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The Office of Communications Annual Report and Accounts for the Period 1 April 2020 to 31 March 2021

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The Office of Communications Annual Report and Accounts for the Period 1 April 2020 to 31 March 2021 The Office of Communications Annual Report and Accounts For the period 1 April 2020 to 31 March 2021 Read the Welsh version of this document HC 459 The Office of Communications Annual Report and Accounts For the period 1 April 2020 to 31 March 2021 Presented to Parliament pursuant to Paragraphs 11 and 12 of Schedule 1 of the Office of Communications Act 2002 Ordered by the House of Commons to be printed on 8 July 2021. Laid before the Scottish Parliament by the Scottish Ministers Laid before the Welsh Parliament by the Rt Hon Mark Drakeford MS, the First Minister of Wales HC 459 © Ofcom Copyright 2021 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government- licence/version/3. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents. Any enquiries related to this publication should be sent to us at [email protected]. ISBN 978-1-5286-2705-4 CCS0521569280 07/21 SG/2021/123 Printed on paper containing 75% recycled fibre content minimum Printed in the UK by Hobbs the Printers on behalf of the Controller of Her Majesty’s Stationery Office. Contents Chair’s Message 4 Chief Executive’s Report 6 Section A: Performance Report 8 Overview 9 Performance Review 11 Principal Risks and Uncertainties 43 Stakeholder Engagement 47 Financial Review 55 Corporate Responsibility 61 Sustainability Report 64 Section B: Accountability Report 66 Governance 67 Our Employees 92 Remuneration Report 96 The Certificate and Report of the Comptroller 103 and Auditor General to the Houses of Parliament Section C: Financial Statements 106 Statement of Income and Expenditure 107 Statement of Comprehensive Net Expenditure 107 Statement of Financial Position 108 Statement of Changes in Equity 109 Statement of Cash Flows 110 Notes to the Accounts 111 Section D: Annexes 148 A1. Section 400 149 A2. Regulatory Statements 150 A3. Investigations Programme 154 A4. Broadcasting Complaints, Cases and Sanctions 155 A5. Spectrum Engineering And Enforcement 165 A6. Spectrum Licensing 167 A7. Sustainability 172 A8. 700 MHz Clearance 175 Ofcom Annual Report and Accounts 2020/21 ofcom.org.uk Chair’s Message 4 Chair’s Message Under lockdown, the nation spent twice as long watching streaming services. Parcel volumes rose by a third to meet the UK’s online shopping needs. Our companies and networks responded brilliantly, with telecoms, tech, postal and broadcasting key workers keeping us connected, informed and entertained. So a world without first-class communications services – which even before the pandemic lay at the heart of our personal and working lives – now seems unimaginable. Ofcom’s job has involved responding to changing consumer demands, supporting our industries through the crisis, and planning for a post-pandemic world reliant on Maggie Carver, CBE strong networks and trusted media. Interim Chair Covid-19 caused many people’s circumstances to shift suddenly – often through bereavement or financial hardship. So it was important that Ofcom continued its Fairness for Customers programme, For Ofcom, in 2020 it was striking securing commitments from broadband firms to witness just how quickly the to review prices for vulnerable people. We made tragic pandemic changed how mobile switching easier by banning handsets being locked to a network; improved the contract rights people communicate – in ways that of telecoms customers; and ensured disabled may endure. customers can access a choice of services. When working restrictions began and We also completed our major review of wholesale office phones fell silent in 2020, the broadband markets, setting out a range of measures to boost competition and investment in full-fibre amount of time spent on mobile calls networks. Those decisions are designed to lay the surged by 45%. Residential broadband foundations for new telecoms networks that can networks became the backbone of serve families, business, schools and public bodies both the UK’s digital economy and its for generations to come, bringing the economic and education system. The amount of data social benefits of ultrafast broadband to everybody around the UK. flowing over the UK’s main broadband network doubled. Getting a good mobile signal is equally important. So we made more airwaves available to generate additional coverage and support 5G; and monitored operators’ progress towards their commitment to bring good calls and data coverage to 90% of the UK’s geography. Chair’s Message 5 Ofcom’s job is more important than ever: adapting to change so that our rules continue to protect communications users from harm, support the content they value and enable the services they need. The pandemic also placed renewed importance on the Covid-19 crisis. trusted, regulated broadcasting. In a reporting year Throughout that period, and in the coming years, when broadcasting complaints rose significantly, Ofcom’s job is more important than ever: adapting we prioritised our enforcement in harmful areas to change so that our rules continue to protect such as incitement to crime, hate speech, abuse and communications users from harm, support the misinformation about Covid-19. content they value and enable the services they need. Viewers and listeners turned in huge numbers to It has been a privilege for me to oversee that work our public service broadcasters during the early as interim Ofcom Chair since January, following the pandemic, a testament to their enduring importance decision of our former chair Lord Terry Burns to at times of national significance. step down. Terry led our Board with dedication and But those broadcasters are facing unprecedented skill for three years, and I – alongside our Board competition and disruption. So as well as our regular and everyone at Ofcom – would like to thank him report on the BBC, in December 2020 we published wholeheartedly for his service. our review of public service media, consulting on plans to modernise the system and secure its future. Maggie Carver The way people use the post is also changing fast. We carried out a comprehensive review of what people and businesses need from the service in future, as we prepare to update our regulation to reflect declining letter volumes and protect the universal service. All these areas reflect the power of technology, social trends and new business ideas to transform how we communicate – a theme of disruption and change that has been reenforced and accelerated by Ofcom Annual Report and Accounts 2020/21 ofcom.org.uk Chief Executive’s Report 6 Chief Executive’s Report One example was our review of wholesale telecoms, which included setting out how prices will be regulated for the next five years. We included measures to safeguard accessible broadband today, while promoting investment in the networks of tomorrow. Our decisions will allow operators to phase out century-old copper wires in favour of gigabit-speed, full-fibre broadband, with the regulatory certainty they need to connect homes and offices at record speed. In a connected world, our networks must not only be fast; they must be safe. Ofcom is gearing up for new Dame Melanie Dawes, DCB duties to ensure that telecoms firms operate secure and resilient networks, working closely with the Chief Executive National Cyber Security Centre. In the coming months we will inform communication providers as to how we will monitor their compliance with new legislation in this area, and carry out Over the past twelve months, we intelligence-led stress tests to help them close any have learned that being connected security gaps. We will keep advising Government is everything. to ensure that the UK’s telecoms networks are not overly reliant on a single manufacturer. And we will In my first twelve months as Chief play our part in helping to tackle scams that rely on Executive, I felt that personally. Unable phone calls and text messages, a growing problem that demands close work with Government, industry to meet most Ofcom staff, I saw and the police. colleagues collaborate remotely with As we look to the future, Ofcom too is evolving and great professionalism. We are looking taking on important new duties. In December 2020, forward to working together in person as the Government prepared legislation to impose a again, but we’ve learned new ways to duty of care on social media firms, it tasked Ofcom be more flexible in the future. with the job of enforcing the new rules. Our approach here will be guided by online The past year has also meant further disruption for users’ needs and expectations, and rooted in our industries. This has underlined Ofcom’s purpose our long-standing experience of balancing as a regulator, and a need to be agile in response to freedom of expression with protection from harm. change, while keeping long-term focus. We will significantly grow our expertise in digital technologies, data analytics and cyber security, and build a new hub in Manchester to serve as a base for Ofcom’s work. Chief Executive’s Report 7 As a precursor to our online safety role, in the External partnerships are also crucial to effective coming year we begin regulating apps and websites regulation, and we have stepped up our co- – established in the UK – whose main purpose operation with the Competition and Markets is to share video among users. These providers Authority, the Financial Services Authority and the must take steps to protect users from serious Information Commissioner’s Office – launching harm such as incitement to hatred, violence and a joint plan of work on online projects to pool our criminal content. We have already worked with expertise and resources.
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