Clause 3 - Management of OFCOM
Office of Communications Bill [Lords]
10:30 am
Mrs Anne McIntosh (Vale of York, Conservative)
I regret that this is our last day, but I am sure that Committee members will contain their disappointment about the fact that we are not to convene after today.
The clause is about the management of Ofcom. We are disappointed that we did not succeed in gaining the Committee's agreement to decisions being made public, so I shall take this opportunity to examine how Ofcom should manage its affairs.
The clause and the explanatory notes—I shall quote from the clause—tell us that Ofcom shall
''in managing their affairs, have regard . . . to such general guidance concerning the management of the affairs of public bodies as OFCOM consider appropriate; and . . . subject to any such guidance and only to the extent that they may reasonably be regarded as applicable in relation to a statutory corporation, to generally accepted principles of good corporate governance''.
It is appropriate that the reference to those principles has been added.
The White Paper states in chapter 8, on page 77, that
''OFCOM will ensure that regulation is effective.''
We should take the opportunity to define and discuss what ''effective'' means and should be for the purposes of Ofcom. The White Paper continues:
''To achieve this aim it''—
Ofcom—
''will develop and maintain the necessary regulatory rules, in full consultation with industry and representatives of citizens and consumers''.
Clause 3 does not specify how that consultation will take place. We are then told that those rules will be developed
''within a broad framework of guiding principles established in statute'',
and that there are to be
''transparent and effective appeals processes.''
Good management is required to achieve all that, and the management will need to follow good management principles.
The White Paper tells us that Ofcom's
''work on content issues should take into account a wide variety of interests and reach consensual judgements. It will resolve any conflicts between its content-related objectives and its other objectives in a clear and transparent way . . . the quality of its staff will be vital to the delivery of its functions. It will require sufficient managerial and financial flexibility to retain and recruit the necessary highly skilled managerial and professional personnel in competitive labour markets.''
The Minister helpfully told us—it seems some time ago—that
''There are currently 1,111 employees among the five regulators, and the total cost is £118 million.''—[Official Report, Standing Committee E, 29 January 2002; c. 115.]
Some of the regulators are larger employers than others, with the Radio Authority being the smallest. I assume that £118 million is the figure for one year. As we are debating the management of Ofcom, I would like to question the Minister further about precisely how many staff he envisages the new regulator having. I will return to that in a moment.
At page 80, the White Paper states that Ofcom
''will operate in accordance with the best principles of corporate governance''—
as referred to in clause 3—''and better regulation.'' We should therefore consider the principles of better regulation. On page 13 of the report of the better regulation taskforce, which I obtained from the Library, the principles of good regulation are set out in a checklist. Outlining the principle of transparency—a theme that is referred to in several different reports—the taskforce's list states:
''The case for a regulation should be clearly made and the purpose clearly communicated. Proper consultation should take place before creating and implementing a regulation . . . Regulations should be simple and clear and come with guidance in plain English.''
On the principle of accountability, the list states:
''Regulators . . . should be clearly accountable to government and citizens and to parliaments and assemblies.''
The Committee has already debated those matters to some extent. The list continues:
''There should be a well-publicised, accessible, fair and efficient appeals procedure.''
On that point, the Opposition have been disappointed. The Bill does not tell us what publicity will be given to the new body's decisions, how accessible the management and the board will be, or what the appeals procedure will be. We would like the Minister to elaborate on those subjects.
Under the heading of proportionality, the better regulation taskforce states that
''Compliance should be affordable to those regulated—regulators should 'think small first'.''
That probably applies to all the activities of Government. The taskforce goes on:
''As far as possible, a light regulatory touch is used, with strict penalties when failures occur.''
The Opposition tabled a deregulatory amendment, but unfortunately it has not been selected for debate. Among those who have contacted us about the Bill there is a groundswell of opinion that it should emphasise a light regulatory touch. However, we are not told how such a light touch is to be achieved, or what strict penalties will apply when failures occur.
The better regulation taskforce also refers to consistency, stating that
''New regulations should be consistent with existing regulations.''
That is acutely important. The Bill is silent on how Ofcom, working with the existing regulators, is to ensure that the new regulations are consistent. In my view, the new regulations should replace the existing ones rather than coexist with them. The taskforce also states that
''Departmental regulators should be consistent with each other.''
The Bill fails to define the relationship between the two relevant Departments and Ofcom in terms of the management of the regulator. It is also silent on the responsibilities of the two Departments in monitoring the shadow Ofcom.