I will talk about breaking it down into actual numbers. When we built the benefits, we assumed that certain data points were relevant. The first was the number of households about which we were talking about. It amounted to 387,000. We are talking about 100,000 businesses, of which 56,000 are farms and 44,000 are non-farms, being smaller SMEs. We are also talking about 147,000 white collar workers who live in the intervention area.
It is important to think about these numbers in the context of the benefits which I will outline. As Ms Ball said, we quantified two benefits: residential and enterprise. We looked first at residential benefits which we categorised in four key components, the first of which was remote working. We quantified that the annual savings per household would be €81; that would be the benefit of remote working. There is a study that states approximately 4% of people work from home. That is considered to be a conservative estimate in today's terms. Recent studies from the Industrial Development Agency, IDA, state that figure is up at 10% and there is an even more recent study which suggests it should be 14%. That is an example of what Ms Ball meant when she mentioned that we were being conservative. Remote working is about the savings to be gained. If I was travelling from Milltown, outside Ennis, to work in Limerick, it would be a round trip of approximately 80 kms. The savings we have calculated in that particular instance are from the points of view of fuel consumption and the time spent travelling in a car.
The next component we have quantified is what we call reduced service waiting time. We have calculated that the annual saving per household would be approximately €500. The services about which we are talking are e-government services, including applications for motor tax, driving licences, NCT tests, passport applications and even video conferences that could be undertaken instead of face to face meetings. It is based on the average time an adult spends on the Internet weekly, for which we have assumed a figure of 8.7 hours. We have assumed that 25% of that time is productive. That is how we came up with the calculation of €500 per household per annum.
The next benefit is what we call bundled communication, which is easy enough to understand. Many service providers offer a complete package that is quad play. In other words, a customer buys one package covering his or her mobile phone, TV and broadband services. There is obviously a discount in buying such a bundled package. In this case, we came up with an annual household saving of approximately €31. Again, we have tried to be conservative with that figure. We have only applied it to 19% of the people in the intervention area because we all know that everybody is slow to change and that there is inertia when it comes to these things. People in the intervention area might not be paying for a TV service.
The final benefit in residential areas is transaction savings through online shopping. We are assuming an annual saving of approximately €120 per household.
I will move on to the enterprise benefits. We looked first at farm enterprises. We are looking at the improvement in gross value added by virtue of this benefit. In the case of farm enterprises, we have assumed an amount of €492. As I said, we are talking about 56,000 farms in the intervention area. We have been conservative because we have only applied the figure to 20% of farms in the intervention area because we realise the savings about which we are talking will require some investment and will only really apply to medium and large farms. The savings about which we are talking relate to animal health in monitoring animals, calf mortality and online applications. The online applications are for e-government purposes and the savings are those that would be expected if a farm enterprise had access to high-speed broadband. Our benefits report refers to a raft of developments in farm technology and the ways in which a farm is run as a business. They are in areas such as energy efficiency, crop management, data for soil fertility and the monitoring of health and welfare of animals. We say it is at early development stage, but, more importantly, as far as farm enterprises are concerned, it is at early adoption stage. Therefore, we have not included their benefits, but one would expect significant growth in that area in the next 25 years.
The next category is non-farm enterprises. These are small and medium-sized businesses in the intervention area which employ fewer than 50 people. We have calculated a benefit of approximately €1,200 per enterprise in terms of improvement in gross value added per annum. These are the savings one would expect to make. By virtue of operating on a 24/7 basis, a business has access to more customers and can increase its revenue. Its costs are reduced because of a decrease in the cost of marketing, for example. A company that might have engaged in mail drops can now do everything electronically. There can be savings made in the area of IT through cloud computing. We expect an improvement in gross value added of approximately €1,200.
As I said, 147,000 white collar workers work outside the intervention area. They are travelling, say, from Rathdowney to Naas. There is obviously a benefit for the business in Naas where that employee can work remotely. We have used the same 4% statistic for remote working for enterprises that we have used for residences and assumed, based on a significant number of studies, that productivity can be increased by approximately 35%. That results in an improvement of just under €1,100 in gross value added for those businesses.
The final category is employment. We have assumed an uplift in gross value added for businesses of approximately 212. As Ms Ball said, we only include a benefit if there is empirical evidence that we can justify and quantify. Equally as important is that they all comply with the public spending code on what should and should not be included in a cost-benefit analysis of this nature.
I should make two final points. We have applied a displacement factor in the enterprise benefits. Effectively, it is another haircut to reduce the benefits in order to reflect the economic factors that might apply at the time.
We, again, have been conservative in our approach.