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£100m Yorkshire public broadband scheme needs £10m taxpayer loan to stay afloat

A pioneering South Yorkshire superfast broadband project is being bailed out with a £10m taxpayer loan while it looks for a private-sector partner.

T'other Yorkshire broadbandDigital Region was set up in 2008 by four local councils and the government with £100m to provide superfast broadband for up to 80 per cent of the area’s homes and businesses.

In 2011 it made just £167,000, but cost £9.2m to run, with funds running short after years of building fibre-to-the cabinet services over BT’s network.

Sheffield, Doncaster, Rotherham and Barnsley councils expected Digital Region to start making sizeable profits after it launched in 2010.

The Yorkshire Post reports: “None of the four South Yorkshire councils or the Government were prepared to discuss the stark financial picture. Only Doncaster Council has produced a report which provides any indication of Digital Region’s future.”

The biggest investor is the Department for Business, Innovation and Skills (BIS) which took over from the regional development agency, Yorkshire Forward, which was axed earlier this year.

Now the councils and government are hoping the £10m loan guarantee will help Digital Region keep going until they can tempt a private partner such as BT or Virgin to take on its customers with some public funding.

The alternative is to let Digital Region close down and see its customers left with no broadband service.

The 350-mile fibre optic network took more than two years to build, and reached 1.3 million people, 546,000 homes and 40,000 businesses.

Digital Region’s website was not available today, but we were able to find a basic copy in Google’s cache.

Image: Yellow Book/Flickr