Tariff Table 2010/11

Ofcom Funding for the year 1 April 2010 to 31 March 2011

Review of 2010/11 budget, 2009/10 Outturn and 2010/11 cost allocation

2010/11 Budget and 2009/10 Outturn

1.1 Ofcom’s work programme for 2010/11 is set out in its Annual Plan. The draft for consultation was published on 9 December 2009 and the final version of the Annual Plan was published on 31 March 2010.

1.2 Ofcom’s budget for 2010/11 will be £142.5m. This includes funding for a number of new responsibilities required by government, and also deficit repair payments to the pension schemes of the legacy regulators that Ofcom was required to take on by Parliament.

1.3 Excluding the additional items, Ofcom’s core operating budget for 2010/11 is £127.5m. On a like-for-like basis, as shown in Table 1, this is 3.6% lower in real terms than its budget for 2009/10 with further planned operational efficiency savings relating to property, IT services and procurement.

Table 1: Comparison of like-for-like budgeted costs

* RPI of 2.4% as at December 2009 when budget was being set

1.4 In creating Ofcom, Parliament decided that it should inherit the pension fund liabilities of the five regulators it succeeded. Ofcom’s budget for 2010/11 therefore includes a provision for payments into the Ofcom pension schemes in the form of deficit repair payments. These arise following the revaluation of assets and liabilities in the schemes in line with other organisations.

1.5 A further operational and financial challenge in the last two years has been the increased number of appeals, litigation and disputes brought by some stakeholders, mainly telecoms operators.

1.6 The new responsibilities include: leading the Consortium for the Promotion of Digital Participation; planning the UK’s spectrum requirements for the London 2012 Olympic and Paralympic Games; and potential work on peer-to-peer internet file sharing, subject to the provisions in the Digital Economy Bill becoming law.

1.7 The £142.5m budget is reflective of anticipated RPI increases and the work programme for 2010/11 as set out in the Annual Plan. The budget is based on an adjusted cash basis, which includes capital expenditure and actual payments in respect of the pension schemes, but excludes depreciation.

1.8 In addition to the like-for-like budget reduction, Ofcom has made additional savings against its budget in the year to 31 March 2010. This is as a result of a pay freeze across the organisation, significant procurement savings, savings through property management, improved efficiencies as a result of a project to integrate Ofcom’s IT systems and the decision by government not to progress with merging Postcomm into Ofcom. In line with Sections 38 and 347 of the Communications Act 2003, these savings will be passed back to stakeholders through their regulatory fees in 2010/11.

1.9 Sector fees will specifically change by:

• an average decrease of 0.8% (3.1% real terms decrease*) for the TV sector;
• an average increase of 1.3% (1.1% real terms decrease*) for the radio sector; and
• an average increase of 19.8% (17.0% real terms increase*) for network and service operators.

*Based on a RPI of 2.4% as at December 2009 when budget was being set

1.10 The analysis in Annex 1 sets out in tabular form the planned expenditure, fees and charges for 2010/11 by sector.

Allocation of 2010/11 costs across sectors

1.11 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.

1.12 These 2010/11 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 Tables 2010/11 [pdf]
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Tablau Tariff Ofcom 2010/11 [pdf]
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