British Telecom could be overcharging taxpayer hundreds of millions of pounds Mrs Hodge has sent a copy of the briefing to Amyas Morse, the head of the National Audit Office, which monitors Whitehall spending, urging him to investigate the claims. The NAO confirmed that it had received the letter. According to the document, officials at Broadband Delivery UK, a unit of the department, were told by the consultant in July that BT has to pay £11,689 to install a green broadband box "before group costs." The consultant, who had worked for the unit for two years, said that, for every broadband box, BT was charging for £17,000 in "generic" rural areas, £21,858 in "very" rural areas and £30,000 to install boxes in the most remote areas of the country. But, according to the document, these figures are based on "pseudo wholesale costs" given by BT, and not on any actual costs. Within the overall figures, BT's labour charge also jumped from £1,855 to £5,145 in generic rural areas, £7,297 in very rural areas and £10,635 in most remote areas. BT also increased its "overhead charge" from £1,317 to £3,637 in generic rural areas, £5,159 in very rural areas and £7,519 in most remote areas. The document said: "In attempting to establish a wholesale price, there has been significant inflation of costs by adding new job types and not reducing costs where these job types had already been accounted. BT's model is abstract in nature, aiming at establishing a wholesale price, and a history for the price and methodology, rather than revealing unit costs of components. It added that BT's estimates were "driven by a take-up assumption which is unrelated to the actual assets built or needed." Mrs Hodge said in her letter to the NAO: "This looks like another example of a lack of transparency by a private company providing a public service potentially allowing the taxpayer to be ripped off. Taxpayers are paying £1billion for the roll-out of high speed broadband across the UK, an essential service that people cannot do without, and it appears from this document that BT may have exploited its monopoly position.  Edward Phelps, secretary-general of the industry body Digital Policy Alliance, added: "If these allegations are true, clearly there are serious questions to answer and I urge the Government to hold a full investigation as soon as possible. But this must not add more delay to the promised roll-out of high speed broadband, which is so critical to the growth and future jobs this country desperately needs. A competitive broadband market is essential to encourage innovative solutions to reach the least commercially viable areas. Flick Rea, chairman of the Local Government Association's Culture, Tourism and Sport Board, said: "Councils regard the roll-out of high-speed broadband as vital for economic growth and are working hard to ensure their communities benefit. "However, councils also have a duty to get the most from every taxpayers" pound and want to drive hard bargains with commercial providers. Any evidence which raises concerns about value for money, particularly surrounding huge multi-million pound contracts, must be properly investigated to ensure the cost to local taxpayers is transparent and justified. Philippa Roe, leader of Westminster City Council, added: "The future for local Government is increasingly one of joint partnerships with the private sector, and for this to succeed it is vital that we have full transparency in the contracts that we sign up to. The public rightfully expect us to get value for money on their behalf, and we need to clearly demonstrate that this is the case. BT said the claims were "ludicrous." It said: "BT is winning BDUK tenders precisely because it is committing extra funds to improve broadband access in those counties. These funds are in addition to our commercial investment of £2.5 billion. It is ludicrous that some people are suggesting that we are trying to pass on the full cost of deployment to our public sector partners. In fact, we are looking at a low double digit year payback in these areas even when the public funds are taken into account. A spokesman for the Department for Culture, Media and Sport added: "We do not comment on allegedly leaked documents. We are committed to achieving value for money for all Government spending.