Multi-million pound cost of ‘superfast broadband’

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TAXPAYERS in South Yorkshire are to shell out another £3.15 million on a superfast broadband project which has already cost £100m.

Digital Region Ltd, launched in 2010 to provide superfast internet across South Yorkshire, asked for an emergency cash injection from Sheffield, Rotherham, Barnsley and Doncaster councils.

The partnership, jointly owned by the local authorities and the Government, has already been given £100m of EU grants and council money.

But now the councils have agreed to shell out even more for the scheme, as they look for a private company to take over its running.

Digital Region’s last set of accounts showed it had brought in only £167,000 - dwarfed by operating costs which contributed to year-end losses in 2010/11 of £9.2m.

The councils have agreed to pump more money in and find a private sector company to operate the system.

Sheffield Council, which owns 17.5 per cent of the company, has agreed to put in an additional £1.2m, while Rotherham, Barnsley and Doncaster councils, which each own nine per cent, will contribute £630,000 each.

The Department for Business, Innovation and Skills will also have to contribute an undisclosed sum.

The department took over more than half the partnership after the founding group Yorkshire Forward was closed down by the Government.

Rotherham Council’s head of finance Andrew Bedford, who is overseeing the bail-out on behalf of the authorities, said the money would help Digital Region to move to a ‘new business model’ and address issues which had led to ‘benefits not coming through as fast as we had hoped’.

Mr Bedford added: “As with all council budgets we are facing a lot of significant pressures, but the point is we have made that investment and it’s about how we exploit that to the maximum.

“The project has been overtaken by events in terms of the broader picture, but it is not a disastrous project, we have the infrastructure in place and we now have to seize the opportunities it offers for job creation and getting the economy moving.”

David Cowell, chief operating officer of Digital Region Ltd said: “The build phase has been successfully completed to time and cost and, while the majority of the UK must wait until 2015 to experience superfast broadband, a phenomenal 80 per cent of South Yorkshire businesses and residents can already connect.

“Digital Region Ltd is delighted to move forward with the continued support of both the board and the central government and local authority shareholders.”