Ofcom bosses earn ?2.3m

The top team at Ofcom was awarded almost £2.3m in salaries and benefits over the past year, with chief executive Stephen Carter banking £370,769. This year's costs will be higher, as some employees only started part-way through the 2003-2004 financial year.

Ofcom's staff costs totalled £13.4m, according to the regulator's annual report, published yesterday. Ed Richards, the former No 10 policy adviser recruited as a senior partner, was paid £254,844 in salary and benefits for 11 months' work, while Kip Meek, another senior partner, received £300,057 for a full year.

While Mr Carter's package is no match for big City earners such as Vodafone's chief Arun Sarin, who was paid more than £3.2m last year, it is an unusually high salary package for the public sector. It is less than his final salary and payoff from the cable company NTL, when he received more than $2.6m (£1.5m).

Mr Carter insisted he was good value. "These are big sums of money, but I can assure you I am not just doing the job for the money." He pointed out that the sectors regulated by Ofcom amounted to a £60bn industry.

Lord Currie, chairman of Ofcom, who was paid £150,000, said: "We have brought in very able people. We have paid them salaries that are by no means market rates but they are competitive, and I'm very comfortable with them."

The salaries of the senior Ofcom figures dwarf that of the minister to whom the organisation reports, culture secretary, Tessa Jowell, who is paid £130,347. Mr Richards was paid considerably more than his old boss, Tony Blair, who receives £178,922. The average Ofcom staff member is paid £43,000.

Ofcom claimed to be an efficient regulator, bringing employee numbers down from a combined figure of 1,150 in the five regulators it replaced.

The £145m budget in 2003-2004 represented a 5% cut on a like-for-like basis on the combined budget of the five previous organisations. The budget will be cut by a further 5% in both this and next year.

This figure has been condemned by some of Ofcom's stakeholders as an accounting sleight of hand: the gross figure is considerably higher than the total spend of the previous five regulators. Last year Ofcom said its total operating costs in 2004-2005 - its first full financial year of operation - would be £164m, a 27% increase on the combined costs of the Broadcasting Standards Commission, the Independent Television Commission, the Radio Authority, the Radio- communications Agency and Oftel.

Ofcom took up its statutory powers on December 29 2003; before then, the organisation did not raise any revenue, so its accounts show an operating loss of £23.3m. After assuming its powers, Ofcom recorded an operating deficit of £1.8m, which it put down to "timing differences". The regulator said this would be recovered in 2004-2005.

Mr Carter said yesterday the principal challenge for the regulator in the coming year would be the "digitalisation" of every area it regulates, from telecommunications to television.

He said one of the most important aspects of the switch to a digital television network would be the establishment of SwtichCo, the body that would drive forward the change.

"If you want something done, it's generally a good idea to give it to somebody to do." He acknowledged however, there would be "significant consumer issues" ahead - a euphemistic reference to the resistance likely to be encountered from alarge minority of the population to the switchover from analogue to digital television.