AUDIT AND ASSURANCE COMMITTEE

Transcription

1 AUDIT AND ASSURANCE COMMITTEE Meeting date: 10 th June 2014 From: Corporate Director - Environment and Community Services CONNECTING CUMBRIA CONTRACT MANAGEMENT 1.0 EXECUTIVE SUMMARY 1.1 This report is an update on the corporate risks associated with the Connecting Cumbria Project and the systems operating in order to mitigate their impact. 2.0 POLICY POSITION, BUDGETARY AND EQUALITY IMPLICATIONS, AND LINKS TO COUNCIL PLAN 2.1 The key objectives of Connecting Cumbria are to ensure digital inclusion amongst our communities, encouraging economic growth through increasing the competitiveness of Cumbria businesses and delivering public sector efficiencies through the reengineering of ICT networks and services. Connecting Cumbria therefore supports all objectives in the Council Plan Challenging poverty in all its forms; Ensuring that the most vulnerable people in our communities receive the support they need; and Improving the chances in life of the most disadvantaged in Cumbria Deliver a Superfast Broadband service across the whole of Cumbria, stimulating inward investment to make this happen through 3 channels Encourage private sector investment Use public sector funding to support the commercial business case where there is no commercial market

2 Work with communities in the hardest to reach areas where the public sector investment is not achievable 3.0 RECOMMENDATION 3.1 That the content of the report be noted. 4.0 BACKGROUND 4.1 Following a protracted procurement process, with programme delays incurred securing European Commission approval for State Aids and Major project approval, early works started in earnest in April This was followed in September 2013 with design work and first deployments taking place. The overall aim of the programme is to deliver at least a 2mb/s service to all properties in Cumbria with 93% of properties being able to order and access a service of 24mb/s or above. State aid and Major Project Approval were finally approved in June The Connecting Cumbria programme has two elements. a) Infrastructure which is delivered through a contract with BT. This is the infrastructure build and absorbs the vast majority of the funding with it targeted primarily at delivering infrastructure for European Regional Development Fund(ERDF) eligible businesses. The delivery to community groups is added value and paid for through funding from Broadband Delivery UK (BDUK), Performance Reward Grant (PRG) and BT funds. b) Business Support which is through a contract with a local company Commendium. This provides support to eligible businesses and is coordinated so that it runs in parallel to the roll out of Superfast broadband Cabinets. 4.3 The main contract was awarded to BT in November 2012 for delivery of the infrastructure and was made up of funding mostly through grant: PRG - 6.9m ERDF m BDUK m In addition BT are spending 15m 4.4 This represents an investment in Broadband infrastructure in Cumbria of 52m overall for a Council outlay of 6.9m of PRG. As a result of this project and Commercial deployments of broadband by BT, at the end of May % of properties in Cumbria will have access to Super fast Broadband. 4.5 The Commendium Contract was awarded in February 2013 and is jointly funded through ERDF and PRG. This contract, of 2.39m, aims to support 1973 businesses and will be complete by April 2015.

3 4.6 Spend to date on the Commendium contract has been 831,994 AND 739 Businesses have been assisted 5.0 RISKS 5.1 The previous entry for Connecting Cumbria on the corporate risk register was: There is a risk that Cumbria County Council cannot deliver the Super-Fast Broad Band project to match the expectation of the public and to the agreed schedule. This is caused by failure to secure sufficient funding or State Aid, to procure an appropriate contract, to effectively communicate with the public, failure to manage expectations and delays as a result of legal or political challenges. This will result in damage to Cumbria County Council s reputation and an inability to deliver the programme objectives. 5.2 Since the project is now underway, this is no longer a risk and the following risk has been assessed and placed on the corporate risk register: Failure to complete delivery of SFBB to provide 100% coverage and 93% Superfast due to supplier non delivery, issues around grant funding, change in national policy, political or legal challenges. 5.3 Depending on the reason and extent of the shortfall, this may result in ongoing economic disadvantage to the people and enterprises of Cumbria as other Counties would be able to provide better infrastructure. It may also result in damage to the reputation of Cumbria County Council. As a consequence this risk has been assigned a rating of To protect the council and encourage BT to continue to deliver, the Council legal position has been formally stated through an exchange of letters via an external legal firm - Addleshaw Goddard. 5.5 The Council position is that any failure to meet the funding requirements would be the responsibility of BT and that in the situation of any underperformance they are still liable to deliver the full project on the reduced funds. This conversation continues but has already had the effect of BT responding positively to ensure the project continues to deliver. 5.6 This is a complex project and it is possible that loss of ERDF funds could be made up in several ways: a) Funds returned under the contract by BT if take up of super fast broadband exceeds 20% b) Savings in BT project management costs that we are anticipating as a result of working together with BDUK and other authorities to benchmark and challenge BT on some costs within the project. c) Contingency of 1.4 M has been set aside to cover any possible loss of ERDF funds 5.7 There is also an acknowledgement that an upside risk exists that this project may deliver more than 93% superfast broadband. This could occur

4 through either faster roll out of the Cabinets or any increased uptake beyond 20% which would result in further money being available to the programme. 6.0 CONCLUSION 6.1 Through an investment of 6.9m of PRG a total of 52m investment has been secured to deliver the infrastructure to support both businesses and communities and ensure the project is already a success story. 6.2 Connecting Cumbria has already supported 739 businesses and 21 jobs have been created within those companies as a result of the project. 6.3 The delivery on the ground of the BT contract is progressing ahead of schedule with more than 50 % of properties in Cumbria now able to get access to Superfast Broadband and shows every sign of exceeding the 93% delivery promised by December The contract requires and has received robust management to keep the contract on track and to ensure that maximum value is achieved. 6.5 Risks continue to be identified and managed through the project team working with the suppliers to mitigate the impact of such risks. David Morton Senior Programme Manager Connecting Cumbria 06/05/14 APPENDICES No appendices IMPLICATIONS Staffing: * Financial: * Property: * Electoral Division(s): * PREVIOUS RELEVANT COUNCIL OR EXECUTIVE DECISIONS [including Local Committees] No previous relevant decisions.

5 CONSIDERATION BY OVERVIEW AND SCRUTINY Considered by Overview and Scrutiny BACKGROUND PAPERS No background papers. Contact: David Morton Senior Programme Manager Connecting Cumbria 06/05/14