New online safety regime will cost £169m, Ofcom says

Challenges remain in regulating more than 100,000 online services
Source: Alamy

By Jonathan Owen

12 Jul 2023

Ofcom estimates the cumulative cost of creating a new regulatory regime under the Online Safety Bill will reach £169 million by 2024-25, according to a new report by the National Audit Office. Around £56 million of those costs will have been incurred by the end of 2022/23.

And Ofcom needs more than 100 additional online safety staff, on top of the 346 it has already recruited in preparation for its expanded remit to regulate online safety.

Ofcom has been preparing for its new regulatory role since 2020 when DCMS confirmed its decision to appoint Ofcom as the regulator for online safety. Responsibility for delivering the Online Safety Bill moved from the Department for Culture, Media and Sport to the Department for Science, Innovation and Technology earlier this year.

The NAO report into the preparations for the forthcoming legislation draws on interviews with officials from the DCMS, DSIT, the Home Office, Ofcom, and representatives from companies such as Google and Meta.

It states that Ofcom has made a “good start” in getting ready to implement a new online safety regime, but needs to manage risks around monitoring, scope and financing. And the UK’s communications regulator has yet to secure the funding it needs for future years.

The bill is expected to come into force later this year, but it will take at least two years for the full regulatory regime to be put in place.  

“Ofcom still has lots to do to develop the regime. It has identified that it will have to produce more than 40 regulatory documents,” the NAO report says.

“Based on preliminary research carried out by Ofcom, the number of online services subject to regulation could total more than 100,000 and could be significantly higher.”

It adds that the “government has enabled Ofcom to commit significant resources to preparing for the new regulatory regime up to 2023-24, but funding for 2024-25 is unclear".

The regulator is “is in the process of finalising its funding requirement for 2024-25 and seeking agreement for this funding from DSIT and HM Treasury," according to the report.

NAO head Gareth Davies said: “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.”

He added that 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".

An Ofcom spokesperson said: “We’re pleased that the NAO recognises our readiness to take on this important job. We’ll be hitting the ground running to put our implementation plans into action once the new laws are passed.”

Dame Meg Hillier, who chairs parliament’s Public Accounts Committee, commented: “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."

She added: “Government has the chance to get this regime right from the start, but Ofcom must remain adaptable to scope changes and implementation challenges.”

DCMS declined to comment and DSIT had not responded to a request from CSW for comment at the time of publication.

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