Public Accounts Committee says Ofcom must do more to prove its worth

PAC says Ofcom 'needs to do more to allow the taxpayers and companies that fund its activities to judge its performance'

Communications regulator Ofcom has been criticised by the Commons Public Accounts Committee for having imprecise targets and an unacceptable contingency fund.

A report to parliament said the body's failure to publish precise targets means it is not possible to assess value for money and accuses it of double-counting savings, holding an "unacceptable" contingency fund - so big it was able to find £14m to offset part of its pension fund deficit - and having "relatively high" staff costs.

However, the committee warned a budget cut of 28 per cent over the next four years and a reduction in staff numbers of 170 carried "a high level of risk" of damage to the regulator's services.

Committee chair Margaret Hodge said the communications market is in most cases working well and consumers are enjoying the benefits of competition, but insisted Ofcom "needs to do more to allow the taxpayers and companies that fund its activities to judge its performance".

She said: "It does publish a lot of information about the consumer outcomes it desires, but does not say how it will measure whether it has achieved these outcomes. It does not tell us what success would look like. This makes it impossible to assess whether it is achieving value for money."

Hodge also said the watchdog could do more to deal with persistent problems like silent calls, the difficulty of switching telecom provider and limited competition in the fixed-line telephony market.

The report warned: "Some consumers find it extraordinarily difficult and slow to switch services such as broadband or mobile phone providers. They often face a lot of confusing information which makes it very difficult to compare different providers or to interpret what might be gained or lost by switching.

"Ofcom agrees that the switching process should be more convenient for consumers and is currently undertaking a strategic review in this area."

Ofcom was formed in 2003 from the merger of five previous regulators. Its operating expenditure in 2009-10 was £122m.