Home > Radio > Information about stations and licensing > Radio Broadcast Licensing > Community Radio > Annual Report on the Sector

Executive Summary

1.1 Community radio stations are a new type of not-for-profit radio service, designed to operate on a small-scale and to deliver social gain to one or more communities. The legislation to enable community radio services to be licensed was introduced in 2004, and the first station launched in November 2005.

1.2 Ofcom has now licensed 191 stations over two rounds of licensing. 131 of these are now broadcasting, nine have either decided not to launch or have handed their licence back and the remainder are preparing to start broadcasting. The second round of licensing is ongoing - Ofcom is currently considering 43 applications from the southeast of England (excluding London and other areas within the M25) and will shortly invite applications from groups based within London or other areas inside the M25.

1.3 Community radio serves a wide range of communities; the majority serve a general audience in either an urban area (18%) or a town / rural area (41%). However, many others serve smaller communities of interest including those aimed at minority ethnic groups (14%), young people (9%) and religious groups (7%). 148 of the stations awarded a licence are in England, 14 in Northern Ireland, 20 in Scotland and nine in Wales.

1.4 The legislation governing community radio sets out the characteristics of community radio services and defines social gain. Each station has a set of ‘key commitments’ which forms part of its licence and details how the station will meet these characteristics and deliver social gain, including for example its core aims and commitments in respect of training, access and accountability.

1.5 The legislation also puts a limit on the amount of income that can be generated from on-air advertising and sponsorship. For most stations this limit is 50%; however, two stations have a lower limit (25% and 15%) and a further 16 stations are not allowed to receive any income of this type. The additional restrictions are in order to protect commercial services with whose coverage areas the community services overlap.

1.6 Each community radio station that has been broadcasting for more than a year is required to complete an annual report; this report details how a station has performed against its ‘key commitments’ and also identifies its sources of income and expenditure, in part to ensure that the station has met the legislative requirements on funding. For the period May 07 – Apr 08 Ofcom received reports from 67 stations (a further 39 stations launched their service during this period, and so are not included in this report).

1.7 The average station’s income is around £101k, although the median figure (the mid-point in the distribution of stations’ incomes) is significantly lower at £65.5k, suggesting a small number of stations earn significantly more than the majority. Stations serving particular communities are more likely to have a higher income - those serving general audiences in urban areas (£110k) and those serving minority ethnic communities (£124k) tend to have more income than the sector average.

1.8 The most significant type of income for the sector is grant funding, which accounts for around 45% of the total. Income from on-air advertising or sponsorship is the next most important, accounting for around 18% of the total (although 10 stations in this year’s report did not take advertising either as a matter of choice or policy (eight stations) or because they were forbidden by legislation from doing so (two stations) due to an overlap with a small commercial service serving fewer than 150k adults).

1.9 Public sources of funding – usually in the form of grants - account for around 53% of the sector’s total income. Local authorities are a major source of public funding, accounting for around 16% of the sector’s total income whilst the Community Radio Fund, administered by Ofcom on behalf of the Department for Media, Culture and Sport, accounts for around 7% of the sector’s total income.

1.10 Community radio stations are generally meeting their costs: the average station costs £101k to run. Again, the median figure is notably lower at £64.5k. The most significant area of expense is staffing, which accounts for around 51% of the sector’s total costs.

1.11 On average each community radio station has 74 volunteers who give a combined total of around 214 hours volunteer time a week per station (just under 3 hours for each volunteer a week). Speech forms around 33% of daytime output, and each station broadcasts around 81 hours of original output a week, most of this output is live and the vast majority is locally produced.

1.12 Following receipt of individual annual reports, Ofcom has had further dialogue with one station with regards to it receiving more than 50% of its income from on-air advertising. Ofcom is satisfied that the station in question has taken appropriate steps to remedy this and proposes no further action. Ofcom has also had further dialogue with one station regarding a significant failure to perform against its key commitments; following the procedure set out in our document ‘Regulation of community radio services’ available at (www.ofcom.org.uk/radio/ifi/rbl/commun_radio/crregulation/), we are now working with the station to resolve the matter and expect to issue an update on our website shortly.

The full document is available below

• Community Radio: Annual Report on the Sector [pdf]
  Full Print Version

Back to top