A fibre optic broadband scheme in South Yorkshire has come under investigation following an announcement that it had recorded losses amounting to £9 million within its first year of being operational. Launched in 2010, the project is tasked with making super-fast fibre broadband coverage available to the whole of South Yorkshire and has so far built a fibre optic network totalling more than 350 miles across South Yorkshire.
The project was launched independently of the fibre broadband rollout schemes that BT and Virgin Media are currently undertaking, with investors hoping to offer to sell use of the network to internet service providers (ISPs) at wholesale price. However, reports are suggesting that the scheme has attracted little interest from the targeted ISPs, leading to the announcement of £9 million losses over the last year.
Funding for the scheme was provided by Barnsley, Rotherham and Doncaster town councils and Sheffield City Council, with agencies such as the European Regional Development Fund and Yorkshire Forward also contributing to the £92 million bill. Despite this impressive budget, according to figures filed with Companies House the scheme has so far only brought in £167,000 worth of revenue.
The BBC reports that Rotherham Council is leading the investigation into why the project has failed to entice more custom on behalf of the other authorities involved. Concerns were first raised by a scrutiny panel working for Barnsley Council in September 2011 who noted that the rollout of the new network had taken more time than had been expected.
Leader of Barnsley Council Steve Houghton said the scheme had not “been as effective as we hoped”. He also added that the investigation was being carried out to: “see what the pressures and issues are and to see if we can make sure we deliver the outcomes we are looking for”.
A report is expected from Rotherham Council in the next six weeks.