Councils demand inquiry into collapse of £100m South Yorkshire broadband scheme

South Yorkshire council leaders have ordered an inquiry into the collapse of publicly-funded superfast broadband project Digital Region. 

Barnsley, Doncaster, Rotherham and Sheffield councils pumped £35 million into the project over five years before pulling the plug last week.

The councils may still need to repay a £27m European development grant, and the councils now want to find how it became a £100m public funding black hole.

Read Recombu Digital’s guide to Digital RegionBarnsley Council leader Sir Steve Houghton told the Yorkshire Post: “When we’ve looked at Digital Region, the financial performance has not been what it should be and on behalf of all the councils I am asking for an independent review of what happened and why, and to find out what lessons can be learned.”

Digital Region was set up to bring superfast FTTC (Fibre to the Cabinet) broadband to 1.3m homes became a black hole costing more than £100m in local, national and European funding.

Around 3,000 subscribers will be given time to find a new broadband provider before the service is turned off, leaving a legacy of street cabinets and more than 800km of fibre-optic cable.

The fibre network is likely to be sold as a valuable asset for other broadband providers, which could offset some of Digital Region’s losses.

The project was managed by the regional development agency, Yorkshire Forward, which the government closed in 2012. 

With the original management team having moved on, the council may find it difficult to summon them unless its inquiry is given some legal powers.

Topics are likely to include how Digital Region failed to win major ISPs such as Sky and TalkTalk to use its network, and its relationship with BT.

BT Openreach recently began to install its own FTTC cabinets in areas served by Digital Region, offering services from the major ISPs.

The government effectively signalled the end of Digital Region in July, when the government pulled out at a cost of £45m to prevent further losses.

The four councils had hoped to find a private buyer for the service, but that would have cost them £95.8m just to keep it running, as well as an estimated £15m to sell it.