Section 359 of the Communications Act 2003 makes it possible for a fund for community radio operators to be set up, and for Ofcom to administer it and “make such grants as they consider appropriate” to community radio licensees.
Government (specifically, the Department for Digital, Culture, Media & Sport) provides some funding to be distributed to community radio stations through such a fund. Only holders of a community radio licence can seek a grant from this Fund.
Ofcom has established the Community Radio Fund Panel to meet as required to examine applications and make awards from the Fund. The Panel's Terms of Reference are available to view.