Sheffield & South Yorkshire

South Yorkshire's Digital Region broadband scheme to close

A publicly-funded scheme to provide high-speed broadband across South Yorkshire is being shut down after failing to attract enough customers.

The Digital Region project was launched in 2010 to give access to homes, schools and businesses.

But last month, the government said it had been "deeply flawed" and revealed only 2.7% of Digital Region's required 108,000 customers had signed up.

The estimated total cost of the project once it has ended is £83.3m.

'No longer viable'

Digital Region was funded by the European Regional Development Fund, the now-defunct regional development agency Yorkshire Forward and the four South Yorkshire local authorities.

Sheffield City Council has £14m invested in the project, while Barnsley, Doncaster and Rotherham councils have each committed £7m.

Barnsley's Labour council leader Steve Houghton, said he would be asking for a review of the project and in particular its financial management.

He said: "Whether money's been wasted given we have achieved the objective (to provide 80% coverage), is clearly open to debate."

The cost to the government and the councils of shutting down the scheme would depend on the terms of any sale of the infrastructure and whether the European Union would try to "claw back" any of its initial £30m investment, Mr Houghton said.

The government, which inherited Yorkshire Forward's 50% shareholding in March 2012, has said it may need to spend up to £45m to exit the venture.

A spokesman for the Department for Business, Innovation and Skills said: "A combination of market changes and the commercial model meant that it was no longer financially viable to support the project purely with public sector funding.

"Attempts were made to find a private partner, but everyone involved has decided that a managed closure of the network now represents the best deal for taxpayers."

Customers will be migrated to alternative networks during the closedown, which is expected to take up to 12 months.

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