Sunak’s £1bn plan to tackle rural mobile ‘not spots’ at risk, warn MPs

The Government’s £1bn plan to tackle so-called mobile signal “not spots” in rural areas is at risk from surging costs, MPs have warned.

In a report published on Tuesday, the Public Accounts Committee (PAC) said there had been “significant cost challenges” in the scheme and warned that officials remained uncertain what the final bill would be.

Building Digital UK (BDUK), the arm’s-length body overseeing the programme, has said that mobile operators will cover any additional costs as part of their licence obligations.

However, regulator Ofcom may grant operators relief from these obligations if the costs are deemed to be excessive. The PAC warned that if Ofcom were to grant such relief, the programme could be at risk.

BT-owned EE, Vodafone, Virgin Media O2 and Three are collaborating on the industry-wide scheme, dubbed the Shared Rural Network (SRN).

Under the first phase of the plan they will tackle so-called “partial not-spots”, where at least one operator provides coverage but not all of them.

Phase two, which will be funded by the Government, will target “total not spot” areas, where no operators currently provide 4G services.

Ministers have set a target of reaching 95pc of the UK’s landmass by the end of next year.

However, the costs of delivering the programme have surged, casting doubts over who will shoulder the additional bill or whether the target will be met on time.

In one area of the programme, where the Home Office is opening up masts built for its Emergency Services Network to commercial operators, costs are estimated to have risen by £44m as a result of irrecoverable VAT and inflation.

Mobile networks have also warned that the cost of the second phase of the programme is set to exceed the current level of government funding.

The PAC said ministers were considering options to absorb the additional costs, including by attempting to meet the required increase in 4G coverage with fewer mobile masts.

It marks the latest setback for the SRN after three of the UK’s four mobile network providers warned they would miss the deadline for the first phase of the scheme.

Vodafone, Three and Virgin Media O2 asked ministers for an 18-month extension to the deadline of reaching 88pc of the UK’s landmass by next month, blaming the pandemic and difficulties in securing planning permissions for the delays.

However, this request was denied, raising the prospect that the companies could face a hefty fine from Ofcom.

In its report, the PAC said the Government had still not confirmed which specific areas are in the 5pc of UK landmass that will not be covered by the scheme and what the plans were for delivering connectivity to these locations.

The MPs also took aim at ministers for failing to identify the specific benefits they were aiming to achieve in rural areas and failing to articulate what they have achieved from investing taxpayer money in 5G to date.

The Department for Science, Innovation and Technology declined to comment. Ofcom has been contacted for comment.