Ofcom announces further budget reduction

29 March 2012

Ofcom today announced a further like-for-like reduction in its annual budget.

This is year two of a four-year programme to reduce significantly expenditure across the organisation while maintaining capability and effectiveness.

By 2014/15 the programme will have delivered a 28.2 per cent real terms saving, benefiting taxpayers and stakeholders. Ofcom is funded by a mixture of grant-in-aid and fees collected from the stakeholders it regulates.

The budget reduction for 2012/13 follows a significant expenditure reduction last year which involved a restructure of the organisation.

Budget for 2012/13

Ofcom's budget for 2012/13 is £121.4 million; this includes £7.2 million for Ofcom to fulfil its new duties to regulate the postal services sector following the merger of Postcomm in October 2011.

Ofcom's budget in 2011/12 was £115.8 million. The budget was set before Ofcom merged with Postcomm whose 2011/12 budget was £8.9 million.

Reduction in cost of regulation

Taking into account Ofcom's lower core budget and the reduced budget for postal regulation Ofcom will deliver a 6.1 per cent real terms (2.6 per cent nominal terms) reduction in the total cost of regulation year-on-year.

Priorities for the year

Ofcom's budget is to fund its planned work programme for the financial year. Its priorities are set out in Ofcom's Annual Plan which is published today. They are to:

  1. Promote effective and sustainable competition. This includes promoting investment and competition in super-fast broadband as well as ensuring effective competition in the business connectivity and landline markets.
  2. Promote the efficient use of public assets. This includes the release of prime chunks of spectrum and safeguarding the necessary frequencies for the London 2012 Olympic and Paralympic Games.
  3. Help communications markets work for consumers. This includes ensuring all communications providers supply clear information so that broadband customers can make informed choices and enable consumers to switch providers easily. Other work will include securing the universal postal service and determining the needs of postal users, as well as assessing the provision of communications services in each of the UK nations.
  4. Provide appropriate assurance to audiences on standards. This includes carrying out a review of regulation of video on demand and considering future approaches to content regulation.
  5. Contribute to and implement public policy defined by Parliament. This includes advising the Government on measuring media plurality, contributing to the Leveson Inquiry and implementing the provisions around online copyright infringement. It also includes working with the Government in promoting widespread super-fast broadband and reducing mobile not-spots in the UK.

Ofcom's Annual Plan for 2012/13 can be found here.

Details of Ofcom's budget can be found here.



  1. Ofcom's four-year budget reduction programme will deliver a 28.2 per cent real terms saving by 2014/15. The majority of the savings were delivered in year one; Ofcom's 2011/12 budget represented a 22.5 per cent real terms year-on-year reduction on the previous year.