Hard to read between lines, but it would appear that, as with any commercial Telco they have a budget they now wish to stick to. Having gone over anticipated £670 per premise in other areas.. (ie actual cost was more than projected cost) they are taking a more cautious approach in urban areas.
I should imagine they may well do some coverage in Northumberland and not rule it out completely, but it sounds like they are now being a lot more cautious after having had fingers burnt and not getting projected ROI in some of the more remote areas. They could well be angling for a subsidy, but a lot of councils are themselves stretched for funding.