Digital region £14m loss to burden councils

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SOUTH Yorkshire’s Digital Region project has revealed £14.2 million of further losses - much of which will be paid off by local councils.

The project, which aims to provide super-fast broadband internet to 80 per cent of the county, has also reported ‘exceptional costs’ of £62.9m in the figures, which cover the 2011/12 financial year.

Digital Region Limited said the exceptional costs are a result of the accounts being prepared ahead of transfer of the network to a private operator and that they will not have to be paid by Digital Region.

Bosses at the company say they hope to have tied up a contract with a new operator within the first few months of the year.

David Cowell, chief operating officer for Digital Region, said: “Whilst these financial results appear disappointing, they are in line with the forecasts for the business so this outcome is not unexpected.

“The intention remains to select a new operator that will ensure the network delivers on its original remit of digital transformation and provide quality and value for money for South Yorkshire.”

Mr Cowell said Digital Region Limited, which is owned by South Yorkshire’s four councils and the Department for Business. Innovation and Skills, has shortlisted two companies for the transfer of its services.

Development of the broadband network run by Digital Region has been funded with £90 million of council, Government, European and private sector funding.

South Yorkshire councils are set to be asked to help cover the losses, which have increased from £9.2 million in 2011/12.

The finalised losses for 2011/12 are lower than £22m predicted initially.