COMMENT Another lockdown has been a potent reminder that Covid-19 has accelerated the need for world-leading digital connectivity across the UK. Not only does it underpin economic growth and social inclusion, widespread home working and technology adoption today, it will be a key driver of economic recovery going forward.
The government recognises the importance of digital connectivity and has an ambitious vision for gigabit-capable connectivity to every home and business by 2025 and 5G to most of the UK by 2027.
We know that slow internet connection speeds are a key barrier to industrial digital adoption, particularly among SMEs. Cluttons’ own research found that 81% of commercial building tenants deem good connectivity to be vital for business performance. Now there is an opportunity to boost productivity and drive the Covid-19 economic recovery by delivering seamless digital connectivity to every home and business. It will help level-up regional economic growth, support flexible working and businesses to innovate thanks to access to new technologies. Digital infrastructure is now a business essential in the same way the other utilities are fundamental to our everyday lives.
Digital connectivity also has a role to play in addressing wider societal issues, such as cutting carbon emissions, by reducing the need to commute. Nationwide gigabit-capable connectivity could allow 400,000 more people to work from home, giving greater flexibility in where they live. That means hundreds of thousands more people could move to rural areas, reducing pressure on transport networks and urban housing. We have already seen signs of this shift during the pandemic, so there is a growing urgency for better digital infrastructure beyond our cities and urban areas.
Challenges ahead
There are, of course, challenges ahead.
Roll out will require significant investment, with most coming from the private sector. But the hardest-to-reach areas of the UK are commercially unviable – for rural Britain to access gigabit-capable networks it will take public investment.
The government has already committed a record £5bn. We believe a significant proportion of this should be reserved for the hardest-to-reach 20% of premises in the UK. Government can also help create the right conditions for investment in “potentially competitive” or “missing middle” areas of the UK, such as villages, business parks and small market towns.
To achieve this, government policy must positively affect the business case for investment. This includes stimulating business and consumer demand, making it easier for providers to access land and reforming telecoms business rates.
The challenge of access for operators still prevails in some instances, even when a tenant has requested the connectivity, falling short of the government’s ambition to bring telecoms operators in line with the gas, energy and water sectors by providing a “right to entry”. As part of upcoming changes to building regulations, government must also continue to look at wider access issues so that providers can deliver the gigabit connectivity that businesses and consumers need.
Increasing value
We support businesses and individuals searching for premises across the UK and help ensure those premises enhance the live/work experience – connectivity plays a crucial part. Landlords must recognise that improved connectivity and 5G will benefit them by increasing the overall value of their property assets. The commercial value of a well-connected property thanks to increased rental revenues, minimising voids and having happy tenants due to higher staff retention and the ability to work more efficiently, should not be underestimated.
We also manage infrastructure for digital infrastructure providers and mobile operators across the UK, including supporting their business rates strategies. In the spring Budget, the government announced a fundamental business rates review. Telecoms business rates reform must cover all digital infrastructure, focusing on the outcome of gigabit speeds and greater reliability. Lower business rates for providers will leave them with more capital to invest and ultimately speed up nationwide roll out of gigabit-capable connectivity and 5G.
As a nation, we have made significant strides improving the availability of gigabit-capable broadband. Providing better connectivity will help drive the UK’s economic recovery from Covid-19 because it is fundamental to economic, social and environmental progress. Having the correct policies, regulations and talent in place will mean we can accelerate progress when we need it most.
Sophy Moffat is head of research at Cluttons
