New online reform regulatory system could cost nearly £170m, Ofcom estimates
12 July 2023, 10:54
A new report by public spending watchdog the National Audit Office praised the progress Ofcom has made in preparing for the new regulatory role.
Preparing and introducing the Government’s new online safety regulatory reforms could cost nearly £170 million, Ofcom has said.
The telecommunications and broadcasting watchdog, which will get new regulatory powers under the Online Safety Bill, has said it will require hundreds of new staff to fulfil the role.
The landmark Bill would introduce sweeping reforms, which already include moves to protect children from harmful content.
It will also aim to tackle illegal and harmful content online by imposing new legal requirements on big tech companies.
A new report by public spending watchdog the National Audit Office (NAO) praised the progress Ofcom has made in preparing for the new regulatory role, even before the Online Safety Bill becomes law.
The passage of the Bill has faced delays and it is currently in the House of Lords.
A new report by the NAO found that Ofcom is estimating that the cumulative cost of preparing for and implementing the new online reform regime could total £169 million by the end of 2024/25.
Around £56 million of those costs will have been incurred by the end of 2022/23.
The entire regime is intended to be self-financing, with Ofcom covering costs by introducing fees as part of the overall structure. It is not expected to become fully operational until 2025 at the earliest.
The NAO warned that “challenges remain” for Ofcom in recruiting extra staff. As of February, it estimated that more than 450 new workers will be needed by the end of 2023/2024.
“As at April 2023, it had yet to seek the agreement of DSIT (Department for Science, Innovation and Technology) or HM Treasury to the funding it requires,” the audit report notes.
NAO head Gareth Davies said: “Securing adequate protection of citizens from online harms is a significant new role for Ofcom, and its preparations to date have been good.
“Ofcom will need to manage several risks in a way that delivers value for money. It will need to move quickly to cover any gaps in its preparations should the scope change between now and implementation.
“And it will need to cover its costs by introducing fees so that the regime becomes self-financing.
“As ever, access to good quality data will be essential for Ofcom to monitor the compliance of services and to evaluate its own effectiveness and for DSIT to know that the regime is working.”
Chairwoman of the Public Accounts Committee Meg Hillier said: “In 2022, over two-thirds of children using the internet in the UK had experienced at least one potential online harm in the last month.
“So, it is encouraging to see that Ofcom’s preparations for the forthcoming Online Safety regime have progressed well.”
Government has the chance to get this regime right from the start, but Ofcom must remain adaptable to scope changes and implementation challenges.
“It should also work with the Department for Science, Innovation and Technology to ensure they have the data and evaluation they need to ensure the regime protects internet users from harmful content,” the Labour MP said.
Rani Govender, senior child safety online policy officer at the NSPCC, said it was “good to see preparations are going well”.
“The sheer scale of the job the regulator faces means they must ensure their work is well targeted to the greatest risks to children, and this requires consistently understanding the experiences of young users.
“It’s therefore crucial that children are at the heart of Ofcom’s preparation and future work. The Government could underpin this by creating a statutory online child safety advocate in the legislation that exists to amplify the voices and experiences of children online.”
