Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Rejected
Collect data on supplier performance in advising indebted consumers for use in Ofgem's review.
Conclusion
The Department and Ofgem are not doing enough to ensure people falling into debt with their energy bills receive the advice and support they need from their energy supplier. At the same time as energy prices have risen significantly so has the extent to which people have fallen into debt with their energy bills. Consumer energy debt is at a worryingly high level, with £3.7 billion owed by domestic consumers for both electricity 4 and gas in 2024 compared with £1.8 billion in 2021. Millions of people are living in cold conditions and cutting back on essential costs such as food. Many people who are unable to pay their energy bill struggle to receive good, accurate and helpful advice or support from their energy supplier. The Department accepts this is a serious issue and is working with Citizens Advice to look at what can be done to provide a stronger debt advice service to support customers. Ofgem has recently launched a review of service standards and support for people in debt; and the Department has initiated a wider review of Ofgem to ensure that it has the powers to address any poor outcomes for energy consumers. These reviews provide an opportunity to ensure consumers receive better support from their energy suppliers when they face difficulty paying their bills. recommendation The Department should collect data on how well suppliers are performing in providing advice and support to consumers that struggle to pay their energy bills. The Department should use this data as part of its review of Ofgem, to assess whether it has the information and powers to deal with suppliers that do not provide sufficient advice and support to consumers in debt.
Government Response Summary
The government rejects the recommendation, stating Ofgem is better suited to collect and evaluate data on supplier performance in supporting consumers in debt, and it is working with Ofgem on an alternative approach.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. To address the Committee’s concerns, the department proposes an alternative approach, recommending that Ofgem, as the market regulator, is better suited than DESNZ to collect pertinent information and evaluate the guidance provided to energy customers experiencing debt. DESNZ takes this matter seriously and is actively working with Ofgem to refine these processes. In December 2024, Ofgem initiated a Consultation on Improving Debt Standards, focusing on enhancing supplier engagement with consumer advocacy groups and debt advice charities. This consultation also explores ways to streamline support for these organisations, ensuring they can more effectively assist their clients in discussions with energy suppliers. Via licence conditions, Ofgem currently requires that energy suppliers provide clear and accessible information to customers about the support available if they are struggling to pay. This includes details about payment options, debt advice services, and relevant industry schemes. The review of Ofgem is exploring whether Ofgem may need additional tools or powers to ensure that customers are protected and that Ofgem acts as a consumer champion. The Review aims to publish its outcomes in the autumn 2025.