result of investment by CDS.

Superfast coverage funded by CDS is as high as 59% in some rural districts – and 82% in one – compared with the average 33% that Government estimated the public sector would need to fund.

CDS is also working with the Heart of the South West Local Enterprise Partnership and other partners to develop a Digital Strategy and a refreshed Local Broadband Plan.

6 comments on “Roll-out of superfast broadband continuing in Devon and Somerset

  1. Graham Long says:

    As “Devon Newscentre” does not give their real name, I don’t know who is replying to me but let me correct some of your latest statements:

    I don’t think anyone learnt very much from your November 13, 2014 Bidder Information Day in Exeter Library, the invitation to which said “The Procurement Team are looking to launch an ITT with a value in the region of £40M”. After Iain Perkins gave a brief overview of your SEP Phase 2 open market procurement process, the audience was told that the CDS representatives in Exeter Library would not take questions and you nearly had a riot on your hands with potential suppliers demanding to ask questions in open forum. Remember that? What Iain and your Bidder Day Invitation did confirm was that you intended publishing the ITT in the OJEU on Nov 20; requiring Tenders to be submitted by Jan 12, 2015; shortlisting Tenderers by Feb 13; starting due diligence and finalising the contract from March 16 and awarding a contract on April 1, 2015. (A prophetic date perhaps?). Representatives from 33 companies attended the Nov 13, 2014, Bidder Day (including BT and Openreach) and you now choose to call this “limited commercial interest”. You may have never got to publish the ITT in the OJEU, but this was CDS’s first SEP Phase 2 procurement attempt which failed. (Procurement failure No 1)

    CDS may have, at some time soon after Nov 13, 2014, decided to then run a procurement through the BDUK National Framework instead but when you did so, CDS knew that you were in fact offering the contract to ONE supplier, BT. That is because Fujitsu did not “subsequently” withdraw from the Framework as you claim, leaving BT Openreach the sole contractor on the Framework, because Futisu had already withdrawn from the Framework in March 2013, one year earlier! See: https://www.ispreview.co.uk/index.php/2013/03/fujitsu-withdraws-from-all-remaining-broadband-delivery-uk-procurements.html
    As this article says, “so much for the competitive tender” and CDS knew at the time you embarked on using the Framework, that BT Openreach were the only Framework supplier available. When a supplier has no competitor you have no reason to be surprised when that supplier, BT Openreach, did not offer you the “value for money” you may have got had Fujitsu remained a Framework supplier and thus competitor, back in 2013. Whether you call it a procurement process or a negotiation, CDS are on record as saying BT Openreach were not offering value for money, but BT are also on record saying that the funding CDS offered meant they “estimated it would take them more than 15 years to get a return on their investment” and “we [BT] welcome working with CDS, but of course any agreement has to be based on what can realistically be achieved” (Procurement failure No 2.)

    You claim that “CDS was never going to be hurried into accepting a poor value for money bid” but when you abandoned the Nov 13, 2014 open market procurement and embarked on the Framework procurement anyone with any sense would have known that having only one remaining Framework supplier (BT) meant you would end up with a “poor value for money bid”.

    Nonetheless, CDS wasted the best part of a year holding “lengthy discussions” (to quote Cllr A Leadbetter) on an exclusive bid by BT and by the time that fell apart CDS (and yes, some other local bodies also) had missed the date set under EU state aid rules for having SEP Phase 2 contracts in place. CDS takes every opportunity to say it is the largest procurement programme of it’s kind in England, implying bigger is better. It is also the case that CDS acted as a test bed for the Phase 1 BDUK Framework contract, giving CDS a supposed head start on procurement. Despite all this CDS has turned out to be one of the slowest local bodies to get Phase 2 completed, proving that bigger is not better. Having been allocated Phase 2 funding in 2012, a supplier (or suppliers) for the vast majority of CDS Phase 2 properties will now not be in place until November 2020, at the earliest – eight years after CDS were allocated Phase 2 funding. (Procurement failure No 3.)

    Without knowing what caveats and assumptions Gigaclear and Airband stated in their tenders I cannot comment on how reasonable they found the timescale CDS set for Phase 2 completion in 2020, the date that EU state aid approval mandated when funding was allocated in 2012. Comparing the roll out timescale for a fixed wireless solution requiring only masts and antennas to be installed with a much larger future proof full fibre roll out requiring point to point fibre and ducts to be laid underground is in the least disingenuous considering the Airband contract was signed over a year before the five Gigaclear contracts.

    All this now becomes academic because although CDS suspended the five Gigaclear contracts on October 30, 2018 for the five reasons you list, which are admitted by Gigaclear, it also correct that CDS could not and still cannot extend Gigaclear’s, or anyone elses, contracts beyond the 2020 contractual end date approved by the EU for state aid subsidy. Infront of DCC’s CIRS Scrutiny Committee on September 26, CDS Director Keri Denton, confirmed that as of today CDS cannot agree supplier contracts with anyobody that go beyond 2020, because DCMS and HM Treasury have failed to provide the £18.7M contract extension funding that CDS and Devon & Somerset MP’s requested DCMS and HM Treasury to make available in Feb 2019.

    Keri Denton told Scrutiny that the £18.7M may be made available in November when she confirmed that a fourth attempt at Phase 2 procurement would be launched in early 2020, once the ongoing OMR has been completed and she expected to then run another open market tender procurement and sign contracts with supplier(s) in November 2020. Not only is CDS now gambling on getting the £18.7M funding from HMG by Nov 2020, CDS is also gambling on getting a share of the £26M BT gainshare/clawback monies from Phase 1 that may or may not then also be used to subsidise Phase 2.

    As previously stated, to make a mistake is a learning experience, to make the same mistake a second time is an error, to make the same mistake a third time is incompetence. CDS and the CDS Board have now attempted three Phase 2 procurements thereby demonstrating their incompetence. Devon & Somerset taxpayers have no confidence in the CDS Board’s and CDS’s ability to deliver on a fourth procurement attempt. They must be replaced.

  2. Graham Long says:

    OK Let’s try this:

    The history of CDS’s three attempts at securing suppliers for their Phase 2 rural broadband programme:

    – Following the allocation of £26.75M to CDS for Phase 2 in 2012, CDS started their first procurement round, announcing an open market tendering process in Exeter on November 13, 2014. (Procurement round one)
    – In December 2014, CDS abandoned this open market tendering round after they learnt that BT Openreach (CDS’s Phase 1 supplier) would refused to bid on an open market tender.
    – During 2015, CDS attempted to negotiate an exclusive Phase 2 contract with BT Openreach (Procurement round two), which CDS had the right to do because it would then become an extension of CDS’s Phase 1 contract with BT Openreach.
    – Late in 2015, negotiations between CDS and BT broke down with BT claiming CDS were not putting enough of the £26.75M into the contract and CDS saying BT were not prepared to put sufficient investment of their own into the programme.
    – By the time contract negotiations with BT collapsed in acrimony, CDS had exceeded the 2015 date for agreeing Phase 2 supplier contracts as set by the EU under EU State Aid Rules and DCMS/BDUK had to go back to Brussels to negotiate a new contract schedule for CDS with the EU. After Competition Commissioner Margrathe Vestager got involved, the EU did agree that CDS could run a third procurement round but they set special conditions as follows: (a) Superfast broadband had to be defined as 30Mbps, not 24Mbps as was the case for Phase 1 and all other Phase 2 county broadband contracts. (b) The contract for Devon & Somerset had to be divided into six contracts to encourage smaller suppliers, and (c) the required contract completion date of 2020 as set in 2012 had to still stand despite the fact that this would leave suppliers with must less time to deliver the programme than was previously the case.
    – On July 19, 2016, CDS held another “bidder day” in Taunton (Procurement round three) and at the end of December 2016 (five years after they were allocated Phase 2 funding), CDS finally awarded five of the six contracts to Gigaclear and one (North Devon) to Airband. All broadband property connections to be provided by Gigaclear would be full fibre with maximum speeds of 1,000Mbps up and down and both Gigaclear and Airband were given just three years to compete the contracts.
    – The five contracts with Gigaclear included a public subsidy of £31M from CDS along with an investment of £60.5M from Gigaclear to connect 47,810 properties in the two counties. Gigaclear further committed to invest another £67.3M to extend the publicly subsidised fibre network to connect another 43,000 premises in the two counties, making 89,810 property connections in total.
    – Laying underground fibre to 47,810 properties is by definition a major civil engineering project. The Institute of Civil Engineers say that 67% of all such contracts overrun their agreed completion date, so it should not have been a surprise when Gigaclear told CDS in July 2018 that they would not deliver the contracted number of connections at the end of September 2018. Under EU State Aid rules CDS have no authority to continue their Phase 2 contracts beyond 2020. CDS therefore suspended all contract payments to Gigaclear as of September 30, 2018 and that has not changed until CDS cancelled the five Gigaclear contracts on September 12, 2019.

    • Hi Mr Long,
      Just to clarify on some of the points you have raised:

      – Following the allocation of £26.75M to CDS for Phase 2 in 2012, CDS started their first procurement round, announcing an open market tendering process in Exeter on November 13, 2014. (Procurement round one)

      This is incorrect. CDS held a Bidder Information Day to assess commercial appetite for potential bids. It is a normal and prudent pre-procurement exercise.

      – In December 2014, CDS abandoned this open market tendering round after they learnt that BT Openreach (CDS’s Phase 1 supplier) would refused to bid on an open market tender.

      Incorrect. It had nothing to do with BT Openreach or any provider. The pre-procurement engagement identified limited commercial interest in an open market tender for large area contracts supported by public subsidy. In consultation with BDUK, CDS decided it was more efficient therefore to undertake a twin track approach: 1) conduct a procurement through the Government’s National Framework for the majority of the Phase 2 contract area; 2) launch an open market procurement limited to the two National Parks. The latter leading to the successful award of a contract to Airband.

      – During 2015, CDS attempted to negotiate an exclusive Phase 2 contract with BT Openreach (Procurement round two), which CDS had the right to do because it would then become an extension of CDS’s Phase 1 contract with BT Openreach.

      Incorrect. CDS launched a procurement using the Government’s National Framework. Subsequently, Fujitsu withdrew from the Framework leaving BT Openreach the sole contractor on the Framework.

      – Late in 2015, negotiations between CDS and BT broke down with BT claiming CDS were not putting enough of the £26.75M into the contract and CDS saying BT were not prepared to put sufficient investment of their own into the programme.

      Incorrect. This was a procurement process, never a negotiation. The process identified that the bid was poor value for public money and did not meet the contract terms.

      – By the time contract negotiations with BT collapsed in acrimony, CDS had exceeded the 2015 date for agreeing Phase 2 supplier contracts as set by the EU under EU State Aid Rules and DCMS/BDUK had to go back to Brussels to negotiate a new contract schedule for CDS with the EU. After Competition Commissioner Margrathe Vestager got involved, the EU did agree that CDS could run a third procurement round but they set special conditions as follows: (a) Superfast broadband had to be defined as 30Mbps, not 24Mbps as was the case for Phase 1 and all other Phase 2 county broadband contracts. (b) The contract for Devon & Somerset had to be divided into six contracts to encourage smaller suppliers, and (c) the required contract completion date of 2020 as set in 2012 had to still stand despite the fact that this would leave suppliers with must less time to deliver the programme than was previously the case.

      Incorrect. CDS was always aware of the expiry date of the State Aid approved National Broadband Scheme (NBS). However, CDS was never going to be hurried into accepting a poor value for money bid. Government-led negotiations on a new NBS were already underway and received the full co-operation of CDS in its development. It’s important to note that the new NBS was not created solely for the benefit of CDS or as a result of CDS’ procurement process. The truth is there were a number of broadband programmes that required the umbrella of a new State Aid approved NBS. Furthermore, the “special conditions” — a) b) and c) – to which Mr Long refers were in fact requirements set by the European Commission for the Government’s NBS and not related to previous CDS procurement activity.

      – On July 19, 2016, CDS held another “bidder day” in Taunton (Procurement round three) and at the end of December 2016 (five years after they were allocated Phase 2 funding), CDS finally awarded five of the six contracts to Gigaclear and one (North Devon) to Airband. All broadband property connections to be provided by Gigaclear would be full fibre with maximum speeds of 1,000Mbps up and down and both Gigaclear and Airband were given just three years to compete the contracts.

      Gigaclear and Airband were happy to tender and fully aware of the timetable for delivery when they did so. They were confident they could achieve the required targets on time. Indeed, Airband remain on target to complete their contract on time and on budget.

      – The five contracts with Gigaclear included a public subsidy of £31M from CDS along with an investment of £60.5M from Gigaclear to connect 47,810 properties in the two counties. Gigaclear further committed to invest another £67.3M to extend the publicly subsidised fibre network to connect another 43,000 premises in the two counties, making 89,810 property connections in total.

      Correct.

      – Laying underground fibre to 47,810 properties is by definition a major civil engineering project. The Institute of Civil Engineers say that 67% of all such contracts overrun their agreed completion date, so it should not have been a surprise when Gigaclear told CDS in July 2018 that they would not deliver the contracted number of connections at the end of September 2018.
      Under EU State Aid rules CDS have no authority to continue their Phase 2 contracts beyond 2020. CDS therefore suspended all contract payments to Gigaclear as of September 30, 2018 and that has not changed until CDS cancelled the five Gigaclear contracts on September 12, 2019.

      Incorrect. Whilst it is indeed a major civil engineering project – a point CDS has made many times — Gigaclear admitted itself in November, 2018, that there were five main reasons for the company’s delayed roll-out in the CDS programme, exposed by the collapse of Carillion telent, Gigaclear’s civil contractor:
      • Poor operational capacity and decision-making within Gigaclear.
      • Lack of contractor capacity
      • Slow deployment by contractors.
      • Lack of detailed planning.
      • Failure to redesign the build methodology.
      It is also incorrect to claim CDS suspended all contract payments because of State Aid. CDS did not pay Gigaclear because Gigaclear did not meet its contract targets. Payments were to be made every time Gigaclear reached a contract target or “milestone”. Had Gigaclear done so, then CDS would have had legal duty to pay up. The fact that Gigaclear only completed 496 premises by the end of June, this year, compared to a contract target of 28,689, speaks for itself.

  3. Graham Long says:

    Keri Denton protested to the DCC, CIRS Scrutiny Committee CDS have so far only run two abandoned procurement attempts. That is wrong, CDS have run three failed procurement attampts: (1) An open procurment on Nov 13, 2014. (2) An exclusive procurement from BT which CDS abandoned in 2015 after they exceeded the EU deadline for having contracts in place (and necessitating a further delay while BDUK negotiated a new contracting deadline with the EU, who refused to extend the 2020 completion date) and (3) CDS’s third procurement tendering round of July 19, 2016 which resulted in the five contracts with Gigaclear. To make a mistake is generally regarded as a learning experience. To make the same mistake a second time is an error. To make the same mistake a third time is incompetence. CDS have now abandoned three procurement attempts. Such a failed organsisation does not deserve to be allowed to make a fourth attempt.

    • Hi Mr Long,
      Unfortunately the claim about procurements being abandoned is wrong.

      1) The first Phase 2 procurement involved two tenders:
      • the successful award through open tender of a contract to Airband which has delivered superfast broadband access to around 5,000 homes and businesses in Dartmoor and Exmoor National Parks.
      • And, following an early engagement with the market to assess commercial appetite for potential bids, an invitation to tender through the Government’s National Framework. This led to a bid which was correctly identified as poor value for public money and failing to comply with contract terms. As a result, CDS rejected the bid and did not proceed to contract award.

      2) A second procurement process was successfully completed and led to the award of six contracts;
      • one to Airband which has delivered superfast broadband access to 7,369 homes and businesses with a further 3,500 due in the next quarter
      • five to Gigaclear through competitive tender, vetted and approved by BDUK, which have now been terminated due to a failure to meet contract targets and provide a recovery plan that CDS and BDUK could support with confidence.

      In each case the procurement process has been followed correctly and audited, receiving a clean bill of health. At no point did any of these processes fail nor were they abandoned.

Leave a Comment

Your email address will not be published. Required fields are marked *

 

Comments are held for moderation. House rules

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Posted in: Business and Economy | Community | DCC Homepage