Consultation outcome

West Herefordshire and Forest of Dean (Lot 15) Public Review Closure Notice

Updated 2 August 2023

New procurement to extend coverage of gigabit-capable broadband across the West Herefordshire and Forest of Dean (Lot 15) regions.

Please note as of August 2023, the name of Lot 15 has formally changed from ‘Herefordshire’ to ‘West Herefordshire and Forest of Dean’.

1. Introduction

The government’s ambition is to deliver nationwide gigabit-capable broadband as soon as possible. We recognise that there is a need for government intervention in the parts of the country that are not commercially viable; this is why the government has committed £5 billion for the hardest to reach parts of the country, ensuring that all areas of the UK can benefit. This will be spent through a package of coordinated and mutually supportive interventions, collectively known as Project Gigabit.

We wish to work collaboratively with industry to maximise efficiency, minimise market distortion and achieve our objectives within a tight time frame. To do this, we first identified the areas that were not commercially viable through the Open Market Review (OMR) and Public Review (PR) stages. This allowed us to understand from suppliers if there were any current or planned investment over the next three years in broadband infrastructure (Next Generation Access broadband, ultrafast and gigabit-capable) in the identified geography. For this Lot, the identified geography lay within the Herefordshire region.

The flowchart below shows the order of stages, from OMR to procurement.

1. OMR

2. Public Review

3. Determine intervention areas for procurement

4. Procurement

Through these stages, BDUK classifies premises as eligible/ineligible for subsidy on the basis of their existing or planned qualifying broadband infrastructure. Details on the classification system of White, Grey, Black and Under Review and methodology can be found in section 3.2 BDUK Classifications and methodology for this PR.

Premises categorised as White by BDUK during OMRs and PRs (ie eligible for subsidy) are grouped into Intervention Areas (IAs). IAs list those premises that will be targeted for subsidy in any potential procurement to follow this PR. To be clear, not all eligible premises may have been targeted for subsidy. The finalised IA will be issued to the market at the Invitation to Tender (ITT) stage of procurement so that suppliers can bid for subsidy to support delivery to this IA.

Further information on the OMR/PR process and how we reach our conclusions can be found in the Subsidy Control Guidance document.

2. Outcome of the preceding Open Market Review

Preceding the current PR stage, BDUK conducted an OMR for Herefordshire (Lot 15) from 6 April to 6 May 2022. This OMR requested information from suppliers regarding current and planned broadband infrastructure within the next three years.

All meaningful responses to the OMR were considered and where necessary used to determine eligible premises. Suppliers who responded to the OMR were informed of the classifications applied to the existing and planned infrastructure relevant to their submission.

The key findings of the OMR are presented in the postcode-level map showing eligible premises identified through the OMR for Herefordshire, and a list of eligible postcodes can be found on our website.

3. Outcome of the Public Review

3.1 Background

The PR for Herefordshire (Lot 15) ran from 5 September to 5 October 2022. During the PR, BDUK invited stakeholders (including broadband infrastructure operators, internet service providers, the public and businesses) to provide feedback regarding which areas were made up of eligible premises.

Furthermore, BDUK carried out market engagement to seek feedback from suppliers on IA and Lot design, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The PR stage aimed to validate the outcome of the preceding OMR to ensure that it correctly represented the information provided by suppliers over the course of the OMR.

Suppliers who missed contributing to the preceding OMR, had no definitive plans and/or evidence base on which to substantiate claims at that earlier stage, or had subsequently updated their plans had a final opportunity to notify BDUK before final determinations were made on premises eligibility. All meaningful responses were carefully considered and where necessary utilised to determine eligible premises. BDUK also sought feedback from Herefordshire and Gloucestershire County Councils. The finalised postcode-level map showing eligible premises is shown in Annex A of this PR Closure Notice. See Postcode-level map.

A finalised list of postcodes showing White, Grey, Black and Under Review PR outcome has been published. A list of eligible (White/Under Review) premises is also available to suppliers upon request.

The proposed IA shown in Annex B has been submitted to BDUK’s National Competence Centre and obtained approval to proceed. The finalised IA will be available to bidders at the forthcoming ITT stage.

Changes to the Lot area

Please note, Lot areas are not fully aligned to Local Authority boundaries. Specific Lot boundaries (and IAs) may flex during the OMR, PR and Pre-Procurement Market Engagement (PPME) processes to enable an optimum procurement to be put to the market.

Since the PR closed on 5 October 2022, there have been changes made to the proposed Lot Boundary Area. These changes are consistent with the revised Lot Boundary Area shown in this document in Annex B which includes the IA referred to as West Herefordshire and Forest of Dean, a type A local supplier contract.

Please note, along with changes to Lot Boundaries, as of August 2023, the name of Lot 15 has also formally changed from ‘Herefordshire’ to ‘West Herefordshire and Forest of Dean’.

To be clear, the changes made during the PR to the Lot Boundary Area are as follows:

• The parliamentary constituency areas of Forest of Dean and Tewkesbury were added to the Lot Boundary Area as it was shown in the map at the start of PR launch.

• The parliamentary constituency area of North Herefordshire was removed from the Lot Boundary Area as it was shown in the map at the start of PR launch.

• At PPME, Welsh premises that were connected to exchanges in England were included in the PR for Herefordshire (Lot 15). These premises were removed from the Lot Boundary as it was shown in the map following the closure of the PR.

Following the PRs undertaken for Herefordshire (Lot 15) and Gloucestershire (Lot 18) in October 2022, BDUK went out to the market to share a combined view of Herefordshire (Lot 15) and Gloucestershire (Lot 18) IAs in January 2023.

As part of the market engagement for tenders within the Gigabit Infrastructure Subsidy scheme, BDUK engaged suppliers in a Soft Market Testing (SMT) exercise for both of these Lots simultaneously to obtain market feedback on a proposed cross-boundary IA.

During the SMT exercise, BDUK received positive indications of interest in separate standalone type A local supplier contract procurements for these Lots, rather than a single combined cross-boundary type B regional supplier contract.

During the months from February to May 2023, BDUK proceeded to conduct further market engagement with a PPME exercise by consulting on three type A local supplier contracts which included IAs located in North Herefordshire, East Gloucestershire and West Herefordshire and Forest of Dean.

As a result of the findings from these exercises, BDUK has decided to progress with two separate type A local supplier contracts across these regions now referred to as West Herefordshire and Forest of Dean (Lot 15) and East Gloucestershire (Lot 18).

The PR for Gloucestershire (Lot 18) was carried out in parallel with the PR for Herefordshire (Lot 15) and details on the outcome of this exercise can be found in the Gloucestershire (Lot 18) PR Closure Notice published March 2023.

To summarise, the reasoning for the changes highlighted above and the decision to proceed with two separate local supplier contracts for West Herefordshire and Forest of Dean (Lot 15) and East Gloucestershire (Lot 18) were due to limited interest in our initial proposed cross-boundary IA based on market feedback from suppliers. This approach is in line with our wider strategy of focussing on smaller procurements where no market interest is indicated.

The IA for West Herefordshire and Forest of Dean (Lot 15) is now a single local supplier contract covering premises in the constituency areas of Hereford and South Herefordshire, part of West Worcestershire, Forest of Dean and Tewkesbury.

3.2 BDUK Classifications and methodology for this PR

During the PR, BDUK categorised premises as Gigabit White, Grey, Black or Under Review.

Subsidy control classifications are set out below:

• White - indicates premises with no gigabit network infrastructure and none is likely to be developed within 3 years^{[footnote 1]}

• Grey - indicates premises where a single qualifying gigabit infrastructure from a single supplier is available, or is to be deployed within the coming 3 years^{[footnote 1]}

• Black - indicates premises with two or more qualifying gigabit infrastructures from different suppliers being available, or will be deployed within the coming 3 years^{[footnote 1]}

• Under Review - indicates premises where suppliers have reported current or planned commercial broadband coverage, but where claimed current gigabit coverage has not been verified, or, in respect of planned build, where evaluators are confident that gigabit infrastructure will be delivered, but some risks to delivery remain, or there are some gaps in evidence

BDUK will only provide subsidy to target premises that have been designated as White. Premises which have been designated as Under Review may be included within the Deferred Scope of a procurement. Where this is the case, a further review will be undertaken to confirm whether they are Grey or White before they are released for build.

In accordance with the OMR/PR processes, supplier data submitted during the OMR and PR has been mapped using a methodology that protects commercially sensitive supplier data. To reflect this sensitivity, we will only release White and Under Review Unique Property Reference Numbers (UPRNs).

3.3 Summary of PR findings - premises eligibility

For presentational purposes only, postcode-level mapping has been used to present the map showing eligible premises (NB we will only subsidise build to premises which have been designated as White - postcodes are not used to determine IAs for subsidy).

For this purpose, postcodes have been classified as follows:

1. A postcode is White if any White premises are present.

2. A postcode is Under Review if any Under Review premises are present.

3. A postcode is Black if all premises in the postcode are classified Black.

4. A postcode is Grey if all premises are Grey, or a mixture of Grey and Black.

A postcode-level map summarising these premises classifications is provided in Annex A. Suppliers - please note that this map does not show which UPRNs have been determined as White and Under Review.

The outcome of the PR is summarised in terms of White, Grey, Black and Under Review postcodes and premises below:

Postcode Classification	Number of Postcodes	Number of Gigabit Black Premises	Number of Gigabit Grey Premises	Number of Gigabit Under Review Premises	Number of Gigabit White Premises
White	3,116	1,496	17,350	6,795	20,906
Under Review	1,517	311	5,611	16,826	0
Grey	3,288	3,144	47,478	0	0
Black	304	5,443	0	0	0
Total	8,225	10,394	70,439	23,621	20,906

3.4 Forthcoming procurement

During the PR stage for Herefordshire (Lot 15), BDUK sought responses from the market and other stakeholders to validate the Annex A Subsidy Control map (showing Gigabit White, Grey, Black and Under Review determinations).

BDUK also carried out market engagement to seek feedback from suppliers on IA and Lot design, the procurement type (A - local supplier, B - regional supplier or C - cross-regional supplier) and also the capacity of the market to bid for a potential procurement.

The total public funding investment has been based on the final number of premises requiring subsidy. BDUK will confirm a budget drawn from public funding for this area within the forthcoming tender documentation. Details of any restrictions on the use of public subsidy will be explained within the tender documentation.

Indicative funding allocated for this West Herefordshire and Forest of Dean (Lot 15) procurement is as follows:

• Type A - Total of 7,993 UPRNs approximately £23,439,473

The procurement type selected for West Herefordshire and Forest of Dean (Lot 15), following engagement with market and other stakeholders, is anticipated to be a single type A local supplier contract. A premises-level map detailing the proposed IA can be found in Annex B.

There is no Deferred Scope included within our local supplier contracts which only contain premises that are included in the Initial Scope where the supplier should build as quickly as possible; local supplier procurements will never include Under Review premises in their Scope.

This procurement was designed utilising data from the PR conducted in Herefordshire mentioned above and supplemented with information derived from the recent January 2023 National Rolling Open Market Review (NR OMR) undertaken by BDUK.

As of January 2022, BDUK has been asking suppliers delivering gigabit-capable infrastructure to submit national data returns on a 4-monthly basis (January, May and September) to provide detailed build plans at premises level. The purpose of the NR OMR is to ensure that BDUK has the most up to date information about suppliers’ existing and planned commercial build with supplier submissions being used to inform eligibility across Project Gigabit.

Following the completion of the evaluation process of responses received from suppliers to the January 2023 NR OMR, the subsequent subsidy control classification results were overlaid and used by BDUK in the design of this type A local supplier contract. Further information can be found within the January 2023 NR OMR Closure Notice published 14 June 2023.

BDUK is confident that integrating these NR OMR findings will ensure the best possible outcome for this IA, maximising both coverage and value for money accordingly. Our interventions will always flex to respond to both changes in the dynamic marketplace, and the appetite for our procurements. Further information on the NR OMR process can be found in the Subsidy Control Guidance document.

West Herefordshire and Forest of Dean’s (Lot 15) forthcoming procurement will be carried out in accordance with the Public Contracts Regulations 2015 (PCR2015). BDUK procurement approaches are designed to address the scale of the individual procurements. West Herefordshire and Forest of Dean’s (Lot 15) procurement will be conducted in a transparent and non-discriminatory manner.

The Authority, BDUK, reserves the right to amend or withdraw the procedure for the competitive sourcing process at any time.  Any amendments will be done in line with the Procurement Regulations.

Suppliers acknowledge and accept that by issuing this document (PR Closure Notice) BDUK shall not be bound to progress or conclude any related procurement activity.

Under no circumstances shall the Authority incur any liability in respect of the information contained in this Closure Notice or any supporting documentation.

Timescales

The following table summarises the indicative timescales for the procurement:

Activity	Date
Procurement start date (ITT Launch)	1 August 2023
Estimated contract award date	January to March 2024

See Project Gigabit procurement timelines for more information.

3.5 Summary of PR findings

• There are 20,906 White premises (out of 125,360) where the market does not intend to build, indicating there is strong commitment from active suppliers in Herefordshire to reach a large proportion of premises in the county.

• The IA was designed to address areas outside of where we expect the commercial sector to build to, prioritising footprints where there is an appetite for BDUK to go further, faster.

• We contacted all known national and local suppliers to ask them to respond to the OMR and PR releases. This included working closely with Fastershire Broadband Project, on behalf of Herefordshire County Council to ensure active and prospective suppliers were aware of the OMR and PR releases and could feed in their responses.

4. Conclusion

A key output for the OMR/PR for Herefordshire (Lot 15) is the map showing premises that are eligible for subsidy. Annex A sets out this map at postcode level.

From this map, BDUK developed the IA which was proposed to the market during the PPME phase. Annex B sets out the draft IA map at UPRN level.

This identifies the areas where premises are eligible for subsidy. A full list of White and Under Review UPRNs is available on request to suppliers via ukgigabit@BDUK.Zendesk.com.

Suppliers and other interested stakeholders (including businesses) wishing to submit final comments as a result of the changes made to the Lot Boundaries as described in this PR Closure Notice update for West Herefordshire and Forest of Dean (Lot 15) are encouraged to send in feedback via bduksuppliers@dcms.gov.uk with the subject ‘Lot 15 - PR Closure Notice Update’.

Comments should be received no later than 2 September 2023.

5. Annex A – Map indicating locations of eligible premises

The postcode level map below indicates areas where those premises eligible for subsidy are located ie White areas. These eligible premises may be included within the IA.

Black, Grey and Blue (Under Review) areas indicate where those premises ineligible for subsidy are located.

Herefordshire (Lot 15) Postcode level map (showing subsidy control classifications at a postcode level)

6. Annex B – Map of Proposed Intervention Area

The map below highlights the IA that was approved following completion of the PPME exercise.

West Herefordshire and Forest of Dean (Lot 15) Type A Intervention Area Map

Please see section 3 above for information on BDUK’s findings, contextualising how eligible premises were included in the proposed IA.

The above premises-level map indicates eligible premises that form the proposed type A procurement.

All of the premises that are targeted for subsidy (a total of 7,993 premises) are highlighted in orange and are referred to as the Initial Scope.

This map is accompanied by a list of UPRNs that fall within the IA, clearly demarcating which premises are within the Initial Scope which suppliers can request via Atamis. If you are unable to access Atamis, please contact the Supplier Mailbox bduksuppliers@dcms.gov.uk.

1. There may be occasions where credible plans extend beyond a 3-year period, in that case, these may be taken into account. ↩ ↩² ↩³