Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Accepted
Self-financing online safety regime faces delays in fee collection and full cost recovery.
Conclusion
The online safety regime is expected to be self-financing, once it is fully operational, with both ongoing costs of the regime and the costs of its set-up covered by fees levied on industry.43 However, Ofcom will not start charging fees until 2026–27 and will not begin recouping the set-up costs until 2027–28, with it taking three to five years for these costs to be fully recovered.44 The start of the fee regime is later than Ofcom originally expected. In June 2023, Ofcom had expected that it would start to recover costs in 2025–26, which was already a year later than originally expected. These delays are due to changes to the timetable and scope of the Bill during its passage through parliament, as well as a recommendation by a parliamentary Committee to introduce additional scrutiny to the legislative process required to introduce the fees.45 Ofcom recognised that it will be a long time before the costs are recovered, but told us that they do not score as public expenditure.46
Government Response Summary
The government agrees with the committee's observations, stating Ofcom will consult publicly on its fees regime in Summer 2024, aiming for implementation in the 2026-27 financial year, and plans to consult on recouping pre-charging costs once the 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.