By . Daniel Martin . PUBLISHED: . 19:14 EST, 26 September 2013 . | . UPDATED: . 19:16 EST, 26 September 2013 . BT has been accused of ripping off the taxpayer in a £1.2billion government-backed scheme to install broadband in rural areas. After ministers pledged in 2011 that 90 per cent of the UK would have superfast internet by 2015, contracts worth £230million were offered to telecoms firms to take on the mammoth task of connecting areas with few people living in them. But MPs said yesterday that consumers were ‘getting a raw deal despite the generous public subsidy’ and that it had not been in the interests of taxpayers to award all 26 contracts to BT. Claims: BT has 'exploited' its deal to install broadband to rural areas of the UK, a new report has suggested . A report by the Public Accounts Committee found that the lack of competition has driven up prices, while the programme is now two years behind schedule and costing local councils £230million more than the £730million anticipated. A further 18 contracts worth £250million, which are to be awarded in 2015, are also expected to go to BT. The MPs also accused the telecoms firm of exploiting its position by failing to pass on information about which areas of the country will not be covered by the programme, meaning other firms could not come in to offer services. Hit out: Margaret Hodge, Public Accounts Committee chair, said the consumer was failing to get the benefits of healthy competition . And it was criticised for including a clause in its contracts with local authorities that prevent them from disclosing the costs involved to others that are still negotiating their broadband connections. This lack of transparency, the report concluded, meant BT ‘exploited its quasi-monopoly position’ to limit access to both the wholesale and retail market ‘to the detriment of the consumer’. Margaret Hodge, the committee’s chairman, said: ‘The consumer is failing to get the benefits of healthy competition and BT will end up owning assets created from £1.2billion of public money. BT is supposed to provide at least 90 per cent coverage in rural areas, but it is preventing local authorities from publishing information on the areas the company will and will not cover. ‘Details of speed and coverage in each local project are also being kept confidential, preventing other suppliers from developing schemes aimed at reaching the remaining 10 per cent of premises and stopping communities and others from identifying alternative ways of providing superfast broadband.’ BT’s outgoings are also £200million less than anticipated when the scheme was set up. Mrs Hodge concluded: ‘The lack of transparency over BT’s costs is a serious risk to value for money.’ But . Communications Minister Ed Vaizey denied that BT was ripping off the . country and said it was offering ‘great value for money’. He . said: ‘It is true we are investing £1.2billion in superfast broadband; . it’s not true the costs are out of control. BT’s costs stack up. They . put the money up front. We will see all the invoices BT present. ‘I . don’t anticipate BT trying to pull a fast one. BT is delivering under . our scheme to up to 10,000 homes now; it will deliver to millions of . people over the next two years with the best value-for-money, . government-sponsored broadband scheme you will pretty much find anywhere . in the world.’ Dispute: A BT spokesman said they were 'disturbed' by the report, which they believe was 'wrong' A BT spokesman said: ‘We are disturbed by the report, which we believe is simply wrong and fails to take on board a point-by-point correction we sent to the committee several weeks ago. ‘We have been transparent from the start and willing to invest when others have not. It is mystifying that we are being criticised for accepting onerous terms in exchange for  public subsidy – terms which drove others away. The taxpayer is undoubtedly getting value for money.’ Dominique Lazanski, digital policy analyst at the Taxpayers’ Alliance, said: ‘There needs to be far more transparency about BT’s costs, take-up rates and roll-out plans to ensure that taxpayers are not being fleeced and so that other suppliers can get on with filling the black spots not covered by BT. ‘Taxpayers should be deeply concerned that the broadband programme in its current form has seen hundreds of millions of pounds of their money wasted as a result of a centralised, one-size-fits-all scheme for fixed-line only internet connections.’
Ministers pledged in 2011 that 90 per cent of the UK would have broadband .
All 26 contracts for the scheme were awarded to BT .
MPs today said consumers were ‘getting a raw deal despite the generous public subsidy’ and BT had 'exploited its quasi-monopoly position'
Programme two years behind and cost £230million more than anticipated .
By . Daniel Martin . PUBLISHED: . 19:14 EST, 26 September 2013 . | . UPDATED: . 19:16 EST, 26 September 2013 . BT has been accused of ripping off the taxpayer in a £1.2billion government-backed scheme to install broadband in rural areas. After ministers pledged in 2011 that 90 per cent of the UK would have superfast internet by 2015, contracts worth £230million were offered to telecoms firms to take on the mammoth task of connecting areas with few people living in them. But MPs said yesterday that consumers were ‘getting a raw deal despite the generous public subsidy’ and that it had not been in the interests of taxpayers to award all 26 contracts to BT. Claims: BT has 'exploited' its deal to install broadband to rural areas of the UK, a new report has suggested . A report by the Public Accounts Committee found that the lack of competition has driven up prices, while the programme is now two years behind schedule and costing local councils £230million more than the £730million anticipated. A further 18 contracts worth £250million, which are to be awarded in 2015, are also expected to go to BT. The MPs also accused the telecoms firm of exploiting its position by failing to pass on information about which areas of the country will not be covered by the programme, meaning other firms could not come in to offer services. Hit out: Margaret Hodge, Public Accounts Committee chair, said the consumer was failing to get the benefits of healthy competition . And it was criticised for including a clause in its contracts with local authorities that prevent them from disclosing the costs involved to others that are still negotiating their broadband connections. This lack of transparency, the report concluded, meant BT ‘exploited its quasi-monopoly position’ to limit access to both the wholesale and retail market ‘to the detriment of the consumer’. Margaret Hodge, the committee’s chairman, said: ‘The consumer is failing to get the benefits of healthy competition and BT will end up owning assets created from £1.2billion of public money. BT is supposed to provide at least 90 per cent coverage in rural areas, but it is preventing local authorities from publishing information on the areas the company will and will not cover. ‘Details of speed and coverage in each local project are also being kept confidential, preventing other suppliers from developing schemes aimed at reaching the remaining 10 per cent of premises and stopping communities and others from identifying alternative ways of providing superfast broadband.’ BT’s outgoings are also £200million less than anticipated when the scheme was set up. Mrs Hodge concluded: ‘The lack of transparency over BT’s costs is a serious risk to value for money.’ But . Communications Minister Ed Vaizey denied that BT was ripping off the . country and said it was offering ‘great value for money’. He . said: ‘It is true we are investing £1.2billion in superfast broadband; . it’s not true the costs are out of control. BT’s costs stack up. They . put the money up front. We will see all the invoices BT present. ‘I . don’t anticipate BT trying to pull a fast one. BT is delivering under . our scheme to up to 10,000 homes now; it will deliver to millions of . people over the next two years with the best value-for-money, . government-sponsored broadband scheme you will pretty much find anywhere . in the world.’ Dispute: A BT spokesman said they were 'disturbed' by the report, which they believe was 'wrong' A BT spokesman said: ‘We are disturbed by the report, which we believe is simply wrong and fails to take on board a point-by-point correction we sent to the committee several weeks ago. ‘We have been transparent from the start and willing to invest when others have not. It is mystifying that we are being criticised for accepting onerous terms in exchange for  public subsidy – terms which drove others away. The taxpayer is undoubtedly getting value for money.’ Dominique Lazanski, digital policy analyst at the Taxpayers’ Alliance, said: ‘There needs to be far more transparency about BT’s costs, take-up rates and roll-out plans to ensure that taxpayers are not being fleeced and so that other suppliers can get on with filling the black spots not covered by BT. ‘Taxpayers should be deeply concerned that the broadband programme in its current form has seen hundreds of millions of pounds of their money wasted as a result of a centralised, one-size-fits-all scheme for fixed-line only internet connections.’
rural areas. After ministers pledged in 2011 that 90 per cent of the UK would have superfast consumers were ‘getting a raw deal despite the generous public subsidy’ and that it had not been programme is now two years behind schedule and costing local councils £230million more than the BT ‘exploited its quasi-monopoly position’ to