Britain's Ofcom to Enter Debut Year 27% Over Budget

18 December 2003

The arcane realms of politics, quangos and the civil service are no strangers to gross overspending -- as the US Department of Defense and the begetters of the Scottish Parliament Building (among a legion of others) can attest.

So few eyebrows will be raised at Tuesday's admission by Ofcom, the government's newly created media and telecoms supra-regulator, that its costs for the year from April 2004 will total £164 million ($287.07m; €232.99m) -- a mere 27%, or £36 million, over budget.

Ofcom chairman Lord David Currie used the occasion of an open day for media and telecoms companies to justify the overspend with a soundbite: "Cheap regulation can be very expensive," he told his audience, most of whom would be called severely to account for such excesses by shareholders.

Lord Currie, whose background is that of academic economics, may or may not be aware that that this overspend of taxpayers' money would single-handedly cover the median annual salaries of 893 consultant-nurses (the most senior grade).

Ofcom, whose regulatory chores will be performed from its ritzy Riverside House office block in central London, boasted that its annual running costs will be 5% less than the five bodies it supersedes (the Broadcasting Standards Council, the Independent Television Commission, Oftel, the Radio Authority and the Radiocommunications Agency).

Hardly the level of saving a commercial merger on the same scale would trumpet. Curiously, Ofcom was at pains to emphasize that the largest single item in its £36m overspend is a £20 million loan and interest repayments on capital borrowed from the Government to set up Ofcom. "You don't need second sight to budget ahead for that," observed one sour attendee.

The regulator officially opens its doors for business as from December 29. In the fifteen months preceding this event, the fitting out and running costs of Riverside House alone came to £11.3 million.

In January, Ofcom will initiate discussions with the broadcasters and telecoms companies who will fund its costs, more than half of which will be met by mandatory fees. “We will be actively taking part in these conversations,” said one broadcaster, with ill-concealed overtones.

Data sourced from: Times Online (UK); additional content by WARC staff