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20|07|06

Ofcom publishes Annual Report for 2005/6

Update on CEO transition and recruitment

Ofcom today published its Annual Report and Accounts for the period 1 April 2005 to 31 March 2006. In 2005/6 Ofcom completed its strategic reviews of telecommunications and radio, having concluded its strategic reviews of television public service broadcasting and of radio spectrum the previous year. During the period under review, Ofcom’s focus moved on to delivery against the main challenges identified in those reviews.

In telecommunications, Ofcom agreed legally-binding Undertakings with BT Group plc to stimulate greater and more sustainable competition leading to lower prices, better value and greater innovation. Ofcom also took action to protect consumers against a range of abuses and poor practices, including mis-selling, ineffective complaints handling and nuisance phone calls.

In spectrum, Ofcom embarked on a programme to release up to 400 MHz of prime spectrum to the market, took steps to promote digital switchover in television and began work to assess how the spectrum that will be made available through digital switchover might be most effectively re-used. Ofcom also continued its extensive programme of deregulation in spectrum licensing, reducing the regulatory burden on more than 120,000 individuals and businesses.

In broadcasting, Ofcom published the new Broadcasting Code - a single, simplified framework of rules and principles for broadcasters; and committed to increase DAB radio services, both locally and nationally.

Internationally, Ofcom played a significant role in the European Regulators Group (ERG) with the appointment in January 2006 of Ofcom Senior Partner Kip Meek as ERG Chairman. During the period under review Ofcom engaged in three key international issues: the review of the EU Regulatory Framework for Electronic Communications; European policies on spectrum management; and the proposed new EU Audiovisual Media Services Directive.

Deregulation

A commitment to reducing the regulatory burden on stakeholders underpins all of Ofcom’s work. The Annual Report highlights 16 key areas where Ofcom has taken substantial steps to remove, reduce or simplify regulation. Ofcom also published its own Simplification Plan, which sets out its approach to regulation and highlights planned deregulatory activities.

Reducing costs and improving efficiency

In 2005/6 Ofcom reduced its operating budget to £133m – 8 per cent lower than its 2004/5 budget in real terms. Its operating budget for 2006/7 is 5 per cent lower than the previous year and 12.6 per cent lower than the operating budget for 2004/5. Shortly after the period under review, the National Audit Office published its report on Ofcom's establishment and the extent to which this had delivered the expected benefits. The report stated that “the early evidence is that Ofcom’s creation has been successful”.

Chief Executive – transition and recruitment

The Ofcom Board also announced today that the recruitment of a new Chief Executive Officer was progressing well and the short listing process will begin later this month. The Board intends to complete the appointment process during October.

At the end of July, formal Accountable Officer responsibility for the organisation will pass from the Chief Executive Stephen Carter to Ofcom Chairman David Currie. David Currie will thereafter act as Executive Chairman – chairing the Board, Executive Committee and Policy Executive – until such time as the new CEO is appointed and in post.

Stephen Carter had originally intended to stand down in the autumn. However, given that the CEO transition process has progressed effectively, including a seamless handover of both formal accountability as well as executive management responsibilities, the Board has agreed that Stephen Carter will leave Ofcom at the end of this month and, barring informal guidance on operational matters and succession briefings as requested by the Executive Chairman, will play no further role in the organisation beyond that point.

Ofcom Chairman David Currie said: “In 2005/6 we set out to deliver on our commitments to increase choice and value for the consumer and to reduce the regulatory burden for industry. The Board believes Ofcom has met those commitments.”

He added: “On behalf of the Board I would also like to pay tribute to Stephen’s outstanding leadership and thank him for everything he has achieved at Ofcom.”

Ofcom Chief Executive Stephen Carter said: “As the Annual Report hopefully demonstrates, Ofcom is in good shape and in good hands.”

He added: “I am particularly pleased by the dramatic and striking developments in the broadband market, stimulated and supported by Ofcom’s policies over the last three years.”

The Report and Accounts were audited by the National Audit Office and laid before Parliament this morning. A copy of the Ofcom Annual Report 2005/6 can be downloaded at: http://www.ofcom.org.uk/about/accoun/reports_plans/annrep0506/

Ends.

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