Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
We asked Ofgem what it was doing to support vulnerable customers.
Recommendation
We asked Ofgem what it was doing to support vulnerable customers. Some stakeholders criticised Ofgem’s decision to add the SOLR cost levy to the electricity standing charge when customers cannot influence this cost by reducing their energy usage. Ofgem told us that it was examining the impact on different groups of vulnerable customers of spreading the cost of supplier failures across the standing charge and the volumetric charge. It explained that it was also working closely with government on the package of support available to customers.50 In May 2022, as part of its package of measures to help households during the cost of living crisis, the Government announced that all UK energy customers would receive £400 of support with their energy bills from October 2022 through an expansion of the Energy Bills Support scheme.51 We asked the Department how it would ensure that this support reached the customers it was intended to help, particularly those with prepayment meters. The Department told us that “a large fraction” of customers who use prepayment meters would receive the payment automatically and that it would adopt this approach this where possible. It told us that where this was not possible, it had worked through what the right option would be to ensure that customers still benefited from the support available, including whether to use vouchers similar to those used in other schemes for customers on prepayment meters. It explained that it thought that it had a wide enough range of options to ensure that all prepayment customers to access the same benefit as others.52
Government Response Summary
The government is using all the levers available to make sure that vulnerable customers benefit from the energy support available, including the Energy Bills Support Scheme (EBSS) and the Energy Price Guarantee (EPG).
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 5.2 The government is committed to using all the levers available to it to make sure that vulnerable customers benefit from the energy support available to them. Under the Energy Bills Support Scheme (EBSS), households have started to receive £400 off their energy bills since October 2022, with the discount made in six instalments. This is being delivered via energy suppliers. 5.3 Ofgem provides the compliance and enforcement framework for EBSS and monitors energy suppliers’ compliance with this. Ofgem is acting swiftly to resolve any compliance concerns, in line with its duties under relevant supplier licence conditions, to ensure customers are receiving what they are entitled to. 5.4 Suppliers have confirmed that vouchers have been sent to all two million customers with traditional prepayment meters (PPMs). The department is urging consumers to redeem vouchers via a communications campaign targeted specifically at traditional PPM users; this includes posters, social media posts and radio broadcasts to ethnic minority radio stations in different languages, as well as communications direct from suppliers to customers. 5.5 The government continues to monitor voucher redemption rates through supplier reporting and will work with suppliers to ensure they are taking action to contact those with unredeemed vouchers and to reissue lost vouchers. The government is also working with the Post Office, PayPoint, consumer groups and charities to ensure that they carry and transmit accurate information about EBSS. 5.6 Vulnerable customers who are not eligible for EBSS, due to not having a direct relationship with an electricity supplier, such as park home residents, may be eligible for the Alternative Funding announced in July 2022. The government is undertaking key work with a range of stakeholders to finalise the details regarding eligibility and process, to ensure payment this winter. 5.7 In addition, households continue to be supported by the Energy Price Guarantee (EPG). This government scheme will bring a typical household’s energy bill in Great Britain down to the equivalent of around £2,500 per year (for the period of 6 months) from 1 October 2022 to the end of March 2023. The EPG will save a typical household in Great Britain £900 in the winter of 2022-23.