SEVEN former executives of the Radio Authority shared £392,000 in special bonuses last year when the regulator was wound up.

The payout was part of a deferred bonus scheme to keep key executives at the organisation in the run-up to its absorption by super-regulator Ofcom in December.

The bonuses were revealed in the Radio Authority’s final annual report, published yesterday, and are described as a “deferred retention” package.

An Ofcom spokesman declined to comment on the payoffs, saying that he did not represent the former Radio Authority. No spokesman for the Radio Authority now exists.

The payouts, high by public sector standards, represent the latest in a long line of costs incurred in the transition from the five former communications regulators to Ofcom.

Another former broadcast regulator, the Independent Television Commission, paid £1.54 million to directors for loss of office, out of total closure costs of £4 million. Patricia Hodgson, the ITC’s outgoing chief executive, received £500,000.

Ofcom has admitted that its operating costs of £164 million will be 27 per cent more than the combined costs of the five regulators it has succeded, even though it employs substantially fewer staff. Lord Currie of Marylebone, its chairman, said at the time of Ofcom’s foundation that “cheap regulation can be very expensive”.

The biggest reason for the increase is the cost of a £20 million loan that the Government insisted that Ofcom took out to pay for the transition. Ofcom maintains that on a like-for-like basis, regulatory costs are 5 per cent lower than before.

The abolition of the Radio Authority and other communications regulators was anticipated from December 2000, when the Government published a White Paper indicating its plan to create Ofcom. Officials feared that staff might desert while the organisation as a whole was serving out its notice.

Tony Stoller, the former Radio Authority chief executive, who is now Ofcom’s director of external relations, took home a £93,000 loyalty bonus as part of a pay package that totalled £275,500. In the previous year he earned £168,000.

The identities of the other six recipients of bonuses were not disclosed, but Ofcom sources said that the remaining £300,000 was shared out evenly.

EXTRA COSTS OFCOM FACES

• Chief executive Stephen Carter: £350,000 a year
• Radio Authority loyalty bonuses: £392,000
• ITC severance pay: £1.54 million
• Start-up loan and repayment: £20 million a year
• Additional duties: £8 million a year
• VAT payments not previously due: £8 million a year
• Fitting out of new headquarters: £11.3 million

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