National Audit Office investigates 4G shortfall

  • Getty Images

We’ve all done it. Facing a daunting stack of bills, we have consoled ourselves with the thought that a big cheque is in the post that should cover those debts. Of course the cheque never turns out to be quite as big as we had hoped.

That was Chancellor George Osborne’s experience with the auction of the 4G mobile phone network. Osborne, a glass half-full (of vintage port) person, had told the nation that we were due a windfall of £3.5 billion from selling the rights to the airwaves. Instead, when the auction occurred last June, it raised just £2.3 billion, substantially short of his estimate and £3 billion short of the theoretical maximum. It was the Exchequer’s equivalent of putting a DVD on ebay with starting bids of 99p . . . and having to sell it for 99p.

The shortfall was so significant and so damaging to the nation’s budget that the National Audit Office is investigating the auction process. The NAO's auditor general, Amyas Morse, said: "I intend to conduct a value-for-money study of Ofcom's recent auction of the 4G spectrum."

This was in response to concern from told the Labour MP Helen Goodman, the shadow minister for media and communications, who blames the government. "By not making maximising the auction's revenues an objective for Ofcom, the government has failed to get value for money on this project," she argued.

"Serious questions must be answered as to why the Conservative-led government ended up £1bn short of the estimate George Osborne had provided just months earlier," Goodman added. She pointed out that, under Labour, the 3G auction had been more successful, raising £22.5 billion in April 2000.

The auction process was unsatisfactory to many bidders, although Vodafone emerged with some success, increasing its share of the UK mobile spectrum from 23 percent to 28 percent.

United Kingdom - Excite Network Copyright ©1995 - 2022