Research and analysis

Cost Benefit Analysis

Published 1 October 2026

1. Summary of findings

This section addresses the research question: “Did public investment in voucher products deliver value for money?”.  It does this by comparing the value of benefits that can be observed and monetised to date, including economic, social and environmental impacts. with the costs of delivering the programme.  The analysis is conducted in line with HM Treasury Green Book Principles. 

The cost–benefit analysis shows that Building Digital UK’s (BDUK) voucher schemes have delivered good value for money. Across both schemes, the total value of monetised benefits realised to date is estimated at £395 million to £546 million, compared with total programme costs of around £139 million. This gives an overall benefit–cost ratio (BCR) of 2.8 to 3.9, meaning that every £1 invested has generated between £2.80 and £3.90 of benefits.

Looking at the schemes separately, the estimated BCR for Gigabit Broadband Voucher Scheme (GBVS) vouchers is 2.6 to 3.2, while the BCR for Rural Gigabit Connectivity(RGC) vouchers is higher, at 3.5 to 5.9. Both schemes therefore represent good value for money. However, the drivers of value differ. For GBVS, the BCR is driven mainly by earnings benefits for workers, which are estimated using robust quasi-experimental methods and can be treated as net additional economic benefits. For RGC, the higher BCR is driven largely by household wellbeing benefits, which are modelled using survey evidence and a range of assumptions and are therefore less robust and subject to greater uncertainty. As a result, greater confidence can be placed in the GBVS BCR than in the higher headline BCR for RGC.

2. Purpose of report

This section provides a final cost–benefit analysis (CBA) of the GBVS and RGC voucher schemes, building on and extending the CBA presented in the previous evaluation report. The analysis brings together the full range of quantifiable benefits identified in earlier reports, including economic impacts on businesses resulting in additional earnings for workers, environmental benefits from reduced travel and increased homeworking, and wellbeing improvements for households. A key enhancement in this final evaluation is the availability of three additional years of data from the Business Structure Database, which allows economic impacts to be assessed over a longer period than was previously possible.

We also provide separate estimates for the GBVS and RGC schemes, which was not possible in the earlier report due to time lags in the economic data which meant it was not possible to evaluate the impacts of RGC vouchers on business performance.

It is important to note that the CBA reflects benefits observed in the early years following connection, based on the period for which evaluation data are available. As a result, the findings are not directly comparable with the benefit–cost ratios presented in Programme Business Cases, which typically model benefits over much longer periods, often 20 years or more. The evaluation evidence shows some evidence that benefits persist over time, and it is therefore likely that additional benefits will continue to accrue beyond the period covered here, including from further take-up in future years.

3. Methodology and limitations

The CBA has been undertaken in line with HM Treasury Green Book principles. The approach compares the costs of delivering the voucher schemes with the monetised value of the main benefits that can reasonably be attributed to them. Costs are based on BDUK’s voucher data for the GBVS and RGC schemes (which includes BDUK funding and local authority top up funding) and estimated management costs from business cases, ensuring that the full level of public investment is captured.

On the benefits side, the analysis draws together three quantifiable impacts identified in earlier chapters:

• Earnings impacts for workers – monetised through the wage premium identified in the Annual Survey of Hours and Earnings(ASHE) analysis, applied to the net additional jobs created in voucher-supported firms.

• Wellbeing impacts for households – expressed in Wellbeing-Adjusted Life Years(WELLBYs) and monetised using HM Treasury guidance, based on robust evidence of how improved broadband connectivity affects life satisfaction.

• Environmental impacts – estimated carbon savings from reduced commuting and business travel, increased homeworking, and changes in household and office energy use.

Other impacts of vouchers are not monetised in the CBA. Growth in employment and turnover at the firm level can be expressed in monetary terms, but under Green Book principles these cannot be treated as additional economic benefits at the national level. This is because where individual businesses expand their employment or turnover, this is assumed to come at the expense of other firms in the UK, leading to offsetting impacts in other locations. Only impacts that raise productivity are considered to represent genuine economic benefits at the whole-economy level.

While the productivity analysis did show that voucher-supported firms declined less than control firms with a statistically significant result, this reflects a mitigated decline rather than an absolute productivity improvement. Under the principles of additionality and economic welfare in the Green Book, only genuine productivity increases can unambiguously be treated as net economic benefits. Monetising a “less negative” outcome risks misinterpreting a relative effect as a welfare gain. Therefore, we present the productivity findings as contextual evidence but exclude them from the monetised CBA, favouring the clearer and less ambiguous wage premium-based benefits.

There are other important limitations to the analysis. Some of the benefits, in particular wellbeing and environmental impacts, are modelled using benchmarks and findings from other studies, rather than being directly observed. This inevitably introduces uncertainty. In addition, the study applies a three-year persistence period for benefits, reflecting the evidence available on how long voucher-supported areas continue to experience higher broadband speeds. The actual benefits may persist for considerably longer, but there is currently insufficient evidence to support modelling beyond three years.

Taken together, the approach is deliberately cautious: it includes only those benefits that can be robustly monetised and clearly attributed to the schemes. The cost–benefit ratios presented should therefore be regarded as conservative estimates of the overall value for money delivered by the voucher schemes.

4. Costs of delivering the vouchers programmes

The present value of the net cost to the public sector associated with the delivery of the voucher schemes up to the end of 2021 was £139.3m in 2024 prices. This is made up of the following:

• £125.7m through the cost of connecting vouchers between 2018 and 2021.  Of this £91.0m was incurred on GBVS and £34.7m was incurred on RGC. This includes the cost of top-ups provided by local authorities.

• £9.8 m in management and staff costs for the GBVS voucher scheme, taken from the LFFN voucher scheme business case and adjusted for inflation.

• £3.8m in forecast management and staff costs for the RGC voucher scheme. This is taken from the RGC business case. We have assumed only 30% of the total staff and management costs, worth £12.8m, apply to the vouchers scheme. This is on the basis that vouchers only account for 30% of the capital expenditure in the business case, with the rest relating to Hubs.

Type of cost	GBVS	RGC	Total
Cost of vouchers	91.0	34.7	125.7
Management costs	9.8	3.8	13.6
Total	100.8	38.5	139.3

Source: BDUK

5. Monetised benefits of the voucher programmes

5.1 Earnings benefits

As set out earlier, the ASHE analysis shows that workers moving into voucher-supported businesses experienced an average wage premium of 6.8 percentage points above the norm for job switchers. Applying this premium to the estimated number of additional jobs created by voucher firms and assuming 70% of these jobs were filled by job-to-job movers, gives a present value of around £174.5 million in 2024 prices over the period 2018–23.

As shown in Report 3, almost all of these earnings benefits are generated by businesses that received a voucher through GBVS (£173.5 million), with RGC businesses accounting for around £1 million. This reflects the much smaller number of RGC business beneficiaries, their smaller average size, and the lower estimated employment uplift associated with vouchers compared with GBVS businesses. Importantly, the smaller effect for RGC businesses appears to be driven by the timing of when vouchers were received, rather than their rural location. Evidence in Report 3 shows that voucher effects on employment and turnover were, on average, stronger for rural businesses than for urban businesses.

5.2 Wellbeing impacts

Wellbeing impacts are estimated using a different approach to the economic impacts presented above. While the economic analysis uses quasi-experimental methods to estimate additionality directly, the wellbeing impacts are modelled using evidence from surveys and published studies. Although this evidence draws on research that applied quasi-experimental techniques, the resulting wellbeing estimates rely more heavily on assumptions. As a result, there is less confidence in the robustness of the wellbeing estimates than in the economic impact results.

Using this modelling approach, we estimate that households connected through a voucher experience improvements in wellbeing, reflecting greater life satisfaction associated with their broadband upgrade. Using WELLBYs in line with HM Treasury guidance and drawing on evidence from the 2023 evaluation and survey, we estimate annual gross wellbeing benefits of between £40 million and £65 million across all households. After adjusting for deadweight and applying a three-year persistence period, the cumulative net additional wellbeing benefits are estimated at between £70.7 million and £115.7 million.

In addition, voucher projects extended gigabit-capable broadband to households not directly receiving a voucher. We estimate that a further 31,200 households subscribed to upgraded services as a result. Including these indirect impacts increases the cumulative wellbeing benefits to between £217 million and £367 million over three years. Of this, around £86–142 million is attributable to GBVS and £131–225 million to RGC.

5.3 Environmental benefits

The environmental benefits of vouchers arise mainly from behavioural changes enabled by improved broadband connectivity. The most important factor is reduced commuting and business travel as more people are able to work from home, which reduces travel related carbon emissions. This is partly offset by higher household energy use but is complemented by reduced office energy demand. Taken together, these effects are estimated to deliver cumulative carbon savings of between 7,760 and 9,480 tonnes CO₂e over three years.

Using the Green Book central carbon value, these savings translate into a monetary benefit of between £2.1 million and £2.5 million. By scheme, this equates to between £0.7–0.9 million for GBVS and £1.4–1.7 million for RGC.

Environmental benefits were modelled using a number of assumptions, meaning the method used to estimate impacts was less robust than that used to estimate economic benefits.  

6. Benefit Cost Ratio

The results of the cost–benefit analysis show that the voucher schemes have delivered good value for money. Across both schemes combined, the total value of monetised benefits is estimated at between £395 million and £545 million, compared with total programme costs of around £139 million. This gives an overall BCR of 2.8 to 3.9, meaning that for every £1 invested in vouchers, between £2.80 and £3.90 of benefits have been generated.

Looking at the schemes individually, the BCR for GBVS is estimated at 2.6–3.2, while the BCR for RGC is higher at 3.5–5.9. Both schemes therefore represent good value for money, though the results suggest a stronger return for RGC. The main reason for this difference lies in the composition of beneficiaries. GBVS accounted for the vast majority of business vouchers, meaning its quantified benefits are dominated by the earnings premium analysis for workers. In contrast, RGC supported a much larger share of households, so its benefits are more heavily weighted towards the monetised wellbeing impacts, which are relatively high on a per-household basis.

As noted above, the methods used to estimate earnings benefits are more robust than those used to estimate wellbeing impacts, and greater confidence can therefore be placed in the benefit–cost ratio for GBVS. 

Cost benefit analysis for voucher schemes – based on impacts realised by 2024

	GBVS		RGC		Total
	Low	High	Low	High	Low	High
Earnings benefits	175	175	1	1	176	176
Wellbeing impacts	86	142	131	225	217	367
Environmental benefits	0.7	0.9	1.4	1.7	2.1	2.5
Total value of benefits	261.7	317.9	133.4	227.7	395.1	545.5
Total value of costs	100.8	100.8	38.5	38.5	139.3	139.3
Value of benefits per £ invested	2.6	3.2	3.5	5.9	2.8	3.9

Source: GC Insight

To better understand the sources of value for money, we have also considered the costs and benefits of business and residential vouchers separately. Business vouchers account for the majority of programme spend and are the primary driver of earnings benefits, while residential vouchers account for a smaller share of costs and generate wellbeing and environmental benefits.

The cost of business vouchers, expressed in 2024 prices and excluding programme management costs, was £81 million. These vouchers are associated with estimated earnings benefits of £175 million, giving a BCR of 2.2. This reflects the stronger evidence base underpinning the earnings impacts, which are estimated using quasi-experimental methods.

The cost of residential vouchers was £21 million, with wellbeing and environmental benefits valued at between £219.1 million and £369.5 million, giving a BCR of between 10.4 and 17.6. These estimates indicate high potential value for money, but should be interpreted with caution. The wellbeing benefits are based on modelled assumptions and survey evidence, and while grounded in published research, they are subject to greater uncertainty than the earnings estimates and may overstate impacts if assumptions do not fully hold in practice.

7. Non-monetised benefits

In addition to the monetised benefits set out above, there may be a range of further benefits that cannot be robustly quantified within the cost–benefit analysis but which are nonetheless important to recognise. Many of these benefits are based on evidence gathered through the business and resident surveys and supplier interviews.

7.1 Business cost savings

Findings from the business survey showed that cost savings were one of the most widely reported benefits of improved broadband. These savings represent real improvements in productivity, as businesses are able to produce the same level of output with fewer inputs. However, because they are not directly captured in measures of turnover per employee and cannot be reliably quantified from the evidence available, these savings are not included in the monetised CBA.

7.2 More competitive pricing for consumers

Vouchers also contributed to increasing competition in the supplier market at a national and regional/sub-regional level by supporting the entry and growth of smaller providers. This may have driven more competitive pricing and service offers, benefiting consumers through lower broadband bills or better value packages. These potential gains are consistent with supplier feedback and market data but are difficult to isolate and quantify robustly, particularly given wider trends in the UK broadband market.

7.3 Digital inclusion

The residents survey highlighted that vouchers generated particular benefits for groups at risk of digital exclusion. Low-paid and economically inactive recipients, and those living in social rented accommodation, were more likely than average to report feeling less lonely as a result of their upgrade. Lone parents and those in low-skilled occupations were also more likely to have used their improved connection to gain new skills. These findings point to important distributional impacts: while the average wellbeing valuation captures improvements across all households, it does not fully reflect the fact that benefits were often more pronounced for disadvantaged groups. At the same time, these groups accounted for only a small share of voucher recipients overall, so the aggregate scale of the distributional impacts is likely to be modest.

7.4 Wider community impacts

In rural areas, improved broadband coverage may have delivered broader community-level benefits not captured in individual wellbeing estimates. For example, community assets such as village halls, schools, or local services may have gained access as an indirect result of voucher-funded upgrades. These connections can support social activities, access to public services, and the sustainability of rural communities. It should be noted that the evaluation has not captured direct evidence of these benefits so they are less certain and it is not possible to comment on the scale of benefits. These types of impacts are being examined in more detail through separate BDUK evaluations, including the Local Full Fibre Networks programme and GigaHubs programme evaluations.