Future-proofing the urban environment
A case study focused on the United Kingdom


Following the Paris 2015 agreement coming in to force, major economies including the UK have very ambitious Nationally Determined Contributions (NDCs) that they have pledged to honour in terms of achieving greenhouse gas emissions reductions. It will be necessary for government and the private sector to go much further in the deployment of technology to achieve the agreed goals.

UK cuts in emissions thus far have relied on the power generation sector and on the decreased output following the 2008 recession so there is still much more work to be done to achieve a decoupling of economic growth and CO2 emissions.

Although the UK has by tradition been a largely deregulated and business-friendly environment, the telecom sector is one area where market distortions have emerged and this has combined with a lack of state investment in future infrastructure to give the UK broadband speeds that are falling behind the EU average.

Data on the effectiveness of ICT infrastructure and smart cities programmes as well as case studies from other countries can be applied to urban Britain to demonstrate how government investment is the most cost effective method of delivering immediate reductions in CO2 emissions without sacrificing jobs or economic growth. There are opportunities for the private sector to drive the investment in certain sectors but with the key urban infrastructure of fibre broadband we intend to highlight why national or local government are well positioned to make the initial investments, or at a minimum to establish policy to incentivise public-private partnerships for such projects. We can also demonstrate how such investment will deliver a positive medium-term financial return as well as deliver valuable societal benefits in additional to the environmental benefits.

Environment

Much more work to achieve emissions reductions is required to meet the targets set by COP21 for emissions by 2020 and 2025.[1] So far, the majority of the progress that has been made in the UK has come from the switch in energy generation away from coal power plants, a sector which is important but which cannot alone deliver the emissions reductions needed.[2] A rise in road transport emissions even regardless of stricter standards on new auto vehicles means that road transport is now the UK’s leading emissions sector, accounting for 24% of all C02 emissions.[3] This indicates that despite some overall reduction in CO2 emissions, British economic growth is still intrinsically linked to rising pollution.

Furthermore, 40 of 43 UK zones were found to be breaching 2010 limits for air pollution in 2014 leading to £300 million in fines being levied by the EU.[4] Even with the UK government plans to introduce Ultra Low Emissions Zones and promote electric vehicles, this strategy will not bring many urban areas in line with the clean air standards until 2030 and central London is not expected to reach this standard at all which will mean pollution fines will be levied for many years to come.[5]

The immediate effects of this pollution are on population’s health; almost 9,500 people die early each year in London due to long-term exposure to air pollution[6], part of a rising European trend estimated to have a financial cost of more than $1.6tn (£1.5tn) a year in economic terms.[7]

The much heralded Crossrail project constructed to create a high speed link between central London and its more distant suburbs is already expected to be operating at full capacity when it opens in 2018[8] and the platform lengths and station sizes of London’s nineteenth century underground rail network make any future expansion impossible beyond increasing the frequency of trains.[9] Such bottlenecks have led the transport authority to rely on buses to accommodate the rising passenger numbers[10] and to increase investment into bridges and roads[11] intended to increase the traffic flow into the city at a time when environmental concerns should motivate policy to discourage private vehicle use.

As the city that pioneered in 2003 what was then the largest camera-controlled congestion charge scheme ever undertaken by a capital city, London has typically been aware of the need to make the major investments needed to ensure its future growth potential and maintain its status as an economic and technological powerhouse.[12] Investment in ICT infrastructure can address the problems of emissions targets, air pollution and more by making business, education and health services no longer directly coupled to transport; figures show that economic growth could increase with investment in the sector but with no corresponding rise in carbon emissions.[13] An inevitable end to the unchecked growth of construction and other carbon intensive industries now makes a clear case as to why the UK stands to gain from immediate investment in its future urban infrastructure and why ‘dematerialised’ economic growth can allow London to develop its technology and an innovation based economy by meeting its environmental obligations.

Congestion

The UK has seen massive urban population growth since the middle of the last century and this is projected to continue with 92.2% of the entire population expected to live in urban areas by 2030. This figure, combined with the fact that over one-third of the population lives in London and the Southeast, has inevitably led to a lack of housing, congested transport and lost productivity. Drivers in most of Western Europe wasted 54 hours on average annually through traffic in 2013[14] with figures estimating that even those who use public transport in London have a higher average commute time than any major EU city.[15]

Although London’s average population density is relatively low by the European average, in addition to its population of 8.6 million within the city limits, its ageing transport system also has to accommodate over 3 million workers who commute into the city each day.[16] Restricted development within the “green belt” surrounding London has led to some housing becoming high-density with certain boroughs having population densities in excess of 12,000 people/km2 – equivalent to or in excess of the most concentrated EU capitals.[17]

Figures used in calculating the commercial viability of full fibre broadband to the home or premises in one London borough found that with a median income significantly above the national average[18] and an educational level that was high and growing,[19] much of the technology or service-based employment prevalent in the area could easily be wholly or partially undertaken by video or other forms of E-working.[20] Broadband availability’s record of attracting business to an area has been objectively proven via several case studies[21] and in the UK where the wider technology sector now accounts for around 10% of GDP (more than the agricultural and automotive sectors combined)[22] this would lead to an immediate realisation of new business and employment in areas with cheaper rent, vacant business premises or available housing.[23]

Despite having near-universal access to semi-fibre broadband via Fibre To The Cabinet (FTTC), urban areas even in the capital have some of the slowest internet service in the entire country[24] and there are no plans to install the ducting or cabling that would give the full (Fibre To The Premises) FTTP service necessary for high-bandwidth usage.[25] This matters because effective broadband video communication is strangled by insufficient bandwidth. Independent closed networks offering full FTTP are already beginning to appear across Britain. These are typically backed by private investors[26] although they often take advantage of state subsidisation[27] whilst still offering a service to only those more affluent or high-density areas where the high initial cost of fibre installation can be immediately recouped by the prevalence of wealthy households or commercial premises.[28]

Additionally, though all figures relating to the full nationwide installation cost of FTTP are speculative, consensus exists that economies of scale cause the per-premises installation cost to drop as the overall adoption rate increases; small-scale private networks targeting commercial and high-value premises are thus removing the top end of potential customers or early adopters and inflating the cost of future blanket installation.[29] Semi-public rollouts of Fibre To The Home (FTTH) on a smaller scale have shown that London has both the commercial market and building density necessary to make the initial upfront costs well worth bearing and that such projects would be viable either for a network seeking to build its own grid or for private ISPs offering services via public fibre provision, however, they require public subsidy or loans to begin.[30]

Social Inclusion

Addressing growing inequality is a declared priority of both national government[31] and the mayor of the devolved London assembly.[32] Figures on London in particular demonstrate the scale of this problem; as the richest part of the country it also has the highest levels of poverty; it has real estate that is among the most expensive in the world yet also houses the highest proportion of renting tenants in the country.[33] The social implications of this inequality are striking: factors such as income or occupation are clearly linked to health problems with those living in the poorest neighbourhoods dying on average, seven years earlier than people living in the richest neighbourhoods.[34]

The elderly in particular suffer from a lack of easy access to healthcare[35] and Europe’s population demographic is expected to contain a significantly larger proportion of elderly people in the years to come.[36] The elderly and those with long-term illnesses, the least mobile patients, already account for 50% of all GP appointments and 70% of the total health and social care spend in England despite making up just 29% of the population.[37] Mobile applications and telepresence are already being introduced for the infirm or housebound but a high bandwidth full fibre connection would allow features such as full body function monitoring remotely or for caregivers and family members to have a constant contact with their patient/loved one. Such applications require neither familiarity with specific equipment nor expensive hardware; a FTTP network would allow their use via existing televisions or other domestic equipment.[38] The UK already has significantly fewer physicians and hospital beds per person than most of its European neighbours adding further to the value of any potential ICT-based solution alleviating overcapacity within the health system.[39]

Access to decent education and employment prospects suffer from inequality too: children assessed as early as age 5 as having low cognitive ability but living in a more affluent household are still significantly more likely to become high earners than their high ability peers from lower income backgrounds.[40] In addition, the poverty rate in central London boroughs is considerably higher than suburban areas or the national average.[41] Figures have long been available attesting to the immediate local job-creation potential of a large scale fibre internet roll-out with a ₤5 billion investment estimated to create or retain an estimated 280,500 UK jobs for a year and a further ₤15 billion invested in ICT infrastructure yielding approximately 700,000 jobs, mostly in SMEs.[42]

Although primary and secondary schools have seen investment to remedy inequality trends and the gap in application and entry rates to higher-level education between advantaged and disadvantaged students has narrowed, it is still recognised to be “unacceptably large”.[43] There is also a broader concern that the overall UK curriculum is outdated and not preparing students for the type of employment likely to be available in the future.[44] Research shows that both improving the nature of UK education and bringing it to a larger audience would result in upskilling the workforce and increase the value of human capital.[45] Both universities and companies are already making huge investments in putting their educational and training content online and more students having signed up for MOOCs (Massive Open Online Courses) in 2015 than in the previous three years combined. There is therefore clearly an appetite for innovative, on-demand educational offerings that can be scheduled around working or to mitigate geographical distances.[46] It is estimated that by 2030, ICT-enabled education practices could be helping almost 1.5 million E-Learning secondary and higher education students every year in the UK and delivering savings over $10 billion on student expenditure.[47] These savings would see investment in digital infrastructure offer a significantly better return as well as attaining social good rather than diverting similar amounts to the traditional education sector.


Investment

Increased subsidies for renewables, promotion of electric vehicles and multiple other measures are all emerging as strategies to meet the targets set by the UK’s own carbon budget but additional solutions are required to deliver the desired results.[48] As a highly innovative sector, the ICT industry stands as an example of how ‘dematerialised growth’ can be at the heart of a progressive agenda; its own massive economic growth in recent years has led to only 7.5% network energy consumption growth on average for the global mobile industry and it has in place a strategy to mitigate this whilst simultaneously delivering massive emissions reductions to other sectors.[49]

Full Fibre To The Premises (FTTP) broadband is one such ICT solution but where past plans to deliver broadband in the UK have failed is the obligation to deliver a basic minimum service to the entire population. This led to unambitious targets set for more technologically or economically advanced urban areas and unrealised plans to extend fibre to the rural population because of a lack of private sector ability to participate in unprofitable projects.[50] The state-funded Broadband Delivery UK (BDUK) scheme[51] was intended to provide superfast broadband (speeds of 24Mbps or more) for at least 95% of UK premises and universal access to basic broadband (speeds of at least 2Mbps) by 2016 via inviting tenders for fibre infrastructure projects and operating a voucher scheme by which SMEs could offset the installation costs of FTTP.[52] Few projects were ever taken up by private ISPs and those networks which were laid by OpenReach, delivered only FTTC to residential properties with no plans for full FTTP. A focus on meeting the government Universal Service Commitment has since seen funds directed to subsidising satellite broadband in order to achieve a universal minimum speed rather than pursue a very much higher average speed for the majority.[53]

In London particularly, it is acknowledged that there is a substantial shortfall in funding between what the government has earmarked for future infrastructure projects and what will be required. A post-Brexit loss of EIB funds (currently contributing €7.77 billion to infrastructure projects in the UK) will make the identification of alternative investment sources an even more urgent priority. The devolution of fiscal powers to urban areas to raise capital or allocate their own tax income is one such suggestion as to where the required investment could come from and presents an opportunity for cities to take the initiative in funding the future infrastructure they need.[54] Nationwide, the UK is recognising the need for additional capital investment in broadband infrastructure: the UK Guarantees Scheme for example has supported Virgin Media with a sovereign-backed pledge to assist its £3 billion capital raising for investment in new fibre installation.[55]

In recognition of the significant financing required to curb world GHG emissions and mitigate climate change there has been a massive effort to mobilise the $100 trillion world bond market for climate change solutions. Green bonds worth $42.2 billion were issued in 2015 and the forecast for 2016 is $100 billion. The major innovations in the market however include Apple’s issuance of a $1.5 billion green bond to fund several initiatives including the company’s conversion to 100% renewable energy, installation of more energy efficient heating and cooling systems and an increase in the company’s use of biodegradable materials[56] and at a UK level, the first instance of a municipal authority issuing green bonds to fund its renewable energy projects.[57]

This is just the formalisation of both corporation’s and local authority’s existing aspiration to raise capital to invest in sustainable development and in the case of councils, in tangible infrastructure projects which will deliver visible benefits to their population as well as predictable, steady returns on capital. Some of the largest public pension funds in the UK have already formed special purpose investment vehicles to finance infrastructure projects that provide not just an economic return but a positive social and environmental outcome.[58] Even these early forays into long-term investment in green infrastructure have mobilised over £400 million for social impact projects and as the equities and government bonds traditionally relied upon by pension funds to yield a long-term return on investment are revised downwards,[59] projects such as ICT infrastructure will not only appeal more to the institutional investor but will be ideally placed to attract investment due to their proven green credentials.

Global Impact

Although governments will initially look to their immediate energy policies and infrastructure plans to realise the emissions reductions to which they have pledged, it is expected that developing nations will present the best opportunities for cost-effective large-scale projects to reduce emissions.[60] This was the understanding of the Paris agreement which requires that developed nations mobilise $100 billion (£65.9 billion) of public and private finance for developing countries each year after 2020 and a potentially higher sum by 2025.[61] This is both an opportunity and responsibility for the ICT sector as developing countries, those most immediately threatened by climate change, are already doing much more to adopt energy frugal methods of growth and conserving energy but could do more still if they had access to finance, technology and capacity building from developed countries.[62]

Unplanned and rapidly accelerating urbanisation is even more prevalent in developing countries than OECD states though adherence to the same development model followed by the west means that the vast majority of official development assistance is directed to transportation and traditional infrastructure projects[63] – projects which will provide an immediate economic benefit but ultimately leave urban regions straining to contain their populations and suffering from the same problems of pollution and congestion as older cities.[64] Consider for example India’s Eastern Dedicated Freight Corridor (DFC) project which has received $2.725 billion in World Bank funding with the corresponding Western Corridor being backed by 550 billion yen from the Japan International Cooperation Agency (JICA). Such infrastructure will doubtlessly increase trade and lower the cost of doing business in India[65] but is unlikely to create the same immediate access to education and employment or emissions reductions as improving internet bandwidth, especially considering that the overall ICT workforce in India comprises 2.5 million workers[66], with around 400,000 ICT postgraduates joining every year.[67] In addition, although India is expected to have a slower transition period to a carbon-free economy than the west, its economic growth between 1990 and 2012 was accompanied by a 198% rise in emissions. If it is to become the world’s most populous country as expected within ten years it is therefore urgent that India’s economic growth is made sustainable and decoupled from carbon emission rises immediately.

The traditional pathways to economic development are changing with the world economy and it is now estimated that building ICT infrastructure in countries where universal provision has yet to even be met could be the most effective way to lift communities out of poverty and increase access to education, employment and healthcare.[68] Furthermore, the potential to undertake large-scale city-wide infrastructure projects in this currently underserved space in developing economies could see a reduction in the economic burden of smaller tenders and planning bureaucracy leading to expanded markets at an even lower cost per consumer reached than has been achieved in OECD countries.[69]

The climate finance pledged towards adaptation strategies, when calculated according to the terms of the of the Climate Equity Reference Project (CERP) would see British contributions rise significantly to $2.5bn by 2020 and $6.3bn by 2025, still an affordable amount totalling 0.06% and 0.15% of GDP respectively.[70] Though debate continues as to whether these targets will be met (they are not legally binding) or if they should come from the 0.7% of GDP that the UK currently allocates to foreign aid, it is accepted that it will not be standalone finance for entire projects - public money is intended to leverage an additional two to three times as much private capital investment in projects and the real emphasis will be on incentivising large-scale investments that will draw capital away from high-polluting projects.[71] When the striking impact such investment will have is compared to the estimated 2.6% - 3.1% of GDP that EU countries would have to spend just to maintain their existing infrastructure to accommodate future growth[72] it becomes clear that both the financing and roll-out model of FTTP in the UK would serve as a test case or flagship project for much larger, more cost-effective projects delivering social and environmental impacts several times greater in developing economies.

Conclusion

The UK and London in particular has sufficient population density, IT-based industry and income profile to benefit from immediate investment in smart city infrastructure, and FTTP in particular.[73] Current plans are limited to short-term solutions such as enhanced broadband speeds within the limitations of the copper cable network or smart metering using cellular technology which will bring efficiencies and emissions reductions but soon reach the physical limitations of that technology.[74] There is a strong case to “future-proof” digital infrastructure now, pre-empting future bottlenecks in service or a loss of competitiveness to cities offering an environment more conducive to future industries.

In the UK, the National Infrastructure Assessment (NIA) will publish their next report in 2017. The NIA is an agency created with the mandate to deliver a high-level, long-term context for infrastructure decisions, taking account of interactions between sectors and the potential impact of technological change. A key output of the NIA will be a set of recommendations for strategic priorities over the next 5-10 years. Their current priorities appear to be a smart power grid and the introduction of charging stations for electric vehicles – the former already being underway albeit using cellular infrastructure and the latter being a necessary project but one unlikely to bring either significant emissions reductions or a return on investment in the short to medium term.

There has already been ample evidence of steps in the right direction by policymakers such as implementation of a Civil Infrastructure Directive designed to reduce the cost of deploying fibre by giving a right of access to existing civil infrastructure,[75] inclusion of a “Digital Democracy Manifesto” pledging to invest and lend £500 billion over a 10 year period to support high-speed broadband rollout in the plans of the opposition Labour party[76] and a pledge to appointment of a Chief Digital Officer by new London Mayor Sadiq Khan in recognition of the importance of having policy advice and digital expertise within the devolved London authority.[77] In contrast to this however, the Valuation Office recently revaluated the national business rates to effectively treat fibre as part of a business premise, and as such, apply a rateable value to fibre optic cables – a policy which will see the national infrastructure providers face a tax increase from £550m to £714m next year. This will hit smaller ISPs particularly hard with fourfold tax increases and it will inevitable discourage future investment in new networks.[78] The UK has shaped itself to become one of the preeminent centres of innovation and digital technology today. With ambitious targets for emissions reduction and climate finance on the horizon there is a clear roadmap on how this expertise can be utilised to achieve continued economic growth in line with these goals. Only adequate investment, innovation-friendly policy and daring large-scale future-proofing projects can achieve this.

Recommendations

As local county and borough councils potentially take on responsibility for managing their own infrastructure budgets and delivering emissions reductions in line with wider UK targets there will be an opportunity for the implementation of ICT integration schemes to meet targets for employment, education, social inclusion, healthcare and environmental standards. Outlining specific objectives for regional or community-level enhancement projects are not traditionally the field of the ICT industry as infrastructure planning has generally taken place at a higher level.  The ICT industry is therefore now presented with a unique opportunity to present the case for investment in FTTP and to demonstrate the benefits that accompany it at a local level. Furthermore, as UK councils continue to divest from traditional equities and instead look to “real assets” to deliver a social good as well as a return on investment, there is an immediate opportunity to encourage use of local authority’s own pension scheme capital to fund establishment of high bandwidth digital infrastructure. Our research outlines the clear requirement for stronger state support to the private telecom market in order to achieve a timely roll-out of necessary digital infrastructure. In summary, we make the following policy recommendations:

Increased state investment in broadband provision with an emphasis on the importance of immediate network investment connecting entire regions to deter the emergence of regional monopolies or a widening “digital divide”.
An improved regulatory environment for deploying FTTP with clear regulation on the provision of access to municipal infrastructure, the post-Brexit regulatory landscape and the provision of finance or tax incentives appropriate for projects aimed to help the UK meet its emissions reductions.
Government policy to fund and encourage the implementation of ICT solutions in other sectors such as healthcare, education, urban infrastructure etc.

References:

[1] “Meeting Carbon Budgets – 2016 Progress Report to Parliament”, Committee on Climate Change, June 2015

[2] Emissions reduction in the power sector alone are shown to be insufficient to meet the fourth, or recommended fifth, carbon budgets or the 2050 target. Current policies are also not sufficient to continue the good progress to date or broaden it to other sectors according to the Committee on Climate Change. “Meeting Carbon Budgets – 2016 Progress Report to Parliament”, Committee on Climate Change, June 2015

[3] “Meeting Carbon Budgets – 2016 Progress Report to Parliament”, Committee on Climate Change, June 2015

[4] “Environment: Commission takes action against UK for persistent air pollution problems”, European Commission, 2014.

[5] Three central London roads have been identified – Oxford Street, Brixton Road and Knightsbridge which will still exceed NOx emissions standards despite any proposed measures to curb emissions.“Up in the Air: How to Solve London’s Air Quality Crisis: Part 2”, Richard Howard, Sean Beevers and David Dajnak, Policy Exchange, 2015.

[6] “Understanding the Health Impacts of Air Pollution in London”, Heather Walton, David Dajnak, Sean Beevers, Martin Williams, Paul Watkiss and Alistair Hunt, King’s College London, 2015

[7] “Supreme court orders UK to draw up air pollution cleanup plan”, The Guardian, 2015.

[8] “Sir Peter Hendy, a former boss of Transport for London (TfL), the body responsible for the city’s public transport, predicts that Crossrail will be “immediately full” when it opens in 2018. “London is working”, The Economist, 2015.

[9] A project estimated to cost £16.42 billion (£9.86 billion at 2013 prices) has recently gone to tender and will increase train frequency on some lines by up to 60% to a maximum of one train every 90 seconds. “New Tube for London Programme – Delivery Stage: Design and Specification”, Transport for London (TfL), 2014

[10] Bus travel within London has consistently risen by roughly 30% in the last ten years, doubling since 1985/86. Introducing a ticket to integrate multiple bus trips into a single journey was a key part of the new mayor, Sadiq Khan’s campaign in recognition that such journeys are now necessary for many commuters. “Annual bus statistics: England 2014/15”, Department of Transport, 2015; “Sadiq Khan confirms new £1.50 one-hour 'hopper' London bus ticket”, London Evening Standard, 2016.

[11] Thirteen new river crossings are expected to be added by 2050, mostly adjacent to existing crossings in order to relieve congestion. “TfL Budget 2016/17 and Business Plan”, Transport for London (TfL), March 2016.

[12] According to figures from the Boston Consulting Group London has already established itself as the tech capital of Europe with technology contributing around £180 billion a year to GDP and the UK digital economy as a while representing a larger proportion of the total economy than in any other G20 country. “UK eGDP 2010-2018 Summary of forecasts” Boston Consulting Group, 2015.

[13] The historical trend holds that for every 1% increase in global GDP, CO2e emissions have risen by approximately 0.5% but GeSI’s own modelling shows how emissions mitigated via ICT solutions in other sectors combined with the economic growth in ICT itself can break this trend. “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[14] Data from INRIX, “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[15] Data from Waze, the Google-owned navigation app puts the average London commute at 41.2 minutes, the 12th longest in the world and accounting for over 80 minutes of lost productivity per day. “The 20 cities with the longest commutes in the world”, Tech Insider, 2015

[16] Based on current growth rates the London Underground is expected to handle 1.7 billion passengers per year by 2026 as London's population is forecast to grow from 8.8m to 10.2m by 2030 according to Miles Ashley, London Underground's programme director for construction. “Tube network 'to be put out of action within 15 years' due to soaring population” London Evening Standard, 2016

[17] “Land area and population density”, Greater London Authority, - SHLAA-based population projections, Capped Household Size model, short-term migration scenario, 2015

[18] Data from the 2011 census shows that at £49,500, “the average total income in Wandsworth is well above the national median, with the area ranking in the top 20% of districts nationally. By comparison, the London Central figure is £63,170 and the national figure is £26,845.”. “Employment and business statistics”, Wandsworth Borough Council, 2016

[19] As part of a wider London trend which sees spiralling property prices force less qualified low earners out of the city, between 2001 and 2011, the number of usual residents with Level 4 qualifications and above (Bachelor’s degree equivalent) increased by 42%, leading to a 6.3 percentage point increase in the proportion of the population. This was offset by a reduction in the number of people with lower level qualifications. “Employment and business statistics”, Wandsworth Borough Council, 2016

[20] Nationwide, the UK had the fourth-highest incidence of home-working in the EU even in 2012. “UK Broadband Impact Study – Baseline Report, January 2014”, UK Government / SQW, 2014

[21] “The realized value of fiber infrastructure in Hamilton County, Tennessee”, Bento J. Lobo, Ph.D., CFA, The University of Tennessee at Chattanooga. 2015

In the UK 94% of small business owners consider a reliable internet connection critical to the success of their business, 14% consider  lack  of  reliable  and  fast  broadband  connectivity to be their main barrier to growth and 40% said improved digital infrastructure in their area would encourage them to invest in new technology. “The fourth utility: Delivering universal broadband  connectivity for small businesses across the UK”, Federation of Small Businesses, 2014

[22] Including sectors such as consumer electronics, defence etc. in the ICT figures, it is estimated that over 1 million people are employed in ICT and that the industry contributes 10% of UK GDP – a greater share than the whole of agriculture (5.8%) and all the automotive sectors (3.5%). “High Tech: Low Carbon - The role of technology in tackling climate change”, Intellect, 2015

[23] A study of the publicly-owned FTTP project installed in Chattanooga, Tennessee concluded that “over  the  period  2011-2015,  the fiber  infrastructure  has  generated incremental economic and social benefits ranging from $865.3 million to $1.3 billion while additionally creating between 2,800 and 5,200 new jobs.” and that the true economic value of the infrastructure is much greater than the cost of installing and maintaining it. “The realized value of fiber infrastructure in Hamilton County, Tennessee”, Bento J. Lobo, Ph.D., CFA, The University of Tennessee at Chattanooga. 2015

[24] The government claim is that 90% of all UK premises now have access to “superfast broadband” meaning 24Mbps+ but a uSwitch.com study claims that 20 of the UK’s 42 “biggest cities” still have average speeds below this figure. “The Top 42 Fastest and Slowest Big UK Cities for Broadband Speed”, ISP Review, 2016

A report by Content Delivery Network, Akami puts the average UK internet speeds at just 15Mbps, 12th in the EU and 20th in the world. This figure is for average speeds and the UK’s ranking drops further when applied to average peak connection speeds. “Average UK Internet Speeds Hit 15Mbps as World Rank Falls to 20th”, ISP Review, 2016.

[25] BT have abandoned their FTTP scheme and are instead committed to using the existing copper cable network to create a hybrid “Fibre to the Distribution Point” (FTTdp) or “G-fast” service which can deliver speeds varying in distance depending on the distance of each building from the point where the copper and optical cables connect but which crucially, cannot be upgraded any further without replacing the copper with full fibre. “First homes connected in BT G.fast trial”, Samantha Smith, Choose. 2015

[26] Hyperoptic, who already connect 75,000 homes to full FTTP across Britain are predominantly backed by equity investment of £50 million from Quantum Strategic Partners Ltd., a private investment vehicle managed by Soros Fund Management but have also received £21 million from the European Investment Bank. Publicly traded CityFibre raised £80 million in a share issue to buy up existing fibre networks, now own 40 major UK metro networks and are the UK’s largest alternative provider of wholesale fibre network infrastructure.

[27] Gigaclear, also a private company predominantly owned by Woodford Investment Management have received £20 million in European Investment Bank funding as well as £10m from the UK’s rural broadband subsidy scheme having won tenders to lay fibre in three rural areas. “Gigaclear boss Matthew Hare calls time on BT as his broadband firm targets 100,000 new homes”, The Telegraph, 2016

[28] CityFibre’s plans to offer “broadband speeds 56 times faster than the UK average” in York for example will only actually reach 20,000 homes, roughly 10% of that city and even these will be clustered in the centre of the town and along the main roads close to the main fibre network. “'Ultrafast' 1,000Mb broadband coming to York in 2015”, Julia Kukiewicz, Choose, 2015.

[29] Figures from Plum Consulting’s 2008 study for the Broadband Stakeholder Group put a nationwide per-premise average installation cost at £768 but saw this figure rise by over 50% if take-up dropped to 50% nationwide and increase threefold if take-up was only 20%. “A Framework for Evaluating the Value of Next Generation Broadband : A report for the Broadband Stakeholder Group”, Plum Consulting, 2008

[30] Tenders were invited to provide FTTP to council-owned properties in the London borough of Wandsworth and in response received two private sector bids, one requiring a council subsidy paid per connection and another willing to connect even lower-density housing and to pay £50,000 to the council in exchange for the concession for the first three years of the contract. “Joint report by the Executive Chief Officer for Housing and the Head of IT and Business Communications on the letting of a concession contract to allow high speed broadband to be installed in Council-owned residential properties – Paper no. 14-253”, Wandsworth Borough Council, 2014.

[31] “Statement from the new Prime Minister Theresa May”, Prime Minister’s Office, 2016

[32] “A fairer and more equal city – Sadiq Khan for London”, London Labour Party, 2015.

[33] A poverty rate of 27% puts London firmly at the bottom of the list, a statistic that has remained the case for over fifteen years. “Poverty rate by area”, Joseph Rowntree Foundation, 2015

In terms of income inequality, London contains the highest proportion (15%) of people in the poorest tenth nationally and the second highest proportion (15%) of people in the richest tenth. “London’s Poverty Profile”, Trust for London / New Policy Institute. 2015

[34] “Fair Society, Healthy Lives [The Marmot Review]”, Marmot, M. 2010

[35] People over 65 years old visit a General Practitioner about seven times a year on average which is higher than the overall average rate and may present difficulties if they are infirm or immobile. “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[36] According  to  the  2012  Ageing  Report of  the  European  Commission  Europe’s population   is   projected   to   continue to  grow  older,  with  the  share  of  the population aged 65 years and over rising from 17% in 2010 to 30% in 2060, and those aged 80 and over rising from 5% to12% over the same period. “The 2012 Ageing Report Economic and budgetary projections for the 27 EU Member States (2010-2060)”, European Commission, 2012.

[37] “Ten things you need to know about long-term conditions. London: Department of Health”, Department of Health. 2008.

 

[38] The  town  of  Nuenen in the Netherlands (which has FTTP availability and a high take-up of the service) has already linked its isolated elderly  population  over  high-speed  networks  to  create  a video-based platform of community exchange to reduce loneliness. “What Fibre to the Home can do for your community”, Fibre to the Home Council Europe, 2016.

[39] The UK had 2.8 physicians per 1,000 people in 2015, compared to 4.1 in Germany (2014), 3.9 in Italy (2014), 3.8 in Spain (2014), 3.5 in Australia (2014), 3.4 in France, 3.0 in New Zealand and 2.6 in Canada (2014). The UK had 2.7 hospital beds per 1,000 people in 2014, compared to 8.2 in Germany, 6.2 in France, 3.0 in Spain, 2.8 in New Zealand and 2.7 in Denmark. “Key statistics on the NHS”, NHS Confederation, 2016.

[40] “New Research Exposes the ‘Glass Floor’ in British Society”, Social Mobility and Child Poverty Commission, press release, 2015

[41] Child poverty in particular is a noticeable problem with children in Inner London experiencing the highest poverty rate at 46%, 13 percentage points higher than in Outer London and 20 percentage points higher than in the rest of England. “London’s Poverty Profile 2015”, Trust for London / New Policy Institute. 2015

[42] “The UK’s Digital Road to Recovery” Information, Technology and Innovation Foundation (ITIF), 2009

[43] “Independent Commission on Fees 2015 Final Report”, Independent Commission on Fees, 2015

[44] Claim made by Andreas Schleicher, of the Organisation of Economic Co-operation and Development ahead of the Global Education and Skills Forum. “Maths teaching in the UK is 'superficial', says education expert”, The Independent, 2016

[45] “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[46] “MOOC enrolment surpassed 35 million in 2015”, ICEF Monitor, 2016

[47] “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[48] Former Mayor of London Boris Johnson, for example, unveiled an ambitious infrastructure plan requiring £1.2 trillion to be invested in the capital’s infrastructure until 2050 but with just £9.8bn designated for digital connectivity, the lowest investment share of any sector. “How £1.3 trillion needs to be spent on city infrastructure by 2050 for London to stay competitive” City AM, 2014

[49] “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[50] “Designing the broadband universal service obligation - Summary of responses to the call for inputs”, Ofcom, 2016.

[51] Most BDUK funding was matched by local authority funding meaning a total public investment of around £1.7bn up to 2015. “Broadband Delivery UK”, UK Government, 2015.

[52] The connection voucher scheme was funded up to £40 million by the government challenge fund and upon termination in April 2015 had seen 55,000 vouchers issued and 770 suppliers win voucher business. Early Impact analysis shows satisfaction with the scheme among the businesses who adopted it. 86% of the total value of the vouchers issued was accounted for by smaller independent ISPs. “Connection Vouchers - Early Impacts & Data Analysis” Department for Culture, Media and Sport, 2016.

[53] “Government to Start Rural Pilot of Free Broadband Satellite Subsidy”, ISP Review, 2015.

[54] One of the Greater London Authority’s principal recommendations was to ensure that England’s core cities gain the powers and fiscal autonomy to shape the provision of infrastructure and incentivize growth. “The cost of London's long-term infrastructure - Final report - REP003”, Greater London Authority (GLA), 2014

[55] “The digital communications infrastructure strategy – Policy paper”, Department for Culture, Media and Sport, 2015

[56] “Can Apple's $1.5bn green bond inspire more environmental investments?”, The Guardian, 2016

[57] “Councils should use bonds to fund green infrastructure projects, says Lord Mayor of London”, The Independent, 2016.

[58] “Investing4Growth” uses available investment capacity from local communities, which have contributed to the pension funds (the £16 billion Greater Manchester Pension Fund, the largest in the UK and five smaller funds) to be used for the benefit of these communities following earlier work undertaken by the Smith Institute, CLES, the Local Authority Pension Fund Forum and PIRC to identify possible challenges to these types of investments. “Investing4Growth”, 2016.

The UK Environment Agency Pension Fund also directed 28% (£769m) of its assets were invested into companies with more than 20% of revenues derived from energy efficiency, alternative energy, water and waste treatment, and public transport, and investing in property and infrastructure funds with low carbon or strong sustainability criteria. “Environment Agency pension fund to ramp up private debt investments”, Investment and Pensions Europe, 2016.

[59] “Pensions and bonds: the problem explained”, FT, 2016.

[60] A world Bank study on incentivising growth in the clean energy sector and other areas in the world’s poorest countries concluded that as  global  financial institutions  pledge  to  invest  hundreds  of  billions  of  dollars  in climate investments, so emerges an opportunity that  “demands  the  creation  of  products  that  attract  larger  institutional  sources  of capital  through  aggregation  and  securitization;  the  creation  of  de-risking  vehicles  that  use blended  finance  to  catalyze  new  external  investment;  and  mobilizing  capital  through  public-private partnerships (PPPs)”. “Incentivizing investment in underfunded areas, including clean and affordable energy”, International Finance Corporation (World Bank Group, 2016.

[61] “Paris climate change deal - ministers adopt historic agreement to keep global warming "well below" 2C”, The Telegraph, 2015

[62] “Paris climate talks: Developed countries must do more than reduce emissions”, The Guardian, 2015

[63] The Japan International Cooperation Agency (JICA) which is the largest distributor of official development assistance in its neighbouring East and South East Asian countries and dished out more than $5 billion in loans for transportation infrastructure projects in 2012. “The Real Reason Japan is Building Roads in Poor Countries Everywhere”, Next City, 2014

[64] As well as inducing rural-urban migration and the problems that come with it by catalysing urban growth, there is evidence that “Accelerated urbanization is not an automatic panacea for all the ills of economic growth.” And that only through nationwide planned growth can sustainable economic development be achieved. “The Global Pattern of Urbanization and Economic Growth: Evidence from the Last Three Decades”, Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographical Sciences and Natural Resources Research, CAS, Beijing, China, 2014

[65] Existing railway lines are congested and it is envisioned that the new Eastern and Western corridors will allow much more freight to be transported faster and at more competitive rates. The Eastern DFC is expected to carry 153 million tonnes (mt) of traffic in 2021-22, which will increase to 251 mt in 2036-37. The Western DFC is expected to carry 161 mt of traffic in 2021-22, which will increase to 284 mt in 2036-37. “Cabinet nod to raise cap to build eastern, western freight corridor”, Mint, 2015

[66] “KIG 2020 Report”, 2013 cited in “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[67] “Ministry of Human Resource Development, India”, cited in “#SMARTer2030 - ICT Solutions for 21st Century Challenges”. GeSI / Accenture, 2016

[68] Under-developed areas often derive even greater benefit from broadband fibre access according to a 2009 report by the World Bank which reported that every 10-percentage-point increase in broadband penetration accelerates economic growth in low-and middle-income countries by 1.38 percentage points – more than in high-income countries and more than for any other telecommunications service. “2009 information and communications for development: extending reach and increasing impact”, The World Bank, 2009.

[69] A strong regulatory framework and state promotion of PPPs are known to be the factors in encouraging the building of networks and the cause of a subsequent drop in the wholesale and retail cost of broadband connectivity – the eventual driver of service usage. The Kenyan government’s clear policy in these areas for example led to their increasing of fibre optic backbone capacity from relying on satellite for international capacity, to having access to almost four terabits over fibre from the three cables combined. This was accompanied by an 80% decrease in wholesale bandwidth costs. “Broadband Experience in Selected Countries”, Broadband Strategies Toolkit (World Bank Group), 2014

[70] “Mind the Adaptation Gap: Why rich countries must deliver their fair shares of adaptation finance in the new global climate deal”, ActionAid, 2015.

[71] Hela Cheikhrouhou, head of the Green Climate Fund, the UN body set up to dispense climate finance donations, speaking to “the Guardian” said that public money can often leverage an additional two to three times as much private capital investment in a project.

Smita Nakhooda, climate finance leader at the Overseas Development Institute (ODI) said that the (overall) $100bn target was a “crucially important” carrot that would draw trillions of dollars away from high-polluting projects. “UK's £6bn climate finance pledge is welcome – but not its fair share”, The Guardian, 2015.

[72] “Infrastructure Productivity: How to save $1 trillion a year”, Richard Dobbs et al., McKinsey Global Institute, 2013

[73] The UK, the world’s fifth largest economy and the second largest in Europe, grew by 1.7% in 2013 and saw its per capita GDP rise to a little under £32,270. “High Tech: Low Carbon - The role of technology in tackling climate change”, Intellect, 2015

According to 2014 statistics London generates €531,931 million per annum accounting for 30.2% of British GDP. EuroStat

[74] “Techniques such as bonding (using multiple cables), vectoring (noise cancellation) and phantom mode (both techniques together) can boost capacity, but all have their drawbacks. The newest standard, expected to be complete in 2014, called G.Fast, promises to provide speeds of 500Mbps, but over a very limited range of 100m. While copper-based broadband speeds are improving, the gains can only be exploited by simultaneously bringing fibre closer to the consumer.”. “Five common FTTH myths debunked”, Hartwig Tauber, Fibre Systems, 2013.

[75] “EU Broadband Cost Reduction Directive”, Department for Culture, Media and Sport, 2015.

[76] £350bn of this money would come from the public purse via a new National Investment Bank (NIB) e.g. it would be government-issued debt. “Jeremy Corbyn Pledges £25bn for National UK FTTP Broadband and Mobile”, ISP Review, 2016.

[77] “A Chief Digital Officer for all Londoners”, London First, 2016

[78] “Business rate increases will hurt UK broadband sector, says industry”, Alex Scroxton, Computer Weekly, 2016ne 2014