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Press Release - Ofcom: The effectiveness of converged regulation
Ofcom is doing more with less and, over the last five years, has saved some £23 million, according to a report published today by the National Audit Office. However, it is not possible to conclude on the extent to which Ofcom is delivering optimal value for the resources it uses. This is because, with its complex remit across the telecommunications sector, it needs a better articulation of the intended outcomes of its activities and how its work achieves those outcomes.
Taking into account the expansion of its remit and inflation, Ofcom, the independent regulator and competition authority for the UK communications sector, costs around 27 per cent less in real terms (around £3 million per year more in cash terms) to run than its predecessors. Since 2003, Ofcom has made efficiency savings of approximately £23 million, through the rationalization of its estate and operations and through implementing a pay-freeze. In addition, Ofcom spends over £70 million managing the radio spectrum, which generates income for the Government of about £200 million per year. However, it could do more to demonstrate the extent to which value for money is being obtained from its spectrum management activities.
Analysis by the NAO suggests that there are many positive outcomes in the communications market: for example, prices have fallen and there is better choice and quality. Ofcom's research shows that customer satisfaction is generally high. However, there are still areas where improvements could be made. Three of the goods and services most complained about to the consumer helpline Consumer Direct are communications products (mobile phone service agreements, telephone landlines and internet service providers).
Most of Ofcom's stakeholders feel that it conducts its consultations well, but 44 per cent of those the NAO surveyed felt that Ofcom does not go on to act in a timely manner. The frequency of appeals against Ofcom's regulatory decisions is an increasing challenge and they have cost Ofcom over £1 million per year since 2007-08.
Amyas Morse, head of the National Audit Office, said today:
"Ofcom has reduced its overall expenditure each year since its creation and we have seen many positive indicators in communications markets. In order to demonstrate that it is delivering value for money, however, Ofcom should demonstrate sharper objectives and metrics to better link its costs with the outcomes it achieves."
Notes for Editors
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The Office of Communications (Ofcom) is the independent regulator and competition authority for the United Kingdom communications sector, which includes broadcasting, telecommunications and wireless communications.
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Ofcom was created in 2003 as the result of the merger of five regulators. It is funded through licence fees and charges from regulated companies and users of the radio spectrum (£56.5m in 2009-10) and through grant-in-aid from two government departments: the Department for Business, Innovation and Skills (£75.7 million primarily for spectrum management) and the Department for Culture, Media and Sport (£600,000 for media literacy work).
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Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
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The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
Press Notice 56/10
All enquiries to Phil Groves, NAO Press Office: Tel: 020 7798 5339
