Consultation outcome

Derbyshire - Lot 3 Public Review Closure Notice

Updated 10 August 2023

New procurement to extend coverage of gigabit-capable broadband across the Derbyshire region.

1. Introduction

The government’s ambition is to deliver nationwide gigabit-capable broadband as soon as possible. We recognise that there is a need for government intervention in the parts of the country that are not commercially viable; this is why the government has committed £5 billion for the hardest to reach parts of the country, ensuring that all areas of the UK can benefit. This will be spent through a package of coordinated and mutually supportive interventions, collectively known as Project Gigabit.

We wish to work collaboratively with industry to maximise efficiency, minimise market distortion and achieve our objectives within a tight time frame. To do this, we first identified the areas that were not commercially viable through the Open Market Review (OMR) and Public Review (PR) stages. This allowed us to understand from suppliers if there were any current or planned investment over the next three years in broadband infrastructure (Next Generation Access broadband, ultrafast and gigabit-capable) in the identified geography. For this Lot, the identified geography lay within the Derbyshire region.

The box below shows the order of processes, from OMR to procurement.

1. OMR

2. Public Review

3. Determine intervention areas for procurement

4. Procurement

Through these stages, BDUK classifies premises as eligible/ineligible for subsidy on the basis of their existing or planned qualifying broadband infrastructure. Details on the classification system of White, Grey, Black and Under Review and methodology can be found in section 3.2 BDUK Classifications and methodology for this PR.

Premises categorised as White by BDUK during OMRs and PRs (ie eligible for subsidy) are grouped into Intervention Areas (IAs). IAs list those premises that will be targeted for subsidy in any potential procurement to follow this PR. To be clear, not all eligible premises may have been targeted for subsidy. The finalised IAs will be issued to the market at the Invitation to Tender (ITT) stage of procurement so that suppliers can bid for subsidy to support delivery to these IAs.

Further information on the OMR/PR process and how we reach our conclusions can be found in the Subsidy Control Guidance document.

2. Outcome of the preceding Open Market Review

Preceding the current PR stage, BDUK conducted an OMR for Derbyshire (Lot 3) from 20 October to 22 November 2021. This OMR requested information from suppliers regarding current and planned broadband infrastructure within the next three years.

All meaningful responses to the OMR were considered and where necessary used to determine eligible premises. Suppliers who responded to the OMR were informed of the classifications applied to the existing and planned infrastructure relevant to their submission.

The key findings of the OMR are presented in the postcode-level map showing eligible premises identified through the OMR for Derbyshire, and a list of eligible postcodes can be found on our website.

3. Outcome of the Public Review

3.1 Background

The PR for Derbyshire (Lot 3) ran from 29 March to 29 April 2022. During the PR, BDUK invited stakeholders (including broadband infrastructure operators, internet service providers, the public, and businesses) to provide feedback regarding which areas were made up of eligible premises.

Furthermore, BDUK carried out market engagement to seek feedback from suppliers about the design of the IA and Lot design, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The PR stage aimed to validate the outcome of the preceding OMR to ensure that it correctly represented the information provided by suppliers over the course of the OMR.

Suppliers who missed contributing to the preceding OMR, had no definitive plans and/or evidence base on which to substantiate claims at that earlier stage, or had subsequently updated their plans had a final opportunity to notify BDUK before final determinations were made on premises eligibility. All meaningful responses were carefully considered and where necessary utilised to determine eligible premises. BDUK also sought feedback from Derbyshire County Council. The finalised postcode-level map showing eligible premises is shown in Annex A of this PR Closure Notice. See postcode-level map.

A finalised list of postcodes showing White, Grey, Black and Under Review PR outcome has been published. A list of eligible (White/Under Review) premises is also available to suppliers upon request.

The proposed IA shown in Annex B has been submitted to BDUK’s National Competence Centre and obtained approval to proceed. The finalised IA (s) will be available to bidders at the forthcoming ITT stage.

Changes to the Lot area

Please note, Lot areas are not fully aligned to Local Authority (LA) boundaries. Specific Lot boundaries (and IAs) may flex during the OMR, PR and Pre-Procurement Market Engagement (PPME) processes to enable an optimum procurement to be put to the market.

Since the PR closed on 29 April 2022 there have been no amendments to the proposed Lot Boundary area. The PR outcomes provided below, and shown in Annex A, are consistent with the proposed Lot Boundary area that is now going to procurement.

3.2 BDUK Classifications and methodology for this PR

During the PR, BDUK categorised premises as gigabit White, Grey, Black or Under Review.

Subsidy control classifications are set out below:

• White - indicates premises with no gigabit network infrastructure and none is likely to be developed within 3 years^{[footnote 1]}

• Grey - indicates premises where a single qualifying gigabit infrastructure from a single supplier is available or is to be deployed within the coming 3 years^{[footnote 1]}

• Black - indicates premises with two or more qualifying gigabit infrastructures from different suppliers being available, or will be deployed within the coming 3 years^{[footnote 1]}

• Under Review - indicates premises where suppliers have reported current or planned commercial broadband coverage, but where claimed current gigabit coverage has not been verified, or, in respect of planned build, where evaluators are confident that gigabit infrastructure will be delivered, but some risks to delivery remain, or there are some gaps in evidence

BDUK will only provide subsidy to target premises that have been designated as White. Premises which have been designated as Under Review may be included within the Deferred Scope of a procurement. Where this is the case, a further review will be undertaken to confirm whether they are Grey or White before they are released for build.

In accordance with the OMR/PR processes, supplier data submitted during the OMR and PR has been mapped using a methodology that protects commercially sensitive supplier data. To reflect this sensitivity, we will only release White and Under Review Unique Property Reference Numbers (UPRNs).

3.3 Summary of PR findings - premises eligibility

For presentational purposes only, postcode-level mapping has been used to present the map showing eligible premises (NB we will only subsidise build to premises which have been designated as White - postcodes are not used to determine IAs for subsidy).

For this purpose, postcodes have been classified as follows:

1. A postcode is White if any White premises are present.

2. A postcode is Under Review if any Under Review premises are present.

3. A postcode is Black if all premises in the postcode are classified Black.

4. A postcode is Grey if all premises are Grey or a mixture of Grey and Black.

A postcode-level map summarising these premises classifications is provided in Annex A. Suppliers - please note that this map does not show which UPRNs have been determined as White and Under Review.

The outcome of the PR is summarised in terms of White, Grey, Black and Under Review postcodes and premises below:

Postcode Classification	Number of Postcodes	Number of Gigabit Black Premises	Number of Gigabit Grey Premises	Number of Gigabit Under Review Premises	Number of Gigabit White Premises
White	7,832	2,551	37,092	45,970	70,898
Under Review	10,380	13,757	53,227	149,786	0
Grey	7,519	26,246	134,348	0	0
Black	2,196	46,021	0	0	0
Total	27,927	88,575	224,667	195,756	70,898

3.4 Forthcoming procurement

During the PR stage for Derbyshire (Lot 3), BDUK sought responses from the market and other stakeholders to validate the Annex A Subsidy Control map (showing Gigabit White, Grey, Black and Under Review determinations).

BDUK also carried out market engagement to seek feedback from suppliers about the design of the proposed IA and Lot, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The total public funding investment has been based on the final number of premises requiring subsidy. BDUK will confirm a budget drawn from public funding for this area within the forthcoming tender documentation. Details of any restrictions on the use of public subsidy will be explained within the tender documentation.

Indicative funding allocated to this Lot is as follows:

Type B - Total (18,219 UPRNs) approximately £33,444,160 split as follows:

• Initial Scope: 12,846 UPRNs approximately £27,136,915
• Deferred Scope: 5,373 UPRNs approximately £6,307,245

Peak District Type A (Lot 3.01) - details in Annex C.

The procurement types selected for Derbyshire (Lot 3), following engagement with market and other stakeholders, are anticipated to be a single Type A local supplier contract and a single Type B regional supplier contract. A premise-level map detailing the proposed Type B IA can be found in Annex B. Further information on the proposed Type A procurement can be found in Annex C.

The regional supplier contract includes two categories of intervention: Initial Scope, where the regional supplier should build as quickly as possible; and Deferred Scope where we wait and see whether commercial plans or voucher projects translate to delivery, but could then build if not.

For premises that are included in the Deferred Scope of contract, we will seek a price from the regional supplier, but will not authorise build unless and until they are re-classified as White. We will always either descope Under Review premises or defer build to them and we will always descope Grey or Black premises.

For the local supplier contract there is no Deferred Scoped of contract category, therefore premises are either in the Initial Scope or Out of Scope.

At this time, the Type B IA will be proceeding to procurement with further information on the proposed Type A procurement to be confirmed.

Derbyshire’s (Lot 3) forthcoming procurements will be carried out in accordance with the Public Contracts Regulations 2015 (PCR2015). BDUK procurement approaches are designed to address the scale of the individual procurements. Derbyshire’s (Lot 3) procurements will be conducted in a transparent and non-discriminatory manner.

The Authority, BDUK, reserves the right to amend or withdraw the procedure for the competitive sourcing process at any time. Any amendments will be done in line with the Procurement Regulations.

Suppliers acknowledge and accept that by issuing this document (PR Closure Notice) BDUK shall not be bound to progress or conclude any related procurement activity.

Under no circumstances shall the Authority incur any liability in respect of the information contained in this Closure Notice or supporting documentation.

Timescales

The following table summarises the indicative timescales for the Derbyshire (Lot 3) Type B procurement:

Activity	Date
Procurement start date (SQ Launch)	March 2023
Estimated contract award date	October to December 2023

Please see Annex C for details of the Type A procurement.

See Project Gigabit procurement timelines for more information.

3.5 Summary of PR findings

• There are 70,898 white premises (out of 579,896) where the market does not intend to build, indicating there is a strong commitment from active suppliers in the lot covering Derbyshire to reach a large proportion of premises in the county.

• The design of the IAs and the decision to proceed with both the local and regional procurement methods will address areas outside of where we expect the commercial sector to build to, prioritising footprints where there is an appetite for BDUK to go further, faster.

• We contacted all known national and local suppliers to ask them to respond to the OMR and PR. This included working closely with Derbyshire Council to ensure active and prospective suppliers were aware of the OMR and PR and could feed in their responses.

4. Conclusion

A key output for the OMR/PR for Derbyshire (Lot 3) is the map showing premises that are eligible for subsidy.

From this map, BDUK developed the IAs which were proposed to the market during the PPME phase. Annex B sets out the draft Type B IA map at UPRN level. A premise-level map will be added for the proposed Type A IA in due course.

This identifies the areas where premises are eligible for subsidy. A full list of White and Under Review UPRNs is available on request to suppliers via ukgigabit@BDUK.Zendesk.com.

5. Annex A – Map indicating locations of eligible premises

The postcode level map below indicates areas where those premises eligible for subsidy are located ie White areas. These eligible premises may be included within the IAs.

Black, Grey and Blue (Under Review) areas indicate where those premises ineligible for subsidy are located.

Derbyshire (Lot 3) Postcode level map (showing subsidy control classifications at a postcode level)

6. Annex B – Map of Proposed Intervention Area

The map below highlights the IA that was approved following completion of the PPME exercise.

Please see section 3 above for information on BDUK’s findings, contextualising how eligible premises were included in the proposed Type B IA.

The above premise level map indicates eligible premises from the proposed Type B procurement.

Those premises which are highlighted in orange (12,846 premises) are referred to as the ‘Initial Scope’ premises that will be targeted for subsidy.

Those premises which are highlighted in blue (5,373 premises) are referred to as the ‘Deferred Scope’ premises, which will not be targeted for subsidy unless they have been determined to be eligible (White) as part of BDUK’s monitoring process.

This map is accompanied by a list of UPRNs that fall within the IA, clearly demarcating which premises are within the ‘Initial’ or ‘Deferred Scope’ which suppliers can request via Atamis. If you are unable to access Atamis, please contact the Supplier Mailbox bduksuppliers@dcms.gov.uk.

7. Annex C - Post PR Closure Notice updates - August 2023

Everything prior to Annex C within this PR Closure Notice reflects the outcomes of the PR conducted in Derbyshire (Lot 3) from 29 March to 29 April 2022, which was published on 24 February 2023.

As confirmed in section 3.4, the procurement types for Derbyshire (Lot 3), following extensive engagement with the market and other stakeholders, were anticipated to be a type B regional supplier contract (Lot 3) as well as a single type A local supplier contract referred to as Peak District (Lot 3.01).

The single type B regional supplier procurement was successfully launched for Derbyshire (Lot 3) on 28 February 2023 via BDUK’s procurement portal Atamis.

The decision was made to pause the type A local supplier contract in January 2023 for the Peak District (Lot 3.01), following an increase in commercial activity in the proposed IA which was identified through the September 2022 National Rolling Open Market Review (NR OMR) findings.

Following the conclusion of the January 2023 NR OMR, we now have an in-depth understanding of the current commercial activity in the Peak District (Lot 3.01). As such, we have developed a new IA using the Derbyshire PR data which was conducted from March to April 2022 and have updated this with the latest January 2023 NR OMR data.

This is to ensure we are targeting the correct premises for subsidy in the procurement. Further details on the outcome of the January 2023 NR OMR can be found here.

Details of the proposed Peak District (Lot 3.01) IA, volumes of premises eligible, IA map, funding allocated and revised timescales for this procurement are detailed below.

The amount of government subsidy allocated has marginally increased, while the number of eligible premises has marginally reduced. BDUK believes this approach will achieve the best possible outcome for residents in the Peak District. The revised (Lot 3.01) IA is designed in such a way that it avoids disrupting existing commercial plans and targets subsidising build to areas where the market is not intending to deliver commercially.

The upcoming Peak District (Lot 3.01) procurement will be carried out in accordance with the Public Contracts Regulations 2015 (PCR2015). BDUK procurement approaches are designed to address the scale of the individual procurements. Peak District’s (Lot 3.01) procurement will be conducted in a transparent and nondiscriminatory manner.

The Authority, BDUK, reserves the right to amend or withdraw the procedure for the competitive sourcing process at any time. Any amendments will be done in line with the Procurement Regulations.

Suppliers acknowledge and accept that by issuing this document (revised PR Closure Notice) BDUK shall not be bound to progress or conclude any related procurement activity.

Under no circumstances shall the Authority incur any liability in respect of the information contained in this document or any supporting documentation.

The budget information and details of any restrictions on the use of public subsidy will be explained within the tender documentation. BDUK intends to procure gigabit-capable solutions - those capable of achieving a minimum of 1Gbps download speeds. This applies to  eligible Gigabit White premises identified and shown in this Annex. To be clear, BDUK has targeted selected Gigabit White premises for subsidy, as set out within the tender documentation.

The tender documentation is accessible to suppliers via Atamis. If you are unable to access Atamis, please contact the Supplier Mailbox bduksuppliers@dcms.gov.uk.

Indicative funding allocated to this Peak District (Lot 3.01) type A local supplier contract is shown below:

Peak District (Lot 3.01) type A local supplier contract:

Funding allocated	£10.7 million
Total number of uncommercial premises in IA	4,605

The following table summarises the indicative timescales for the Peak District (Lot 3.01) type A procurement:

Activity	Date
Procurement start date (ITT launch)	9 August 2023
Estimated contract award date	January 2024

See Project Gigabit procurement timelines for more information.

Map of Proposed Intervention Area - Peak District (Lot 3.01)

The below map shows the eligible premises that form the proposed IA for the Peak District (Lot 3.01) type A local supplier contract.

All of the premises that are targeted for subsidy (a total of 4,605 premises) are highlighted in orange and are referred to as the Initial Scope.

This map is accompanied by a list of UPRNs that fall within the IA, clearly demarcating which premises are within the Initial Scope which suppliers can request via Atamis. If you are unable to access Atamis, please contact the Supplier Mailbox bduksuppliers@dcms.gov.uk.

1. There may be occasions where credible plans extend beyond a 3-year period, in that case, these may be taken into account. ↩ ↩² ↩³