"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."
Amyas Morse, head of the National Audit Office, 10
November 2010
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.
Publication details:
HC: 490, 2010-2011
ISBN: 9780102965520