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Bring the broadband: can better connectivity level up Britain’s economy?

25 February 2020: the government’s pledge to ensure every UK household and business has access to gigabit-capable broadband is ambitious, but could play a large part in its goal to “level up” the economy. How feasible are these plans, and what benefits could it bring UK PLC? William Ham Bevan investigates.

 Fast, reliable broadband connectivity is vital to a successful economy. It’s a big priority for the accountancy profession, with its increasing reliance on cloud-based tools and the need to satisfy the demands of the government’s Making Tax Digital plans.

The UK currently lags behind other developed nations in access to fast broadband. Last year, it ranked 34th in the annual M-Lab/Cable.co.uk Worldwide Speed League survey, behind 24 other European nations. What’s more, there are huge disparities in speed between different areas of the country.

To tackle this, the government pledged £5bn in its election manifesto toward providing gigabit-capable broadband – a speed seen as the gold standard – to every household and business in the UK by 2025. This would concentrate efforts on remote rural areas that have traditionally been ill-served. 

With both domestic and business users consuming more bandwidth than ever before, it’s a timely intervention. Ofcom figures suggest that both fixed and mobile internet connections used about a quarter more data in 2019 than 2018.

However, the current proposals are watered down from Prime Minister Boris Johnson’s earlier promise to provide full-fibre broadband – that is, a fibre optic cable link – to every address in the UK, which some critics considered over-ambitious. Instead, it’s now assumed that gigabit-per-second speed will be delivered via a mix of different technologies.

In some places, this will still involve laying fibre optic cable to the premises. Currently, many who use it rely on a fibre optic link only to the nearest street-level cabinet, with the so-called “final mile” (sometimes no more than a few yards) connected via copper cables.

Elsewhere, it seems more likely that faster speeds will be achieved by co-opting Virgin Media’s existing hybrid cable network. This is thought to happen largely through the use of 5G masts, which deliver a fast, wireless connection over the “final mile”. It’s believed that the government will try to broker shared-service agreements between the two companies that provide masts for the UK’s mobile networks, so that all end-users can benefit regardless of their service provider.

Are the government’s ambitions achievable? Alan Burkitt-Gray is Editor-at-large for Capacity Media, which provides specialist news and analysis for the telecommunications industry. He says: “It’s purely a matter of capital investment, and my guess is that a lot of the money will go on mobile masts and infrastructure. If you live in a rural area, that’s the easiest way. 

“You don’t want to lay fibre down a farm track that has only one customer at the end. It doesn’t make economic sense when you can deliver the same speed on a 4G or 5G signal, and also increase coverage for everyone nearby.” 

But what does this mean for those in areas where, up until now, access to fast, reliable broadband has been lacking? Better connectivity will open up a range of options previously out of reach to these individuals and businesses. 

Those in less-connected areas have had to take a watching brief while businesses and accounting firms have reaped the benefits of cloud technology. If the government fulfils its pledge, hopefully a new range of options to boost productivity will become available.

However, the 2025 pledge date may come too late for some. An oft-repeated criticism of the government’s plans to digitise the tax system has been that access to broadband inhibits some users’ ability to access the necessary tools required to file tax submissions and returns.

With Making Tax Digital for VAT well underway, and the income tax stream currently due to come online in 2021, taxpayers may be left looking for the government’s guidance on exemptions based on digital exclusion.

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