Seòmar agus comataidhean

Thank you very much, convener. I will take the opportunity to make some comments about a very important area for Scotland.

Every part of the economy and every part of Government is currently being transformed by digital connectivity and by the data, technologies and applications that it enables. Although, prior to the pandemic, all of us recognised the critical need for reliable digital infrastructure, the pandemic has emphasised that need further still, and it has certainly forced the pace of digital transformation. We are investing substantial Scottish Government resources in a reserved area so that we can deliver improvements in digital infrastructure through unprecedented times. I am certainly proud of what we have achieved, but I am also conscious of the need to make sure that we complete the job and do it well.

We delivered the commitment to ensure that every home and business could access superfast broadband connections by the end of last year through a combination of the R100 contracts, the nationwide voucher scheme and commercial coverage. All remaining connections that are being delivered through the R100 contracts will be full-fibre connections, which will deliver gigabit-capable connectivity on the ground. The R100 programme currently has ships out in the North Sea laying 16 new fibre optic subsea cables to connect 15 Scottish islands. That is quite clearly a transformational investment.

I had seen the United Kingdom Government’s gigabit project—through which £5 billion is available for investment across the UK—as the next opportunity to deliver more targeted investment, and I thought that it could work quite well alongside the R100 programme. However, as things stand, the sort of investment that the Scottish Government is currently making in subsea cables and so on will not be possible via project gigabit, which will, instead, focus on the cheapest non-commercial premises.

Project gigabit has an arbitrary cost cap of £7,000. In other words, if it costs more than £7,000 to connect to a premises anywhere in the UK, the UK Government will not fund that. I hope that the committee will join me in appealing to the UK Government to express the point that connecting the hardest-to-reach areas in Scotland will inevitably cost more than £7,000 per property.

My correspondence with the UK Government Minister of State for Media, Data and Digital Infrastructure has not been fruitful to date. She has said that the Scottish Government is seeking “to have greater spend” in areas such as islands and parts of rural Scotland than that which is going to “parts of England” and that she

“cannot ask people in other parts of the country to suffer”.—[Official Report, House of Commons, 26 May 2022; Vol 715, c 399.]

It is quite clear that all of us have an interest in connecting the hardest-to-reach areas and, even if it costs more than £7,000 per property, we need to complete the job. However, having already invested in a reserved area well over £600 million from the Scottish Government’s budget, we cannot simply keep picking up the tab for the UK Government on broadband. Therefore, it looks like project gigabit is going from a transformational opportunity to a missed opportunity for Scotland. I hope that we can get into a bit more detail on that when it comes to the question-and-answer part of this session.

The Scottish 4G infill programme is working with our project partner, WHP Telecoms, which has activated 28 mobile masts, and we are doing work on 5G through the Scotland 5G Centre. I could talk more about that, but I am conscious of keeping my remarks brief, so I will stop there. I hope that we can get into some of that work in the questions.

I will have to come back to you on that, because the full broadband funding that I have made available is still available. The figure of more than £600 million that I identified to reach 100 per cent of properties is still more than £600 million. There may be ways to redeploy funding, but it will still be spent on broadband.

I know that Alexander Burnett has had a significant interest in the voucher scheme on behalf of his constituents. We extended access to the interim voucher by three months and significantly stepped up our advertising efforts. We used local, national and social media, but in those further three months there was no tangible increase in the number of inquiries or applications.

I will see whether officials want to come in in a moment. The scheme is demand led, so it is ultimately a decision for property owners whether to go down that route. Obviously, some areas were able to combine the broadband voucher scheme with funding from the UK Government’s voucher scheme: the £5,000 from the Scottish Government combined with UK Government funding of up to £1,500 for homes or £3,500 for businesses.

In relation to effectiveness, the reason why we did not extend the scheme further is that we did not see a significant uptake in the additional three months. The other point to make is that we tried to use positive examples; we put a lot of positive examples on the website of how households have been able to use the voucher scheme, and we have been working with around 60 local broadband suppliers to allow them to expand their networks.

However, with hindsight, I feel that we did everything that we could to maximise awareness and raise understanding of how the voucher scheme could work. I will see whether officials want to come in on why there was not a bigger uptake, but I certainly could not see value in extending the scheme any further, because of the low uptake. Incidentally, if you want the latest figures, as of June 2022, the R100 voucher scheme has delivered 2,202 connections, and a further 1,008 are in the pipeline. Fourteen per cent of those connections have been fibre to the premises. I will stop there and see whether you want to ask a follow-up question; alternatively, I will ask officials whether they have any ideas as to why there was not a bigger uptake.

That is a good question. As you know, there is always reluctance to talk about the opportunities of broadband when not everybody has access to it yet. However, you are right in saying that if, for example, 95 per cent of properties have access to broadband through the previous programme, they are not all necessarily making maximum use of it. That work was stepped up during the pandemic.

The digital boost fund has been running for a number of years and is one of the most effective ways to address the matter. Our commitment to spend £100 million through digital grants still stands. In the first 100 days of this parliamentary session, we provided £25 million to spend on digital connectivity. That includes not only software but the skills side, and the digital boost fund has been effective on that.

You are right that, in recent times, the fund has been oversubscribed. Incidentally, prior to that, it had quite a low subscription rate. Trying to promote our digital products, whether the digital loans scheme, digital boost or something else, was quite challenging, but businesses are increasingly understanding how digital can be transformational.

Assistance is provided primarily through grant support, which still stands. It has not been changed. At the same time, it also brings in the opportunity for training and skills.

There is a lot more to that answer. For example, there is a lot more on training and reskilling because, ultimately, businesses also need digitally equipped, trained and skilled employees. We support various programmes in that regard. One of the first things that I did was set up the digital start-up scheme, which took people who were furthest from the job market, provided them with intensive retraining or reskilling in digital skills and supported them to find work. There are other ways in which we can approach the matter.

We will do our level best to do that. The information might be in the form of percentages, rather than absolute figures, but we will do our level best to give you as much information as possible.

We have a pipeline of all the further build activity and site activations from now until the programme concludes in March 2023. I am happy to provide the committee with more information on what the plans look like between now and March 2023. I am not familiar with your figure of 45. We are working to try to connect up to 55 masts by March 2023.

I am extremely supportive of that, because I represent an area where there has perhaps been a disproportionately large reliance on local community solutions, such as Locheilnet in Lochaber and Cromarty Firth Wireless Networks in the Black Isle—there are lots of local examples. Certainly, the broadband voucher scheme that I mentioned earlier provided an opportunity to work with about 60 local broadband providers to give them the opportunity to connect.

Communities have been absolutely dependent on those local providers. Therefore, the worst thing that we could do right now is to focus only on, for example, one major provider as that might make it harder for some of the community schemes to become commercially viable. That is a challenge that we need to manage quite carefully. As I said, about 60 local broadband providers, including CloudNet IT Solutions in the Orkney Islands and Shetland Broadband, have used the voucher schemes to connect eligible properties.

There are a number of examples of areas where that approach has worked. However, most households simply want a reliable connection.

It is not always investment that is required to get the private sector to operate in this area. You are talking about 5G providers rolling out 5G networks. Obviously, we want to incentivise them to do that. We are doing that in a number of different ways, not least through the 5G centres. However, ultimately, that will be a commercial decision by the providers.

We can provide an incentive by doing things such as developing use cases on private 5G test networks, and we can support small and medium-sized enterprises with the skills that they need. If a commercial provider sees an appetite for adoption and commercialisation, the roll-out of 5G will be more commercially attractive to them. There are other ways in which we can incentivise commercial providers to roll-out 5G.

Ofcom is vital in that system because it determines the criteria for the services that are delivered. However, it certainly has no role in setting the parameters for project gigabit, because its job is to regulate and establish standards when it comes to UK Government investment and so on. I assume that your question was more about the generality of its role rather than one about its specific—

We are delivering at pace. As of 30 April this year, 7,685 premises were able to access superfast broadband through the R100 contracts, and a further 2,200 connections have been made through the broadband voucher scheme. I am keeping the pressure up considerably on Openreach, in order to try to roll that out at pace.

With regard to the current conversations, I am always looking for us to go further by identifying any other properties or areas that we might be able to reach, perhaps through a combination of project gigabit and R100.

In short, we are working to that deadline, and we are working to that budget. Obviously, when it comes to the budget, I want to ensure that the Scottish Government contributes, which we are, with more than £600 million. However, ultimately, in a reserved area, it is also my duty and responsibility to ensure that we maximise any UK Government spend. If additional funding becomes available—such as through project gigabit, which is a £5 billion project—that can complement our work and we can, therefore, exceed the budget that has been set but through the UK Government Treasury, I would certainly not say no to that.

The nuance that I am incorporating here is that we have set a budget and I am confident right now in our budget but, if I can go further with additional funding from the UK Government, I absolutely will. I hope that that nuance makes sense. Ultimately, we want to maximise the available funding. We have set out our contribution but, if we can secure a greater contribution through project gigabit, we would absolutely do that.