Ofcom clashes with MPs over NAO report

Media regulator Ofcom has clashed with the chair of a powerful committee of MPs after she accused it of failing to provide value for money for taxpayers. Labour MP Margaret Hodge, who chairs the Commons public accounts committee, said today the regulator's failure to adequately explain how it spends its annual £121.6m budget was "worrying" and "disappointing". Hodge was responding to a National Audit Office report published today which says it cannot judge whether the regulator is providing value for money because it fails to lay out its objectives clearly enough. She said the report "does not give a completely clean bill of health". Ofcom reacted furiously to Hodge's attack, describing her comments as "unfounded" and "without justification". The NAO report also praised Ofcom for reducing its running costs by nearly a third in real terms since in was created in 2003, saying it was "doing more with less". However, Hodge seized on the NAO's finding that Ofcom should explain its primary purposes more clearly. "The NAO finds that the organisation is poor at spelling out what it intends to achieve with the money it spends," she said. "£76m of this money comes from taxpayers, and they have a right to know that it is being spent as efficiently and effectively as possible ... it should work to do better." Ofcom is funded by a £76m annual grant from the Department for Business, Innovation and Skills and £600,000 from the Department for Culture, Media and Sport. The remainder of its budget comes from payments made by the companies it regulates, including broadcasters and telecoms operators. An Ofcom spokesman said: "Ofcom does not accept the suggestion that it has a lack of focus on value for money. We regard this view as unfounded and without justification. We will be very happy to explain to the PAC why we take this view and expect to do so in due course." The media regulator has pledged to slash its budget by a further 28.2% and axe 170 jobs as part of the government's comprehensive spending review. The NAO report said Ofcom's annual budget of £121.6m is marginally higher that the amount spent by the five regulatory bodies it replaced. It would be just over £140m if inflation had been taken into account, however, and has fallen by 14% in real terms. The figure rises to 27% when the cost of additional responsibilities taken on by Ofcom are included. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".