NEWCASTLE City Council and Gateshead Council have terminated a contract they signed with GOWEX to provide free Wi-Fi hotspots in the area.
The contract was signed as part of the government-funded Go Digital Newcastle project, which is bringing superfast broadband to the city as well as providing Wi-Fi availability in public locations.
The councils signed the contract for the Wi-Fi element of the initiative in May, but GOWEX hit difficulties in July following alleged irregularities with its accounts.
A new Wi-Fi provider is now being sought.
Cllr Michael Johnson, Newcastle City Council Deputy Cabinet Member for Skills, Business and Enterprise, said the two local authorities had been extremely disappointed by the situation with GOWEX.
He stressed that the nature of the contract meant no money was paid to the Spanish company and there were no financial implications for either council.
“GOWEX – which had a strong record for providing Wi-Fi in cities around the world – was chosen after a most rigorous selection procedure, but its financial difficulties could not have been foreseen,” he said.
“However, while this has caused our Wi-Fi plans a setback in time, we are now working to select a new provider who can fulfil our stringent conditions.
“Providing people in Newcastle and Gateshead with free public Wi-Fi will help in our campaign to become one of the best-connected areas in the UK.
“Go Digital Newcastle is making superfast broadband available across the city, which will bring huge boosts to businesses, helping them reach their customers more effectively, and to residents.”
Cllr Mary Foy, Gateshead Council’s Cabinet Member for Economy added: “While we are disappointed that this unforeseen development has happened, we are totally committed to delivering a wireless concession in Gateshead and Newcastle.
“Working with Newcastle we are doing all we can to ensure a new provider is appointed and we can then get back on track to making our area one of the best connected places in the country.”
Go Digital Newcastle is funded by Broadband Delivery UK (BDUK) and delivered by Newcastle City Council, and is designed to boost the local economy. Small and medium businesses, charities and social enterprises in Newcastle, Gateshead and North Tyneside can apply for free vouchers worth up to £3,000 towards the cost of getting their businesses connected to superfast broadband.
Newcastle businesses can also access a programme of free business support to show them how to make the most of their speedy connections.