Institutions: OFCOM

From the Guardian.

OFCOM prepares for cuts and job losses

Budget review likely to result in 'significant reduction', says chief executive Ed Richards, who is taking 10% pay cut

Ofcom has begun a review that will result in "significant" cuts to its £142m annual budget and staff, and its chief executive, Ed Richards, has decided to take a 10% pay cut.

Richards said today that the review would lead to a "significant reduction" in expenditure, with "job losses likely".

The media and telecoms regulator, which employs 873 staff and has a budget of £142m for the year to the end of March 2011, intends to complete the first phase of its review in late summer.

Speaking to staff today, Richards said that the organisation would have to make "some very tough decisions". This would ultimately see Ofcom "do more for less", he added. "We will redefine how we do things to deliver the same capability but spend less money doing so."

Ofcom, and Richards, attracted criticism from the Conservatives when they were in opposition last year. David Cameron singled out Richards's pay as an example of inflated public-sector salaries.
Richards had a total remuneration package of £392,056 in 2008/9. In the 12 months to the end of March this year that dropped to £381,713.
He revealed today that he would take a 10% cut, more than £38,000, to £343,541 in the coming year to the end of March 2011.

The Ofcom chair, Colette Bowe, who was paid £200,000 in the year to the end of March, will also take a 10% pay cut.

However, while Ofcom's top management has not taken bonuses in the past two years no decision has been made about bonuses for the current financial year.

It is not known how deep the cuts to Ofcom's budget will be, or the number of jobs that will go. However, in the emergency budget on 22 June the government indicated that it was looking for cuts of around 25% from all departments.

"These are very challenging times for the entire public sector," Richards said. "All public organisations need to face up to the challenge of playing their role in reducing the budget deficit while protecting the most critical services. Like everybody else, we at Ofcom must make our contribution."

Ofcom had a budget of £136.8m in the year to the end of March. This has been raised to £142.5m as the media regulator has been asked to take on additional responsibilities such as establishing regulations and processes relating to illegal file-sharing.

"We have an excellent track record, our work on broadband speeds and securing agreement of companies to reduce their termination charges are just two very recent examples," said Richards. "While we will have to make some very tough decisions we will continue to strive to deliver the best outcomes for citizens and consumers across the UK."

Ofcom also today published its annual report for 2009/10.
Despite Richards's salary falling, the report shows that overall payments made to Ofcom's executive committee rose year on year. In 2008/9, a total of £1.6m was paid out, while in the year to the end of March it was £1.98m.
Ofcom said that the figures have been affected by "various arrivals and departures". Payments have been made to 10 committee members in total over the past year, with a more accurate measure of annualised figures coming out flat at about £2.1m.
According to the annual report, Ofcom reduced the amount paid to its board by 11% from £537,247 in 2008/9 to £476,336 in the year to the end of March 2010.

Ofcom's content board saw total remuneration remain almost flat year on year at £364,806.
Total staff costs actually increased year-on-year from £58m to £62m. According to the report the average number of employees for the year to the end March 2010 was 865 - up on 817 from 2009. As at 31 March Ofcom employed 873 staff.
The annual report shows that Ofcom received income of £132.7m for the year to the end of March.

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