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The Benefits of Broadband

For every £1 the government is investing in broadband, the UK economy will benefit by £20, an expert report published today reveals.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Man in field with cow

For every £1 the government is investing in broadband, the UK economy will benefit by £20, an expert report published today reveals.

The report also reveals that in addition to offering outstanding value for taxpayer money the roll-out of superfast broadband nationwide will also make a real impact on the way we live - from working at home to watching TV content online.

UK Broadband Impact Study – Impact Report, by analysts SQW (with Cambridge Econometrics) says the government’s investment in superfast broadband will deliver a major boost to the UK economy.

The study is the most in-depth and rigorous examination of the impact of broadband in the UK, and looks at the economic, environmental and social benefits of superfast broadband.

Key findings on the impact of the government’s broadband investment include:

  • excellent value for taxpayer money with a net return of £20 for every £1 spent by 2024

  • significant short-term boost to the UK economy as the network construction adds around £1.5 billion to the economy; adding £0.5 billion and about 11,000 jobs in 2014 alone

  • long-term growth to the UK economy with public investment increasing annual GVA by £6.3 billion and causing a net increase of 20,000 jobs in the UK by 2024

  • household savings of £45 million a year by 2024 made through people being able to work from home more

  • benefits to be shared across the UK, helping the rebalancing of our economy. Approximately 89% of the benefits will be in areas outside London and the South East of England with rural areas set to benefit most

  • around 0.4 million tonnes a year of CO2e savings through reduced commuting, business travel and firms shifting to more energy-efficient cloud computing

Secretary of State for Culture, Media and Sport Maria Miller said:

What this report shows us is that as well as superfast broadband being good for economic growth it will make even more of a positive impact on the way we live, helping us work more productively and get online faster.

Our broadband rollout is one of the best in Europe with almost three quarters of the UK able to access superfast speeds. This is making a real difference to people in communities across the UK from small businesses able to expand, school children being able to log on to do their homework or people being able to work from home. This investment in technology is vital for our future and will help Britain continue to compete in the global race and improve the way we live and work.

Dr Pantelis Koutroumpis, Research Fellow at Imperial College and Advisor of the Broadband Impact Report said:

Looking at the evolution of broadband speeds in different geographies, and the on-going network deployments across the UK, this study brings new insights into the impact of improved broadband access on the national and local economies. Notably, the added capacity particularly affects small and medium businesses across industries, while the intervention helps address a growing digital divide. This motivates further research in the future as more empirical data become available - for example, in the relationship between business speed increases and productivity growth.

Further information

Published 14 November 2013