Small businesses up and down the country have benefited from the governments Broadband Connection Voucher scheme, with SMEs gaining on average £1,300 a year in profit through the initiative.
Getting SMEs connected
Set up in December 2013 under the coalition government, the scheme is committed to helping smaller firms get connected to the internet and in-turn improving its digital skills. Each successful business that applied for the vouchers received up to £3,000 towards broadband installation costs.
From April 2015, the scheme was funded by a £40m Government challenge fund, but is now closed until further notice. During the initiative’s lifetime, a number of professions have been able to gain faster broadband, including architects, estate agents, mechanics, events coordinators, cafes, graphic designers and caterers.
This comes as great news for the SME community. In March, SME Insider reported that over a million small businesses lack basic digital skills, a figure which is largely down to slow and unreliable broadband speeds.
The 2015 Lloyds Bank UK Business Digital Index, which tracks digital adoption among small to medium sized businesses (SMEs) and charities, found that smaller to medium-sized UK businesses (SMEs) are seeing the benefits of being digitally enabled, but there are still around 1.2 million that lack basic digital skills.
How do SMEs benefit from the scheme?
With a greater broadband connection, small businesses up and down the country will be able to:
- Gain greater access to new markets and communicate more efficiently with both customers and suppliers
- Able to securely backup data
- Improve customer service via greater download speeds
- Engage with customers via social media.
With the Broadband Voucher Scheme, more SMEs are becoming greater connected to the digital world, explains digital economy minister Ed Vaizey.
‘‘Our Broadband Connection Voucher Scheme has been a tremendous success. More than 55,000 small businesses across the UK have taken up the offer, many of which are already seeing significant boosts to their business as a result of improved broadband speeds,’’ said Vaizey.
‘‘We’re transforming the UK’s digital landscape, helping cities to create new jobs and attract investment to make the UK an enviable business destination.’’
London-based firms made the most out of the scheme, with over 14,500 firms gaining broadband vouchers. The North-West had the second-largest subscription rate with just over 8,000, with businesses in both Scotland and Wales accounting for just fewer than 3,000 vouchers each.
Challenging the ‘big three’ service providers
Surprisingly, the majority (86 per cent) of businesses went to smaller suppliers for their broadband, with 800 suppliers being used in total. The ‘big three’ Internet Service Providers (BT, Virgin Media and TalkTalk) accounted for only 14 per cent of the total value of the vouchers.
It’s just not SMEs that benefit from the initiative, so does the UK economy. Research has found that for every £1 the UK Government invested in the scheme, more than £5 will be returned to the UK economy.
These figures have followed last week’s announcement from Prime Minister David Cameron, who announced that the government is working towards supplying every family and small business in the UK with broadband speeds of 10mbps.