Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
Ofcom's online safety regime faces a Treasury budget cap and a £3 million funding shortfall.
Conclusion
Ofcom’s expenditure is subject to an overall budget cap set by HM Treasury. Treasury agreed to increase this cap to fund the upfront costs of the online safety regime, with the costs funded from Ofcom’s retention of Wireless Telegraphy Act 2006 receipts, which it would have otherwise handed to the Exchequer.39 The Department told us that this arrangement will continue until the fee regime is in place.40 As at April 2023, Ofcom estimated that its cumulative costs in preparing for and implementing the regime could total £169 million over five years by the end of 2024–25.41 As part of this, the Department and Treasury agreed to provide Ofcom with £63 million for 2024–25, which was £3 million less than Ofcom had requested.42
Government Response Summary
The government agrees and states that Ofcom will consult publicly in Summer 2024 on its fees regime, including revenue definition and charging principles, aiming for implementation in the 2026-27 financial year. The department will consult on recouping pre-charging year costs once the fee regime is operational.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2024 4.2 As set out in its approach to implementing the Online Safety Act 2023, Ofcom will consult publicly in Summer 2024 on its approach to the fees regime, including the definition of Qualifying Worldwide Revenue and its statement of charging principles. 4.3 As part of this consultation, Ofcom will set out the evidence and reasoning for its proposed approach, which will include financial modelling and impact assessments undertaken to support these proposals. 4.4 Ofcom continues to work with the Department for Science, Innovation and Technology (the department) with the aim of implementing the fees regime in the 2026-27 financial year. The consultation will provide more detail about the proposed timetable. 4.5 Decisions around recouping Ofcom’s costs pre-dating the initial charging year are the responsibility of the Secretary of State. The department intends to consult on the approach to recoupment once the fee regime is operational.