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Ofcom Funding for the year 1 April 2008 to 31 March 2009

2008/09 Budget and 2007/08 Outturn

1.1 Ofcom’s work programme for 2008/09 is set out in its Annual Plan. The draft for consultation was published on 11 December 2007 and the final version of the Annual Plan will be published on 3 April 2008.

1.2 On a like-for-like basis, Ofcom’s budget for 2008/09 will be £133.7m, which is 1.5% lower in real terms than its budget for 2007/08. This is the fourth consecutive real terms reduction in Ofcom’s budget and 17.5% lower in real terms than Ofcom’s original full –year budget set in 2004/05.

1.3 Ofcom is confident that, following several years of major efficiency improvements and initiatives, the organization now operates with greater stable budgetary requirements.

1.4 The £133.7m operating budget is reflective of anticipated RPI increases and the rescheduling of some projects from 2007/08. The budget is based on an adjusted cash basis, which includes capital expenditure and actual contributions to pension schemes, but excludes depreciation.

1.5 To cover the cost of establishing the organization Ofcom received a £52.3m loan from the Government. The set-up costs were incurred during the period March 2003 to January 2004. During the financial year 2007/08 Ofcom completed the repayment of the loan, together with the accumulated interest. Therefore, from 2008/09 onwards the loan will no longer be recouped through regulatory fees from stakeholders.

1.6 Greater efficiency savings and rescheduling of some projects means that Ofcom expects to complete its work for 2007/08 at £129.8m, £0.4m under budget. The underspend will be remitted back to industry – in line with Sections 38 and 347 of the Communications Act 2003 – in the form of reduction in regulatory fees for 2008/09.

1.7 However, some stakeholders will experience an increase in their regulatory fees for 2008/09 compared to the previous financial year due to a higher allocation of work planned for that sector.

1.8 Sector regulatory fees will specifically change by:

• an average decrease of (6.3%) for the radio sector;
• an average decrease of (2.4%) for the television sector; and
• an average increase of 4.1% for network and services operators.

Comparison of 2007/08 Planned Costs with those for 2008/09

Table 1: Ofcom Costs

1.9 The analysis in Annex 1 sets out in tabular form the planned expenditure and fees and charges for 2008/09 by sector.

Allocation of 2008/09 Costs across Sectors

1.10 The allocation of costs is determined in accordance with the methodology described in the Statement of Charging Principles published on 8 February 2005. The use of Relevant Turnover in determining the fees and charges, as specified by the Statement of Charging Principles, means that actual costs for some individual licensees will vary from the sector average.

1.11 These 2008/09 Tariff Tables set out the payments due by sector, but do not include details broken down by licensee; these will remain confidential to the companies should Ofcom consider them to be commercially sensitive.

• Ofcom's Tariff Table 2008/9 [pdf]
  Full print version

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