I will first speak about the need for rural broadband, particularly of the superfast variety, in Cheshire East. I will then go on to describe the benefits it will provide for that area and the wider region, to talk about the gaps in coverage and funding, and to ask for reassurances and a response from the Minister.
Cheshire East council considers that investment in superfast broadband is the single greatest action that can be taken to drive economic growth and improve the quality of life of residents. The area served by the council includes my constituency of Congleton and those of Macclesfield and of Crewe and Nantwich, and I am grateful to the Members who represent those constituencies for being here today, and also to my hon. Friend the Member for Warrington South (David Mowat), to whom I will refer later.
The local enterprise partnership has designated the roll-out of superfast broadband across the area, and across the wider area of Cheshire West and Warrington, as its top priority. The Cheshire and Warrington superfast broadband partnership has been established by three local authorities—Cheshire East, Cheshire West and Chester, and Warrington—which, working together, aim to achieve 100% superfast broadband coverage by 2015. To maximise the economic, social and environmental benefits for businesses and residents right across the region, that aspiration exceeds Broadband Delivery UK’s 90% target. Much of what I say today will be in support of the work of that partnership, and I shall highlight the needs of constituents in Cheshire East.
The economic growth that the area needs, particularly to provide jobs for the next generation, will largely be driven by small businesses, and in my constituency it will be almost entirely so, because almost all its 4,000 or so businesses are small. They need the high speeds that superfast broadband provides to be able to compete nationally and globally with their more urban competitors that already have the service. Superfast broadband will enable them to offer existing services at lower costs, expand their market reach, increase productivity, develop new products and provide new services. The area needs high-speed broadband not only to ensure that existing businesses develop but also to attract new ones, but the benefits would not be for just businesses. I heard recently of a business man who was considering relocating to the area but was deterred by his school-student son, who said that he did not want to move because of the poor broadband connections.
It is not just the young who want high broadband speeds; the elderly, and the public and voluntary sectors that serve them, recognise the transformational social impact that comprehensive superfast broadband can bring, through technology that supports health care delivery. This includes telehealth, which is the remote capture of information for clinical review, telecare, which is a range of alarms and sensors in the home to enable independent living, and medical consultations through video teleconsultation. In the Cheshire East area, with its considerably higher than average ageing population, the benefits would be substantial. An excellent example, which demonstrates how the council is keen to capitalise on the use of technology to benefit older people, is the recently developed DemenShare scheme. This is a web-based scheme through which dementia sufferers and their carers can access and share support and know-how.
The need for superfast broadband in rural areas is well documented, and Cheshire East has a higher level of rurality than one might realise.
I am pleased that my hon. Friend has secured this important debate, and I welcome much of what I have heard about the introduction of high-speed broadband in Cheshire East. However, the benefit will be spread much wider than the residents of Cheshire because many of my constituents receive their broadband and their telephone line through the Congleton exchange.
That is a point well made. Staffordshire Moorlands is a highly rural area, and it will benefit exponentially from the support.
Cheshire East is 64.4% rural. Rural areas can benefit disproportionately from investment in superfast broadband, and they are there to be benefited. The growth rate in VAT-registered businesses in rural areas is 2.7%, compared with a decline of 0.3% in England and Wales as a whole. Home-based businesses are becoming increasingly important in rural economies. An academic study by Mason and others reported that 50% of businesses in rural areas are home based, compared with 26% in urban areas. In a more local study—of Alsager, in my constituency—of which I was advised by the Alsager partnership, it was calculated that approximately one in 10 homes hosts some form of home-business working.
Bearing in mind the historically low levels of state-funded investment in recent years in many rural areas—including in my constituency and in Cheshire East as a whole—compared with their urban counterparts, there is significant potential to add economic value through superfast broadband investment. England’s rural areas host at least 27% of the country’s enterprises but only 9% of its business revenue. There is genuine potential, and superfast broadband is the platform for unleashing it in Cheshire East.
Turning to the benefits that superfast broadband coverage will provide, I have already touched upon those for the rural economy and for older people. In addition, exponential benefits can be gained in this region as a result of the already-skilled entrepreneurial population. The area is home to a high proportion of knowledge-based industries. In my constituency, there is already a significant presence of digital and creative industries, with a potential for great growth that could be magnified by the benefits of comprehensive superfast broadband coverage. Lying as it does just beyond the main commuter belts of Manchester and Liverpool, the high-level digital connectivity to new business provided from MediaCityUK in Salford has a particular potential to provide transformational impact, both in strengthening existing businesses and in promoting the area as a business location of regional significance. For example, a graphic designer who is able to download large files quickly could work efficiently mainly from home in Cheshire East, with occasional face-to-face meetings in MediaCityUK.
Turning to the educational benefits for our young people, educational attainment is higher than average in Cheshire East, and that is important because young people are likely to adopt superfast broadband and play an important role in using it to create and distribute content. In a constituency from which a disproportionate number of young people have migrated in recent decades to find work, it is particularly important for the intergenerational balance of our communities that we provide work for, and retain, young people within the area, and superfast broadband will be a key factor in ensuring that. In other words, the social and economic returns to the region—and, in turn, the support for the national economy—from investment in superfast broadband through a combination of private and Government funding will, I am assured, be disproportionately greater in the Cheshire and Warrington area than in many other regions.
I congratulate my hon. Friend on securing the debate. It is fair to say that some of the issues she has raised and the opportunities she has identified are similar across the border in north Wales. Does she agree that in rural areas an industry that would benefit greatly from increased access to fast broadband is the traditional agricultural community? In view of all the paperwork and forms that have to be completed online these days, that community needs superfast broadband.
I agree, and I thank my hon. Friend for that intervention. When I speak of the rural economy, I speak on behalf of the farming community in my constituency.
What current gaps in coverage and funding do Cheshire East and the wider Cheshire and Warrington sub-region seek to cover through the superfast broadband initiative? At present, 67% of the population of Cheshire East is covered, a figure provided by Ofcom in August 2011. That figure will increase to 86% by next year through private investment, mainly from BT, leaving a 14% gap representing 50,932 Cheshire East residents. The funding allocation for the area from Broadband Delivery UK will bring the figure up to 90%, but there are complications with the date and procedure for releasing that funding. I will return to that issue later.
The Cheshire and Warrington superfast broadband partnership is also seeking funding from the European regional development fund, but ERDF allocations will not be finalised until March 2012. Meanwhile, the BDUK approval framework will not be concluded until May 2012, leaving a disconnect between the two sets of funding, which are effectively interdependent. I am grateful to the Minister for having met me and representatives from Cheshire East some weeks ago to discuss the issue. I will appreciate his comments today, after his agreement to look into it. Underwriting such funds could be a considerable stretch for local authorities in these constrained economic times.
I congratulate my hon. Friend on securing this important debate and recognise some of the concerns that she is discussing, particularly broadband access in communities such as Rainow—which I think she will mention in a minute—those in the peak district such as Wincle and Wildboarclough, and Flash in Staffordshire Moorlands. Is it not important for Government to signpost further and give local authorities such as Cheshire East greater support in securing access to those funds? It is not clear how to secure them quickly and in a co-ordinated way.
I agree entirely that the picture is confused and detailed. As I will mention later, it is also split among Departments.
The total funding needed to achieve our aspiration of 100% broadband coverage across the Cheshire and Warrington area by 2015 is £40 million. Although we welcome the BDUK funding support, we recognise that under current plans, it will increase coverage only to 90%. The rural areas to which my colleagues have referred will be among that 10%.
I, too, congratulate my hon. Friend on leading the charge in this debate and on this subject. During her remarks, I think I have heard the word “rural” two dozen times. Does she accept, however, that it is also an urban issue? In parts of Warrington, urban development has massively outstripped broadband infrastructure capability, and the need there is as great as in some of the rural areas mentioned by her and others.
I agree entirely. Chapelford, which I know well from my time as a Warrington councillor, is one such area. One cause of difficulties is that although approximately 85% of telephone exchanges can be upgraded, about 15% of telephone cabinets are deemed by the private sector to be uneconomic or unfeasible to upgrade. BDUK financial support will not necessarily include those, either. Will the Minister comment on how they will be provided for, particularly in the areas to which we have referred?
In some areas, broadband coverage appears on paper to be provided, but the area contains white spots. Timbersbrook in my constituency is a good example—it has no adequate coverage at all—as is the Congleton business park. In the neighbouring constituency, the village of Rainow, only a couple of miles outside Macclesfield, is similarly affected. I heard a councillor for the area say only this week that it is faster to post a letter than to use the internet there.
I join the chorus in congratulating my hon. Friend on securing this debate, which is timely given the efforts being made in Cheshire East to introduce superfast broadband across the county. Will she add to that list some areas in my constituency? Businesses have contacted me that are already operational and want to expand, but are frustrated by extremely poor telecommunications infrastructure. If we are to attract new businesses to our county as well as keeping existing ones, we must ensure that we can provide them with that secure future.
Absolutely. If we in the county of Cheshire are to achieve our aspiration to compete with the northern cities, we need that infrastructure in place for our businesses.
Funding is available from the European regional development fund—£43 million has been allocated to the north-west region as a whole—and Cheshire and Warrington will bid for £15 million to add to the £3.24 million in BDUK funding and the £430,000 secured from the rural development agency. It is hoped that the balance of the required money will be matched by the private sector. However, the £15 million bid to the ERDF is aspirational. We believe that Cheshire and Warrington have a strong case for the additional economic and social benefits that investment from the fund would secure for the local, regional and national economies, and a strong case within the north-west for securing that sum.
I am aware that there are other bidders to the ERDF funds for the north-west allocation for superfast broadband. Any comments or suggestions from the Minister on how funding towards superfast broadband in Cheshire East and the wider region might be secured from alternative sources, should our £15 million bid not be successful, would be appreciated. Will he also confirm whether today’s announcement from Europe of a further £8 billion in superfast broadband funding is new money? If so, how can our aspiration, and those of other areas of the UK, to attract money from that funding provision be improved?
I seek further support from the Minister on streamlining the time frame for the BDUK and ERDF funds. Also, as my hon. Friend the Member for Macclesfield (David Rutley) mentioned, interdepartmental help could be provided to streamline the complex application process for local authorities.
I congratulate my hon. Friend on securing this debate. I am grateful to her for mentioning my home town of Rainow. I wonder whether she can do something about the mobile phone signal, which is also weak. Earlier, she mentioned young people leaving Cheshire, Congleton and so on. Young people need places to live, and there is a shortage of affordable homes for newly-weds and young people. Does she agree that any future planning permissions should include good broadband provision as a condition?
I agree entirely. I thank my hon. Friend for his intervention; his constituency is part of the Cheshire and Warrington partnership area.
At present, various Departments are involved in funding streams. The Department for Culture, Media and Sport—we are grateful for the Minister’s presence here—is responsible for the BDUK allocations, while European funding for broadband lies within the remit of the Department for Communities and Local Government, and rural development funding is under the control of the Department for Environment, Food and Rural Affairs. In summary, Government support, which is much appreciated and clearly demonstrates the importance the Government place on this issue, is found across Departments. Any help the Minister can give to ensure that funding streams, time scales and application procedures are harmonised would be appreciated.
While I am discussing Government support, I commend the Government’s work on digital inclusion through the website Race Online 2012, which is dedicated to promoting digital inclusion among older people. I ask that similar thought be given to promoting small businesses’ use and maximisation of the benefits of technology, particularly superfast broadband, perhaps through a national business-focused campaign similar to Race Online 2012. It would encourage a groundswell of interest from businesses, which could in turn encourage much-needed additional private sector investment.
In conclusion, it is projected that a superfast broadband-enabled Cheshire and Warrington could add up to £197 million of growth annually to the region, create 5,500 jobs in the area over the next 10 years, and provide innumerable valuable social and economic benefits to the whole connected community.
I am grateful for the opportunity to serve under your chairmanship, Mr Hood. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing this debate. She and I have already met executives from Cheshire East council to discuss the issue. I also know from her own personal history that, before entering the House, she did some extraordinary work in her local community, which she continues to represent forcefully now that she is in Parliament. There could not be a stronger champion than her for broadband in her part of the world. I also thank my hon. Friends the Members for Macclesfield (David Rutley), for Staffordshire Moorlands (Karen Bradley), for Crewe and Nantwich (Mr Timpson), for Aberconwy (Guto Bebb), for Warrington South (David Mowat) and for Weaver Vale (Graham Evans) for their interventions, which show the astonishing amount of engagement and interest from colleagues in this important issue.
I want to use the brief time remaining to outline the progress that we have made in bringing greater broadband access to rural areas, and to try to answer some of the specific points that my hon. Friend the Member for Congleton has made. It is the coalition Government’s aim to have the best superfast broadband network in Europe by the end of this Parliament, with 90% of households having access to superfast broadband, and universal broadband access of at least 2 megabits. It is an ambitious programme, but we have secured more than half a billion pounds to ensure that it happens.
As my hon. Friend has said, in her constituency some 14% of premises are unable to receive a good level of broadband, even after the private sector investment that is already taking place in the area. One in five people live in a rural community, and rural communities are home to more than 1 million businesses, so this is not just a “nice to have”—getting broadband out to rural areas is essential to our economic growth, as my hon. Friend has made clear. Reliable broadband also underpins the social fabric of our rural communities.
We published our plans for superfast broadband in detail at the end of last year. Through Broadband Delivery UK, the Government are working with local authorities and the devolved Administrations to ensure the delivery of broadband infrastructure to those areas that the market will not reach on its own. We have announced indicative funding allocations for every local authority area in England. As my hon. Friend has pointed out, £3.2 million has been set aside for Cheshire and Warrington. If that can be matched with local funding, we believe that that will make it possible to bring superfast broadband to 90% of properties, and standard broadband to all premises.
We are not dictating to each local authority how it should go about installing broadband in its area. It has been our view from the very beginning that local communities and, therefore, local authorities are best placed to determine their own priorities. Every local authority has therefore been asked to produce local broadband plans for each area that set out its approach, how it will deliver the economic benefits from broadband, and how it will ensure local match funding. Many local authorities throughout the country have made clear, detailed and imaginative proposals, and I am confident that this is the right approach.
As my hon. Friend has indicated, I was able to find out about the good progress being made on Cheshire’s plans when I met her and officials from Cheshire East council recently. In my view, the Cheshire local broadband plan is well on the way to being ready, and my officials in BDUK are working closely with council officials on it.
I realise that match funding, particularly money from the European regional development fund, to which my hon. Friend has referred, is key to Cheshire’s broadband future, as well as that of many other parts of the country. We have vigorously pursued the issue with colleagues in the Department for Business, Innovation and Skills and the Department for Communities and Local Government, to try to ensure that broadband can be funded from the north-west region’s programme, and likewise in other regions. We need to ensure that expenditure on broadband is consistent with the ERDF regulations. We recognise the critical nature of this funding to Cheshire and, indeed, others, and I want to make sure that we give as much scope as we can to allow funding for broadband projects.
I will briefly indicate the nature of the problem. Given that ERDF funds exist to promote economic growth and are, therefore, targeted at small and medium-sized enterprises, it has been a task to try to get some flexibility in the programmes. As my hon. Friend has made clear, a pipe going into a domestic home that houses a graphic designer will clearly promote economic growth, but, under current ERDF regulations, that would not be seen as funding to support economic growth, because it would not be going directly to business premises. We have, however, secured a revised definition of the final mile with DCLG, which should allow ERDF funds to be applied. The issue is with DCLG at the moment, and it is important that we work with it to communicate the revision to local offices of DCLG around the country. The issue was raised at the ministerial group on growth, and there was agreement that DCLG needs to address the issue. We continue to work with it on it.
We are also awaiting decisions from the cabinets of Cheshire councils to underwrite the ERDF funding, in lieu of a decision on ERDF to speed up so that we can speed up project approval of the local broadband plan. I would be happy to write in further detail to my hon. Friend on that progress, and to the Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), to impress on him the need for clarity from my hon. Friend’s point of view.
The procurement process has been mentioned. There are 40 local broadband projects across the country. We have worked with BDUK to put a framework contract in place to speed up the procurement process and to help local authorities minimise the costs and time taken for procurement. We also have to be mindful of physical limitations. Clearly, we cannot network the entire country at once and it will be important, as I think my hon. Friend has indicated, to ensure that we progress projects in a timely manner, to ensure that the operators who win contracts have the resources to implement them.
We are making a number of other key policy interventions. We will publish a second consultation on the deployment of new overhead lines, which should allow the deployment of broadband much more cheaply. Next month, we will issue guidance on microtrenching and street works. I also impress on my hon. Friends how important it is for them to work with local councils to ensure that the planning process is as simple and as low-cost as possible for operators when they are laying new fibre.
Finally, we have commissioned a review of the electronic communication code and how it applies to wayleaves and access to private land. I recently wrote to the Country Land and Business Association and the National Farmers Union to ask them to speed up the voluntary agreement at which they are meant to arrive to ensure that wayleaves can be dealt with. We have also made significant progress in reducing the cost of access to BT’s ducts and poles. At the Conservative party conference, the Chancellor announced an additional £150 million for mobile coverage.
I hear what my hon. Friend says about responsibility being parcelled among a number of Departments, and I agree with the implications of her remarks, namely that the responsibility should be mine. I hope that she will lobby the Prime Minister on that later tonight.