Ofcom's value unclear, says Public Accounts Committee

It is impossible to say whether the national communications regulator, Ofcom, delivers value for money, say MPs.

It is impossible to say whether the national communications regulator, Ofcom, delivers value for money, say MPs.

A public spending watchdog found that Ofcom said what it planned to do each year, but not what it aimed to achieve, nor how it would measure success. "This makes it impossible to assess whether Ofcom is delivering value for money," the MPs said.

The Public Accounts Committee (PAC) found Ofcom's staff bill of £62m (against total operating expenses of £122m) had risen 34% despite headcount dropping 19% since 2002/3. The average salary at the regulator was now almost £72,000, MPs said.

According to its latest annual report the 10-member Ofcom executive committee took home just under £2m, with executive director Ed Richardson pocketing £381,713, down from £392,056 the year before.

The nine members of the content board shared £364,806, while the eight directors and former directors on the main board shared £476,336.

"Ofcom needs to do more to demonstrate its focus on value for money and to allow the taxpayers and companies that fund its activities to assess its performance," the MPs said.

The PAC said in most cases the communications market worked well. "Consumers enjoy the benefits of competition, such as choice and low prices for a range of products and services," it said.

However, the FTTH Council, which collects statistics on fibre to the home installations, found that the UK has less than 1% of homes connected to the internet with optical fibre. This is way behind many developing European countries, according to figures it released a week ago (see graph below).

FTTH countries, FTTH, graph

Fibre to the home is seen as the way to meet the European Union's target of all households having 30Mbps access and half having 100Mbps or more by 2020.

The PAC found Ofcom could also do more to tackle persistent problems such as the number of silent calls, relatively low levels of switching between telecoms providers and limited competition in fixed line telephony.

Ofcom was formed in 2003 from the merger of five previous regulators. Its operating expenditure in 2009-10 was £122m. This was funded through broadcast licence fees and charges, and grant-in-aid from two government departments: the Department for Business, Innovation and Skills (£75.7m in 2009-10); and the Department for Culture, Media and Sport (£0.6m).

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