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How Corbyn got his broadband nationalisation numbers wrong – by a factor of three

How Corbyn got his broadband nationalisation numbers wrong – by a factor of three
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John McDonnell today explained that the broadband nationalisation plans are perfectly affordable – upkeep costs would just be £230m a year. This was based on a report from the National Infrastructure Commission. It compared going for full fibre (the bars in blue, below) with incremental upgrades of the copper system (orange, below) and gave a £6.9bn cost of operating full fibre over 30 years, so £6.9bn divided by 30 makes £230 million. Simples! Or is it?

The sharp-eyed Sam Taylor spotted in the footnotes that £6.9bn is really a discounted cash flow figure. So dividing £6.9bn by 30 to arrive at an annual operating cost estimate of £230m “is therefore a catastrophic spreadsheet error. Or more accurately, the error is the failure to even use a spreadsheet”. When the sums are done properly, the annual operating costs of running a British Broadband Corporation would be an almighty £690m. So, as Taylor puts it, “McDonnell and his advisors are out by a factor of 3, because they don’t know how to use a spreadsheet. Staggering.”

Maybe they asked Diane Abbott to do the costings...

Written bySteerpike

Steerpike is The Spectator's gossip columnist, serving up the latest tittle tattle from Westminster and beyond. Email tips to steerpike@spectator.co.uk.

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