Tag: regulators

Millions unaware of available support with household bills as debt soars, NAO finds

  • Debt to water and energy companies reached more than £7 billion, while customers are missing out on support to help them manage debt, such as repayment plans and social tariffs
  • A third of customers did not find it easy to get in touch with their broadband providers when things go wrong
  • The NAO says regulators Ofgem, Ofwat and Ofcom must strengthen support for consumers in vulnerable circumstances, increase awareness of support and tackle the drivers of rising debt.

Millions of people are missing out on support for essential bills, such as water, energy and broadband, as debt to water and energy companies climbs over £7 billion1 – this is according to a report by the National Audit Office (NAO) published today (10 June).

The report examined how Ofcom, Ofwat and Ofgem support consumers in vulnerable circumstances and whether people can access the help they need from providers of essential services.

The watchdog found there has been a marked increase in household energy debt, following Russia’s invasion of Ukraine, with energy debt more than double what it was in 2021, rising by 118%.2

Since the NAO’s last report on this topic in 2019, regulators have strengthened protections, introducing new rules on how companies treat customers and taking enforcement action – for example changing company licences to improve customer service and issuing multi-million-pound fines to providers where service and performance fall short of expectations. Now, NAO finds the regulators must now make changes to keep pace with consumer needs.

Consumers still struggle to contact their providers and are not always aware of support available to help manage their bills – such as social tariffs and repayment plans.

The NAO found only a third of eligible broadband customers and 39% of water customers who are struggling to pay their bills are aware of social tariffs, meaning people on low incomes and in vulnerable circumstances could be missing out on support to help manage debt. Energy customers on repayment plans owe around £1,000 less than those without one in place.

Ofwat and Ofgem have overseen an uptake in registration for company priority services registers (PSR)3, although consumer awareness remains low. The PSR does not extend to the broadband sector, which has separate requirements. Ofcom does not routinely monitor take up or awareness of support.

The NAO found regulators are not aligning their performance measurements with actual consumer experiences and outcomes.

The NAO recommends regulators:

  • Improve access to support – to make it easier for people to contact providers through a range of accessible channels that meet the diversity of consumer needs.
  • Increase awareness of available help – such as social tariffs, repayment plans and other support schemes, so eligible consumers are clearly signposted and not missing out.
  • Tackle industry drivers of rising debt – including addressing industry practices such as inaccurate billing, delays when people move home and barriers that prevent consumers from switching tariffs. The NAO found that industry practices account for an estimated 35% of customer energy debt.
  • Strengthen support for consumers in vulnerable circumstances – promoting services that are designed around need, improving how consumers are identified and supported, and making better use of data and data-sharing across sectors 

Gareth Davies, head of the NAO, said: “Regulators have made progress to support consumers, but they’re not keeping up with the pressure now facing millions of households.

“With debt rising sharply, it’s more important than ever to make regulation work so that people know what support is available and can contact essential providers when they need to.”

READ THE REPORT: Regulating water, energy and broadband to protect consumers in vulnerable circumstances

Chancellor calls on watchdog bosses to tear down regulatory barriers that hold back growth

  • Chancellor pledges to work with regulators to develop ambitious reforms.    
  • Today’s summit marks the first in a series of meetings with the regulators ahead of publishing action plan.
  • Reeves welcomes initial ideas from regulators to boost innovation and investment, but pushes for more ambition.

The CEOs of key regulators were urged to ‘tear down regulatory barriers’ that hold back economic growth at a summit in the Treasury yesterday.    

In a meeting hosted by the Chancellor of the Exchequer and Secretary of State for Business and Trade, chief executives at watchdogs covering sectors including railways, water, energy, aviation were told that economic growth is the absolute top priority for the government, as part of the Plan for Change for put more money in people’s pockets.    

The meeting was the first in a series following a joint letter from the Prime Minister, Chancellor and Secretary of State for Business and Trade in December, in which the government asked the regulators to each propose five reforms to support growth in the coming year. Over the coming weeks, 17 regulators will be called in to have their proposals scrutinised as the government leaves no stone unturned to deliver growth.    

At yesterday’s meeting, the Chancellor told the regulators that they would have a key role to play in delivering growth by helping to create a regulatory environment that unlocks innovation and investment, supports businesses to thrive and allows much needed infrastructure to be built.    

The regulators agreed with the Chancellor that they have a role to play in driving growth but highlighted that there are some barriers, including the need to balance growth with their other legal responsibilities.    

The Chancellor noted that the regulators’ responsibilities had accumulated over time and said she was open to hearing about where this was preventing them from taking clear, consistent and balance actions to drive growth.

She emphasised the importance of leadership to deliver a mindset shift on regulation, calling on each of the CEOs in the room to institute cultural change based on helping to deliver growth instead of excessively focusing on risk. 

The Chancellor also promised that the government would work with them to develop and deliver important reforms by playing its part, including by making time for legislation where it is needed or using the upcoming Spending Review, and noted the Prime Minister’s promise to rip up regulation that blocks investment to make the regulatory regime fit for the modern age.    

The Chancellor was clear that while some of the proposals already put forward were promising, she wanted to see greater ambition and urgency to drive economic growth. She emphasised that fresh ideas were needed and noted that the Government will also ask industry to come forward with their own ideas to deliver a more growth supportive regulatory environment.    

She highlighted some specific and promising ideas she had heard from the regulators today. These included: driving greater responsiveness to business demands, particularly on planning and license applications; grant funding administered by Ofwat to drive innovation in the water sector supply chain; energy tariff reform; increasing access to rail operator efficiency data and innovative drone solutions which would unlock growth in the public sector.   

The regulators agreed to continue working with the government on their proposals reform ahead of publishing an action plan in Spring, and welcomed today’s strategic discussion. 

The Chancellor finished the meeting by reiterating that leadership matters, noting that every regulator would have to play their part to improve living standards across the country.    

Following the meeting, Chancellor of the Exchequer Rachel Reeves said: “There’s no substitute for growth. It’s the only way to create more jobs and put more money in people’s pockets, which is why it’s at the heart of our Plan for Change.     

“Every regulator, no matter what sector, has a part to play by tearing down the regulatory barriers that hold back growth. I want to see this mission woven into the very fabric of our regulators through a cultural shift from excessively focusing on risk to helping drive growth.”