Citizens Advice response to Ofgem’s ‘Refreshing our Consumer Vulnerability Strategy’

Citizens Advice response to Ofgem’s ‘Refreshing our Consumer Vulnerability Strategy’ 4.26 MB

Citizens Advice welcomes Ofgem’s Consumer Vulnerability Strategy Refresh, which outlines several positive proposals. It’s vital that this Strategy protects consumers and improves outcomes - even as the market changes significantly due to technology and decarbonisation. 

Debt and affordability is the most pressing challenge facing consumers and the sector.  Energy debt is the most common form of debt our advisors help people with and we estimate that over 5 million households live with energy debt. We want to see further efforts to tackle this issue, through proactive communication with consumers who are at risk of debt and manageable repayment plans, while ensuring debt costs are allocated fairly and the Government plays its part with targeted bill support.

We welcome a review of billing rules, which should enable a reduction in the current backbilling period and reduce the risk of shock bills which can lead to debt. This will also depend on the successful rollout of smart meters. Ofgem should do more to support this outcome, including through its review of Guaranteed Standards, which should be extended to include smart meter issues.  

We support proposals to review the PSR, as many eligible consumers are not currently receiving support under the register. We emphasise the need for robust safeguards to prevent the unintended negative impacts on consumers should a multi-sector PSR be implemented. We also stress the need for specific metrics to address the issue of self-identification prior to the multi-sector PSR coming into effect.

We also believe that proposed reforms on standing charges require additional work to ensure consumers in vulnerable circumstances are protected, though Ofgem should continue its work on minimising fixed costs in the energy system.

We also welcome the publication of Ofgem’s Consumer Confidence programme, including a commitment to consider introducing a Consumer Duty, similar to the one in financial services. We think this change could have significant benefits for consumers - and particularly those in vulnerable situations - as we transition to net zero, by increasing standards, ensuring firms focus on good consumer outcomes and ensuring that products offer fair value, while also enabling innovation.

Ofgem should also ensure the Strategy is fit for the new areas it will regulate in the coming years. For example, the Strategy should work for heat network consumers where Ofgem will soon take on the role as regulator, and flexibility and intermediary services, where regulation is being developed.