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Programme Delivery Model

Broadband Delivery Programme

    • Producing appropriate data and mapping for individual areas (though baseline data and some practical assistance will be available);

    • Project development and delivery team costs (including technical or legal resource or back-fill of internal resource);

    • The creation of governance structures;

    • The procurement process for engaging a private sector partner/investor;

    • Local demand stimulation activities;

    • Business support activities;

    • Skills development activities;

    • Monitoring and evaluation of a project; or

    • Ongoing operational costs of delivery.

      • 14.6

        European Union (EU) funding

      • 14.6.1

        The European Regional Development Fund (ERDF) is aimed at economic regeneration projects promoted primarily by the public sector. ERDF helps projects which offer substantial benefits that meet the needs of the region and its local areas that wouldn't take place without a grant. The rest of the funding, known as 'match funding', comes from other sources such as: local authorities, government schemes, other public bodies and the private sector.

      • 14.6.2

        ERDF funding is potentially available for local broadband projects from the EU to match other funding for improving broadband infrastructure in order to connect businesses to networks for improving their competitiveness. Where available, local bodies can seek to access funding from the existing 2007 to 2013 programming period. Further funding is expected to be available in the next programme period from 2014 to 2020.

      • 14.6.3

        BDUK will work with relevant Government Departments to improve access to and clarity, for local bodies, about the use of ERDF funding for local broadband projects. This will include co-ordinating guidance on specific issues and making available exemplars of applications from local bodies.

      • 14.6.4

        The Rural Development Programme for England (RDPE) is jointly funded by the EU, through the European Agricultural Fund for Rural Development, and the Government. In England, Defra are currently setting up the Rural Community Broadband Fund which will include RDPE and BDUK funding. Further details are set out in section 10.4.5 above.

      • 14.7

        Private sector funding

      • 14.7.1

        In an investment gap funding commercial model, suppliers are expected to bid for public sector subsidy on the basis that they will contribute part of the capital of the project the proportion that they are willing to invest to achieve their target return on this. This calculation is typically based on discounting projected future revenues less operational and project costs for a particular area over the project lifetime.

      • 14.7.2

        The private sector capital contribution will be based on the ongoing revenues that will result from an investment. Typically, revenue estimates will be based on the potential number of premises, the expected-take-up and the suppliers product pricing. The calculation will also be dependent of a supplier‟s intended rate of return, and the length of their investment horizons. Suppliers taking a longer term view of the investment and perceiving a lower investment risk (and hence rate of return) will be able to invest a proportionately higher amount and bid for a proportionately lower level of subsidy. A supplier will also need to 58

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