Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Deferred
Ofgem's proposed energy debt relief scheme faces significant delay until winter 2025
Conclusion
The Department recognised this as a serious issue. It made clear that, because in the first instance consumers facing energy debts should contact their energy supplier, the regulatory regime should that require suppliers to offer “good, accurate and helpful advice” and that the Department was expecting this of Ofgem. It told us that it was exploring options around the issues of the support and advice [that energy suppliers] offer consumers. 54 The Department said it has started a review of Ofgem which is looking to make sure it has the powers and capabilities it needs to address any poor outcomes for consumers.55 It is also working with Citizens Advice on whether more could be done to provide a “stronger debt advice service” for consumers.56 It also told us that it was working closely with Ofgem as it is consulting on and preparing its new consumer debt strategy.57 Written evidence we received from Fair by Design highlighted concerns, however, that a debt relief scheme proposed by Ofgem will not implemented until winter 2025.58 54 Q 52 55 Qq 53, 67 56 Q 52 57 Q 53 58 EBS0008 13 2 Responding to future energy price volatility Reducing electricity bills
Government Response Summary
The department proposes 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 and is working with Ofgem to refine these processes.
Government Response
Deferred
HM Government
Deferred
4.1 The government disagrees with the Committee’s recommendation. 4.2 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. 4.3 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. 4.4 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.